FORE SCHOOL OF MANAGEMENT

Term III

FACTOR ANALYSIS

Submitted to: Prof. Alok Kumar

Submitted by: Group 8, FMG25-C

Ankit Shah(251135)

Arjun Dua (251142)

Dhiraj Upadhyaya(251152)

Indrasish Mishra(251160)

Kunal Verma (251164)

Nimin Mathew Jose (251168)

1
 Contents
INTRODUCTION......................................................................................................................3
OBJECTIVE OF THE PROBLEMS.........................................................................................3
APPLICATIONS:......................................................................................................................3
HYPOTHYSIS FORMULATION:............................................................................................4
Sample Problem 1:.....................................................................................................................4
Sample Problem 2:...................................................................................................................10
Sample Problem 3:...................................................................................................................13
Sample Problem 4:...................................................................................................................22
Sample Problem 5:...................................................................................................................36
Sample Problem 6:...................................................................................................................40

INTRODUCTION

2
Factor analysis is a method of data reduction.  It does this by seeking underlying
unobservable (latent) variables that are reflected in the observed variables (manifest
variables). It is a technique that requires a large sample size.  It is based on the correlation
matrix of the variables involved, and correlations usually need a large sample size before they
stabilize.  Tabachnick and Fidell cite Comrey and Lee’s (1992) advise regarding sample size:
50 cases is very poor, 100 is poor, 200 is fair, 300 is good, 500 is very good, and 1000 or
more is excellent.  As a rule of thumb, a bare minimum of 10 observations per variable is
necessary to avoid computational difficulties.

It does not distinguish between independent and dependent variables.

OBJECTIVE OF THE PROBLEMS

Objective of the problems is to reduce the number of variables and make categories based on
correlation among variables.

In order to attain this objective, Factor analysis has been used on 6 different datasets to
combine and reduce the number of variables on the basis of correlation among the variables.

APPLICATIONS

1. Identification of Underlying Factors:

● Clusters variables into homogeneous sets

● Creates new variables (i.e. Factors)

● Allows us to gain insight to categories

2. Screening of Variables:

● Identifies groupings to allow us to select one variable to represent many

● Useful in regression (recall collinearity)

3. Summary:

● Allows us to describe many variables using a few factors.

4. Sampling of variables:

● Helps select small group of variables of representative variables from larger

set

5. Clustering of objects:

3
 ● Helps us to put objects (people) into categories depending on their factor
scores.

HYPOTHESIS FORMULATION

The null hypothesis for factor analysis is that the correlation matrix is an identity matrix.

In other words, the correlation matrix is insignificant is the null hypothesis.

DATA ANALYSIS

SAMPLE PROBLEM 1

Interview Data set

The questionnaire designed to predict how The data are from [Kendall M. (1975). Multivariate
analysis. Griffin, London] and correspond to 61 applicants for a position in firm who have been
judged on 15 variables:

1. KMO and Bartlett's Test

The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial
correlations is large relative to the sum of correlations, indicating diffusion in the pattern of
correlations and value close to 1 indicates that patterns of correlations are relatively compact
and so factor analysis will give distinct and reliable factors. It should be greater than 0.5 at
least but ideally it should be greater than 0.6 here the value is .755 which is acceptable.

4
Bartlett's measure tests the null hypothesis that the original correlation matrix is an identity
matrix. For factor analysis to work we need some relationships between variables and if the R
matrix were an identity matrix then all correlation coefficients would be zero. The significant
value (p value) should be less than 0.05 and here its 0.000. So Null hypothesis is rejected.

2 ) Communalities

The initial component value before extraction of the communalities are all 1 implying 100%
participation . Extraction reflect the common variance in the data structure.

For eg. 61.3% of the variance associated with 'Form of letter of application' is common, or
shared, variance. After extraction some of the factors are discarded and so some information
is lost. The amount of variance in each variable that can be explained by the retained factors
is represented by the communalities after extraction.

