Question

A randomly selected company employs 11 people. The average monthly salary of an employee 5252 euros with a standard deviation of 5552 euros. These monthly salaries have a range of 17000 euros.

What deductions can you make about the employees' monthly salaries based on the given information? For instance, are people being paid roughly the same amount of money? Approximately how much are the majority of the employees being paid, etc.?

If possible, please someone provide me an answer as soon as possible! Thank you.

Answer 1

The first thing that you should notice is that the average is close to the standard deviation.

That is there is huge variability in the amounts that the employees are being paid . This intuition can be obtained from just looking at the standard deviation. Further, the value of the range further confirms our doubts. The difference between the lowest and the highest paid employee is 17,000 euros. That is huge .

So, the employees are not being paid the same amount at all.

Majority of the employees will be paid in the range 500-10,000 euros. That is one standard deviation on either side of the mean.

It is highly skewed , the income distribution. The employees do not get paid the same amount, or roughly so.