5
3 ) Total Variance Explained

It shows the Eigen values associated with each linear component (factor) before extraction,
after extraction and after rotation. 15 linear components have been found before extraction.
The Eigen values associated with each factor represent the variance explained by that
particular linear component and also the percentage of variance explained like factor 1 shows
43.618% of total variance. The first few factors have relatively large amounts of variance
(especially factor 1) which slowly reduces to small amounts of variance. All factors with
Eigen values greater than 1 are extracted which gives four factors displayed in Extraction
Sums of Squared Loadings. In Rotation Sums of Squared Loadings, the Eigen values of the
factors after rotation are displayed. Rotation has the effect of optimizing the factor structure
and one consequence for these data is that the relative importance of the four factors is
equalized. Before rotation, factor 1 accounted for considerably more variance than the
remaining three (43.618% compared to 11.678,8.713) but after extraction it was only
32.800% of variance (compared to 15.161, 14.905 respectively).

6
4 ) Scree Plot

The component number 4 reflects the point of inflexion on the curve. The curve reaches a
stable plateau after that .

7
5) Component Matrix

This matrix contains the loadings of each variable onto each factor. 4 components are created.
Risk averseness in few parameters due to high correlation.

6 ) Rotated Component Matrix

The idea of rotation is to reduce the number factors on which the variables under
investigation have high loadings. Rotation does not actually change anything but makes the
interpretation of the analysis easier. Looking at the table above, we can see which variables
are substantially loaded on Factor (Component). These factors can be used as variables for
further analysis. A cut-off value of 0.5 is generated to compare all the factors. Values of

8
components which are above the cut-off value of 0.5 are considered. Few variables are
independent. Now, factors with high cut-off are named as per their characteristics.

9
SAMPLE PROBLEM 2

Objective
A survey was conducted by a University about opinion of its employees (Faculty) on various
parameters of the university like Student performance, Caste, Gender, Race etc. A
questionnaire was prepared in this regard with 67 questions and 1428 respondents.

Data Analysis
Communalities

The following table consisted of all values greater than 0.5 and values upto 0.985. This
indicates that the factors could significantly explain variances of all the variables.

KMO and Bartlett Test

KMO = 0.755

The data is adequate with a strong score.

Bartlett Test

As null hypothesis was rejected, it is concluded that Correlation Matrix is not equal to
Identity matrix. There existed correlation among variables and hence Factor reduction test
could be applied upon.

10
Total Variance Explained

This table pointed out 16 factors having Eigen Values greater than 1, which could
significantly explain the variance of all the variables with data loss of 33% approx.

Component Matrix

Table indicates the variation of each variable explained by each factor. Some of the variables
had insignificant variations explained by all the factors. So the values were adjusted in next
table.

11
Rotated Component Matrix

The table gives the refined view of the previous tables with all variables being significantly
explained by one factor or the other using Varimax iterations. 67 variables were clubbed into
16 factors.

Component Tranformation Matrix

This table shows variation of one factor explained by all other factors.

12
SAMPLE PROBLEM 3

Objective
A survey was conducted to understand how anxious a given individual would be about
learning how to use SPSS, a questionnaire was designed which contained 23 variables and
2571 responses were obtained to understand what latent variables contribute to the anxiety
about the SPSS.

KMO and Bartlett Test

KMO = 0.930

The data is adequate with a strong score.

Bartlett Test

As null hypothesis was rejected, it is concluded that Correlation Matrix is not equal to
Identity matrix. There existed correlation among variables and hence Factor reduction test
could be applied upon.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .930

Bartlett's Test of Sphericity Approx. Chi-Square 19334.492

df 253

Sig. .000

Communalities

The following table consisted of all values are greater than 0.5 and however for all intents and
purposes, we proceed with the analysis.

13
 Communalities

Initial Extraction

Statiscs makes me cry 1.000 .435

My friends will think I'm stupid 1.000 .414

for not being able to cope with
SPSS

Standard deviations excite me 1.000 .530

I dream that Pearson is attacking 1.000 .469

me with correlation coefficients

I don't understand statistics 1.000 .343

I have little experience of 1.000 .654

computers

All computers hate me 1.000 .545

I have never been good at 1.000 .739

mathematics

My friends are better at statistics 1.000 .484

than me

Computers are useful only for 1.000 .335

playing games

I did badly at mathematics at 1.000 .690

school

People try to tell you that SPSS 1.000 .513

makes statistics easier to
understand but it doesn't

I worry that I will cause 1.000 .536

irreparable damage because of
my incompetenece with
computers

Computers have minds of their 1.000 .488

own and deliberately go wrong
whenever I use them

14
Computers are out to get me 1.000 .378

I weep openly at the mention of 1.000 .487

central tendency

I slip into a coma whenever I see 1.000 .683

an equation

SPSS always crashes when I try 1.000 .597

to use it

Everybody looks at me when I 1.000 .343

use SPSS

I can't sleep for thoughts of 1.000 .484

eigen vectors

I wake up under my duvet 1.000 .550

thinking that I am trapped under
a normal distribution

My friends are better at SPSS 1.000 .464

than I am

If I'm good at statistics my 1.000 .412

friends will think I'm a nerd

Extraction Method: Principal Component Analysis.

Total Variance Explained

This table pointed out 4 factors having Eigen Values greater than 1, which could significantly
explain the variance of all the variables with data loss of 49% approx.

Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings

Component Total % of Variance Cumulative % Total % of Variance Cumulative %

1 7.290 31.696 31.696 7.290 31.696 31.696

15
2 1.739 7.560 39.256 1.739 7.560 39.256

3 1.317 5.725 44.981 1.317 5.725 44.981

4 1.227 5.336 50.317 1.227 5.336 50.317

5 .988 4.295 54.612

6 .895 3.893 58.504

7 .806 3.502 62.007

8 .783 3.404 65.410

9 .751 3.265 68.676

10 .717 3.117 71.793

11 .684 2.972 74.765

12 .670 2.911 77.676

13 .612 2.661 80.337

14 .578 2.512 82.849

15 .549 2.388 85.236

16 .523 2.275 87.511

17 .508 2.210 89.721

18 .456 1.982 91.704

19 .424 1.843 93.546

20 .408 1.773 95.319

21 .379 1.650 96.969

22 .364 1.583 98.552

23 .333 1.448 100.000

16
Component Matrix

Table indicates the variation of each variable explained by each factor. Some of the variables
had insignificant variations explained by all the factors. So the values were adjusted in next
table.

Component Matrixa

Component

1 2 3 4

Statiscs makes me cry .586 .175 -.215 .119

17
My friends will think I'm stupid -.303 .548 .146 .010
for not being able to cope with
SPSS

Standard deviations excite me -.629 .290 .213 -.067

I dream that Pearson is attacking .634 .144 -.149 .153

me with correlation coefficients

I don't understand statistics .556 .101 -.074 .137

I have little experience of .562 .097 .571 -.048

computers

All computers hate me .685 .039 .252 .103

I have never been good at .549 .401 -.323 -.417

mathematics

My friends are better at statistics -.284 .627 -.008 .103

than me

Computers are useful only for .437 .035 .363 -.103

playing games

I did badly at mathematics at .652 .245 -.209 -.400

school

People try to tell you that SPSS .669 -.048 .051 .248
makes statistics easier to
understand but it doesn't

I worry that I will cause .673 .076 .278 -.008

irreparable damage because of
my incompetenece with
computers

Computers have minds of their .656 .023 .198 .135

own and deliberately go wrong
whenever I use them

Computers are out to get me .593 .010 .117 -.113

I weep openly at the mention of .679 .014 -.138 .080

central tendency

18
I slip into a coma whenever I .643 .330 -.210 -.342
see an equation

SPSS always crashes when I try .701 .033 .298 .125

to use it

Everybody looks at me when I -.427 .390 .095 -.013

use SPSS

I can't sleep for thoughts of .436 -.205 -.404 .297

eigen vectors

I wake up under my duvet .658 -.055 -.187 .282

thinking that I am trapped under
a normal distribution

My friends are better at SPSS -.302 .465 -.116 .378

than I am

If I'm good at statistics my -.144 .366 -.021 .507

friends will think I'm a nerd

Rotated Component Matrix

The table gives the refined view of the previous tables with all variables being significantly
explained by one factor or the other using Varimax iterations. 23 variables were clubbed into
4 factors.

Rotated Component Matrixa

Component

1 2 3 4

Statiscs makes me cry .241 .496 .356 .061

My friends will think I'm stupid -.005 -.338 .068 .543

for not being able to cope with
SPSS

Standard deviations excite me -.203 -.567 -.180 .368

19
I dream that Pearson is attacking .320 .516 .314 .039
me with correlation coefficients

I don't understand statistics .319 .429 .238 .015

I have little experience of .800 -.010 .097 -.072

computers

All computers hate me .638 .327 .155 -.082

I have never been good at .131 .168 .833 .005

mathematics

My friends are better at statistics -.094 -.204 .118 .648

than me

Computers are useful only for .550 .001 .130 -.123

playing games

I did badly at mathematics at .263 .206 .747 -.143

school

People try to tell you that SPSS .473 .523 .095 -.084
makes statistics easier to
understand but it doesn't

I worry that I will cause .647 .234 .228 -.100

irreparable damage because of
my incompetenece with
computers

Computers have minds of their .579 .360 .136 -.074

own and deliberately go wrong
whenever I use them

Computers are out to get me .459 .217 .292 -.188

I weep openly at the mention of .334 .514 .313 -.116

central tendency

I slip into a coma whenever I .271 .222 .747 -.042

see an equation

SPSS always crashes when I try .684 .327 .127 -.080

to use it

20
Everybody looks at me when I -.146 -.372 -.029 .428
use SPSS

I can't sleep for thoughts of -.038 .677 .067 -.141

eigen vectors

I wake up under my duvet .287 .661 .160 -.074

thinking that I am trapped under
a normal distribution

My friends are better at SPSS -.190 .034 -.099 .645

than I am

If I'm good at statistics my -.023 .172 -.198 .586

friends will think I'm a nerd

21
SAMPLE PROBLEM 4

Interview Data set

A survey was conducted to understand how do aptitude and standardized tests form
performance dimensions, a questionnaire was designed which contained 74 variables and 107
responses were obtained to understand what latent variables contribute to performance in the
tests.

1. KMO and Bartlett's Test

Here, the value is .792 which is acceptable. The data has a good adequacy with a high score.

Bartlett's measure tests the null hypothesis that the original correlation matrix is an identity
matrix. For factor analysis to work we need some relationships between variables and if the R
matrix were an identity matrix then all correlation coefficients would be zero. The significant
value (p value) should be less than 0.05 and here its 0.000.So null hypothesis is rejected.

2 ) Communalities

The initial component value before extraction of the communalities are all 1 implying 100%
participation .Extraction reflect the common variance in the data structure.

22
23
24
The following table consisted of values greater than 0.5 and values upto 0.998 as well as less
than 0.5. However for all intents and purposes, we proceed with the analysis.
After extraction some of the factors are discarded and so some information is lost. The
amount of variance in each variable that can be explained by the retained factors is
represented by the communalities after extraction.

3 ) Total Variance Explained

25
It shows the Eigen values associated with each linear component (factor) before extraction,
after extraction and after rotation. The Eigen values associated with each factor represent the
variance explained by that particular linear component and also the percentage of variance
explained like factor 1 shows 31.867% of total variance. The first few factors have relatively
large amounts of variance (especially factor 1) which slowly reduces to small amounts of
variance. All factors with Eigen values greater than 1 are extracted which gives seven factors
displayed in Extraction Sums of Squared Loadings. In Rotation Sums of Squared Loadings,
the Eigen values of the factors after rotation are displayed. Rotation has the effect of
optimizing the factor structure and one consequence for these data is that the relative
importance of the seven factors is equalized. Before rotation, factor 1 accounted for
considerably more variance than the remaining three (31.867% compared to 16.302, 15.208)
but after extraction it was only 24.352% of variance (compared to 13.911, 13.672
respectively). This table pointed out 7 factors having Eigen Values greater than 1, which
could significantly explain the variance of all the variables with data loss of 6% approx.

4 ) Scree Plot

26
The component number 7 reflects the point of inflexion on the curve. The curve reaches a
stable plateau after that .

5) Component Matrix

27
28
29
This matrix contains the loadings of each variable onto each factor. 7 components are created.
Table indicates the variation of each variable explained by each factor. Some of the variables
had insignificant variations explained by all the factors. So the values were adjusted in next
table.

6 ) Rotated Component Matrix

30
31
32
33
The table gives the refined view of the previous tables with all variables being significantly
explained by one factor or the other using Varimax iterations. 74 variables were clubbed into
7 factors.

34
SAMPLE PROBLEM 5

Objective
A survey was conducted by a University about National Merit Twin study taking various
parameters which can affect the score like twin pair number, Sex, Zygosity, NMSQT subject
test etc. A questionnaire was prepared in this regard with 17 questions and 1678 respondents.

KMO and Bartlett Test

KMO = 0.83

The data is adequate with a strong score.

Bartlett Test

As null hypothesis was rejected, it is concluded that Correlation Matrix is not equal to
Identity matrix. There existed correlation among variables and hence Factor reduction test
could be applied upon.

Communalities

The following table consisted of values from 0.019 to 1. This indicates that all the factors
could not significantly explain variances of all the variables but some did explain the variance
of all the factors.

35
Total Variance Explained

This table pointed out 3 factors having Eigen Values greater than 1, which could significantly
explain the variance of all the variables with data loss of 25% approx.

36
SCREE PLOT

Component Matrix

Table indicates the variation of each variable explained by each factor. Some of the variables
had insignificant variations explained by all the factors. So the values were adjusted in next
table.

37
Rotated Component Matrix

The table gives the refined view of the previous tables with all variables being significantly
explained by one factor or the other using Varimax iterations. 17 variables were clubbed into
3 factors.

38
SAMPLE QUESTION 6

Objective
A survey was conducted where different people were asked to rate themselves on a scale of 1
to 5 on various personality types. The data set is formed out of these scores. The number of
personality types were 44, with 459 being the number of total respondents. The aim of doing
factor analysis is to reduce the number of variables into factors, that contain variables that are
inter-dependent.

KMO and Bartlett’s Test

The KMO value is 0.841. This means the sample of respondents is adequate. Any value
above 0.5 is considered adequate.

The value of Sigma is 0.000 which means it is very small. Thus, we can reject the null
hypothesis that the correlation matrix is an identity matrix. It implies that all the variables are
not independent of each other.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .841

Bartlett's Test of Sphericity Approx. Chi-Square 6730.363

df 946

Sig. .000

Communalities

This table gives an idea of how much of the variance can be explained by each variable. In
the output table, most of the variables have a value of over 0.5.

Communalities

39
 Initial Extraction

talkative 1.000 .749

finds fault 1.000 .564

does a thorough job 1.000 .581

depressed 1.000 .608

original 1.000 .593

reserved 1.000 .661

helpful 1.000 .629

careless 1.000 .533

relaxed 1.000 .629

curious 1.000 .504

full of energy 1.000 .537

starts quarrels 1.000 .445

reliable 1.000 .631

tense 1.000 .605

ingenious 1.000 .614

generates enthusiasm in
1.000 .624
others

forgiving 1.000 .351

disorganized 1.000 .550

worries 1.000 .581

imaginative 1.000 .510

quiet 1.000 .744

trusting 1.000 .519

lazy 1.000 .571

emotionally stable 1.000 .558

inventive 1.000 .591

40
assertive 1.000 .571

cold and aloof 1.000 .517

perseveres 1.000 .543

moody 1.000 .563

values artistic experiences 1.000 .639

shy 1.000 .642

considerate 1.000 .693

efficient 1.000 .658

calm in tense situations 1.000 .592

prefers routine work 1.000 .579

outgoing 1.000 .640

sometimes rude 1.000 .553

sticks to plans 1.000 .476

nervous 1.000 .579

reflective 1.000 .595

few artistic interests 1.000 .614

co-operative 1.000 .520

ditractable 1.000 .531

sophisticated in art & music 1.000 .659

Extraction Method: Principal Component Analysis.

Total Variance Explained

41
This table calculated the eigenvalues of all the variables. It then removes the variables having
eigenvalues less than 1. It reduces the number of factors of 10, that combined explain 58.2%
of the variance. It also gives a rotated value to give a more appropriate value of the variance
explained by the 10 factors.

Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 7.280 16.545 16.545 7.280 16.545 16.545 4.388 9.972 9.972

2 4.192 9.527 26.072 4.192 9.527 26.072 3.716 8.446 18.419

3 3.041 6.910 32.982 3.041 6.910 32.982 3.543 8.052 26.471

4 2.548 5.790 38.772 2.548 5.790 38.772 2.908 6.610 33.081

5 2.253 5.121 43.893 2.253 5.121 43.893 2.295 5.215 38.295

6 1.594 3.624 47.517 1.594 3.624 47.517 2.115 4.807 43.102

7 1.318 2.996 50.513 1.318 2.996 50.513 2.111 4.798 47.900

8 1.224 2.781 53.294 1.224 2.781 53.294 1.880 4.272 52.172

9 1.154 2.622 55.916 1.154 2.622 55.916 1.516 3.445 55.617

10 1.044 2.373 58.289 1.044 2.373 58.289 1.176 2.672 58.289

11 .966 2.197 60.485

12 .951 2.161 62.646

13 .900 2.045 64.692

14 .825 1.875 66.567

15 .822 1.869 68.436

16 .753 1.712 70.148

17 .736 1.672 71.819

18 .714 1.623 73.443

19 .686 1.559 75.002

42
20 .660 1.500 76.502

21 .655 1.488 77.989

22 .647 1.470 79.460

23 .587 1.333 80.793

24 .577 1.311 82.104

25 .569 1.293 83.397

26 .555 1.261 84.659

27 .534 1.215 85.873

28 .484 1.100 86.973

29 .467 1.061 88.034

30 .459 1.044 89.078

31 .447 1.016 90.093

32 .436 .991 91.085

33 .424 .965 92.049

34 .396 .901 92.950

35 .383 .870 93.820

36 .367 .834 94.654

37 .353 .803 95.457

38 .338 .768 96.225

39 .324 .736 96.961

40 .314 .713 97.674

41 .299 .680 98.354

42 .276 .626 98.980

43 .241 .547 99.527

44 .208 .473 100.000

Extraction Method: Principal Component Analysis.

43
SCREE PLOT

Component Matrix

It gives the loadings of the various 44 variables on the 10 factors.

Component Matrixa

Component

1 2 3 4 5 6 7 8 9 10

talkative .551 -.285 .278 -.490 .035 -.017 .041 -.076 .181 -.067

finds fault -.185 -.195 .354 .081 .539 -.019 -.130 -.190 .112 -.053

44
does a thorough job .510 .434 .065 -.002 .316 .053 .100 -.056 .105 -.038

depressed -.516 .262 .329 -.089 .045 -.070 .104 .034 -.105 .357

original .568 -.083 .277 .226 -.119 -.179 .197 .211 .053 -.059

reserved -.369 .526 -.023 .380 .015 .200 .073 -.233 -.040 -.054

helpful .532 .299 -.001 -.216 -.193 .042 .108 .082 .222 .323

careless -.468 -.340 .200 -.079 -.225 .303 .039 .057 .000 -.077

relaxed .402 -.244 -.393 .363 -.068 .242 .112 .166 .136 .013

curious .313 -.006 .444 .165 -.002 .101 .156 -.185 -.186 -.280

full of energy .353 -.306 .159 .172 .147 .389 -.206 -.014 -.207 -.077

starts quarrels -.294 -.263 .185 .104 .279 .100 -.015 .249 .233 .201

reliable .556 .410 .036 -.101 .124 -.012 .093 -.047 .197 -.277

tense -.379 .310 .499 -.241 .117 .070 -.006 .003 -.176 .093

ingenious .166 .160 .366 .403 -.047 -.045 .132 .477 -.108 .063

generates enthusiasm
.459 -.334 .327 -.018 .100 .278 .007 -.026 -.299 .131
in others

forgiving .252 -.012 -.015 -.114 -.275 .397 .038 -.199 -.019 .007

disorganized -.382 -.370 .059 -.072 -.457 .185 .050 .043 -.012 -.102

worries -.189 .475 .419 -.211 -.055 -.046 -.110 .244 -.092 -.116

imaginative .301 -.052 .506 .125 -.144 -.060 .230 -.045 -.015 -.256

quiet -.435 .552 -.143 .399 -.082 .228 .047 -.088 -.019 -.039

trusting .448 .163 -.006 -.343 -.266 .298 -.031 .047 .107 .009

lazy -.562 -.388 .123 -.017 -.203 .047 .101 .025 .107 .154

emotionally stable .419 -.310 -.301 .309 -.034 .196 .060 .070 .172 -.151

inventive .302 -.215 .364 .349 -.099 -.118 .232 -.248 -.239 .059

assertive .386 -.465 .229 .102 .328 .108 -.035 .042 -.034 .139

cold and aloof -.416 .005 .118 .255 .305 .162 -.028 .025 .380 .028

perseveres .559 .390 .031 -.033 .221 -.029 .034 -.030 .124 -.098

45
moody -.346 .123 .448 -.088 .172 .085 .159 -.069 .386 .061

values artistic
.206 .079 .327 .392 -.325 -.013 -.429 -.104 .171 .002
experiences

shy -.364 .495 -.047 .245 -.186 .277 .109 -.169 .210 -.079

considerate .517 .344 .036 -.262 -.189 .252 .063 -.028 .043 .364

efficient .390 .296 -.031 .123 .479 .126 .038 -.174 -.177 .308

calm in tense situations .299 -.263 -.358 .364 .071 .208 .213 -.136 -.041 .243

prefers routine work -.185 .158 -.133 -.007 .160 .369 -.420 .369 -.129 -.105

outgoing .494 -.460 .162 -.285 .050 .154 -.209 -.050 .039 -.052

sometimes rude -.386 -.417 .245 .103 .235 .020 .107 .085 .288 -.043

sticks to plans .481 .241 .058 .098 .295 .123 -.222 .080 .058 -.110

nervous -.465 .386 .290 -.082 -.001 .309 -.028 .015 -.141 -.085

reflective .333 .141 .343 .355 -.278 -.035 .200 .315 .025 .055

few artistic interests -.293 -.053 -.203 -.194 .281 .311 .351 .342 -.137 -.107

co-operative .530 .259 .064 -.291 -.199 .153 .015 .093 .103 .003

ditractable -.404 -.310 .281 -.142 -.162 .264 .054 -.244 .111 .032

sophisticated in art &

.185 .024 .267 .388 -.305 -.078 -.503 -.009 .088 .207
music

Extraction Method: Principal Component Analysis.

a. 10 components extracted.

Rotated Component Matrix

Using the Varimax rotation technique, it reduces the loadings a variable can have on a factor.
Thus, it makes the interpretation of the data easier in the output.

Rotated Component Matrixa

Component

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 1 2 3 4 5 6 7 8 9 10

talkative .142 -.658 .019 .388 .185 .081 -.056 -.015 -.207 .241

finds fault .112 -.121 .179 -.377 .270 .504 -.177 .051 -.038 .019

does a thorough job .697 .042 .005 .246 .112 .055 .088 -.049 -.063 .063

depressed -.172 .226 .584 -.067 -.111 .190 .074 -.067 -.079 -.342

original .214 -.267 -.193 .105 .127 -.046 .568 .142 -.220 .135

reserved .088 .785 .137 -.101 .047 .053 -.040 .034 -.004 -.026

helpful .314 -.126 -.043 .644 -.166 -.065 .168 .082 -.118 -.131

careless -.654 .051 .112 -.003 .146 .198 -.025 -.091 .106 .101

relaxed .056 -.003 -.747 .130 .058 -.020 .183 -.023 .108 -.040

curious .137 .001 .072 .018 .543 -.043 .239 .065 -.231 .263

full of energy .051 -.191 -.234 .027 .610 .032 .039 .113 .235 -.007

starts quarrels -.183 -.100 .012 -.174 -.028 .547 .101 -.053 .161 -.180

reliable .624 -.012 -.024 .311 .018 -.052 .085 -.021 -.089 .355

tense -.058 .141 .724 .012 .125 .159 .023 -.080 .041 -.087

ingenious .114 .065 .066 -.052 .095 .047 .746 .088 .090 -.081

generates enthusiasm
.035 -.375 -.075 .170 .632 -.014 .145 .013 -.010 -.163
in others

forgiving -.092 .060 -.141 .461 .271 -.125 -.106 .034 -.030 .061

disorganized -.723 .027 -.011 .045 .026 -.016 -.001 -.019 .025 .149

worries .074 .119 .659 .085 -.074 -.018 .225 .029 .193 .157

imaginative .041 -.102 .085 .065 .330 .014 .396 .103 -.319 .329

quiet .007 .841 .081 -.074 -.085 .008 .011 .018 .123 -.045

trusting .116 -.131 -.032 .658 .052 -.150 .000 .021 .099 .136

lazy -.671 .016 .074 -.123 -.093 .268 -.031 -.040 -.079 -.099

emotionally stable .066 -.085 -.701 .072 .125 .008 .107 .020 .061 .138

inventive -.003 -.072 -.095 -.108 .453 -.092 .306 .184 -.466 -.078

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assertive .114 -.463 -.233 -.059 .428 .249 .112 .037 -.003 -.161

cold and aloof -.054 .271 .012 -.208 -.061 .615 -.045 .019 .115 -.005

perseveres .667 -.039 -.028 .247 .046 -.029 .091 .021 -.054 .143

moody -.068 .142 .375 .064 -.035 .598 .008 -.039 -.160 .085

values artistic
.017 .093 -.029 .076 .132 .030 .191 .744 .023 .123
experiences

shy -.052 .752 .080 .140 -.110 .134 -.038 .046 -.004 .118

considerate .285 -.039 .038 .730 .052 -.133 .064 .056 -.050 -.215

efficient .626 .073 -.040 .076 .286 .029 -.053 -.061 -.034 -.404

calm in tense situations .061 .061 -.644 .033 .205 -.016 .000 -.073 -.129 -.322

prefers routine work .016 .134 .079 -.034 .038 .015 -.054 -.036 .740 -.016

outgoing .018 -.619 -.163 .239 .350 .041 -.125 .112 .054 .131

sometimes rude -.316 -.107 -.009 -.302 .023 .576 .035 -.097 -.040 .074

sticks to plans .568 -.068 -.083 .115 .189 .050 .081 .136 .235 .095

nervous -.139 .434 .528 .048 .134 .109 -.016 -.102 .217 .051

reflective .076 .053 -.051 .175 .076 -.020 .707 .190 -.104 .025

few artistic interests -.130 .077 .000 -.044 .002 .119 .022 -.705 .277 -.034

co-operative .272 -.153 .022 .599 .013 -.158 .126 .037 .030 .140

ditractable -.550 .041 .163 .078 .197 .299 -.211 .006 -.134 .057

sophisticated in art &

-.015 .002 -.030 .032 .062 -.009 .208 .769 .091 -.105
music

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 16 iterations.

MANAGERIAL IMPLICATIONS

A number of managerial implications come from the factor analysis of 6 datasets. Following
are the managerial implications:

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INTERVIEW DATASET: Having 15 variables on which interviewer evaluated. It was
found that as much as 4 factors are sufficient to cover the entire set of 15 variables. That
makes the decision maker his work easy of selecting the best suited person for the post. So,
the 15 variables in this dataset can be reduced to 4 factors on the basis of correlation among
variables.

In this dataset, a principal component analysis has been carried out with rotation. This resulted in four
correlated factors, constituting several aspects of ‘ features needed for interviews’. It turned out that
the 15 variables based on qualification appearance etc of the candidate can be reduced to 4 different
factors, which could indicate the different kinds of qualities that is considered important by
organizations.

OPINION OF EMPLOYEES: The factor analysis technique helped to reduce the no. Of
variables from 67 and clubbed them into 16 factor groups with 33% of data loss. Now these
factors could be analysed using any statistical tools.

ANXIOUS ABOUT LEARNING SPSS: The factor analysis technique helped to

reduce the no. Of variables from 23 and clubbed them into 4 factor groups with 49% of data
loss. Now these factors could be analysed using any statistical tools.

APTITUDE AND STANDARDIZED TESTS FORM PERFORMANCE

DIMENSIONS: The factor analysis technique helped to reduce the no. of variables from
74 and clubbed them into 7 factor groups with 6% of data loss. Now these factors could be
analyzed using any statistical tools.

PARAMETERS WHICH CAN AFFECT THE SCORE: The factor analysis

technique helped to reduce the no. Of variables from 67 and club those into 3 factor groups
with 25% of data loss. Now these factors could be analysed using any statistical tools.

SELF RATING: The factor analysis clubbed the initial 44 variables into a total of 10
factors. Each factor is comprised of some loadings of each variable. Thus, factor analysis
helps to reduce the data sets so that it can be easily studied, interpreted and further tools can
be applied to it easily.

CONCLUSIONS

Factor analysis is used to identify latent constructs or factors. It is commonly used to reduce variables
into a smaller set to save time and facilitate easier interpretations. In all the data sets taken, there were

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some correlations among the variables and hence factor analysis helped in reducing the number of
variables and come up with better result.

50