MPOWER International Student Services LLP

Empowering students worldwide to fulfill their educational potential

www.MPOWERFinancing.com

Case Question:
Your company claims to base the pay raises of its managers on a performance level,
rather on simply the years of experience of the company.
The company measures performance by using rating by the manager’s supervisor on a
5-point scale that ranges from 1=unsatisfactory to 5=Outstanding
The company measures experience by the total no of years of relevant business
experience of the manager, both at this company and at former companies.
The education level of the manager is measured as the total number of undergraduate
or graduate degrees obtained by the manager.
Let us find out what happens when you use the hypothetical data that is presented:
Questions:
1) Is there a relationship between performance, experience, and education level to
pay raise? Please quantify the relationship
2) Describe the impact on pay raise for 1 point increase in performance rating.
3) Describe the impact on pay raise if an employee acquires another degree.
4) Also predict the % raise you would expect for a performance rating of 4, 12 years
of experience, and 3 degrees.
5) MPOWER decides to incorporate another parameter into its pay raise decision.
This new parameter is ‘Peer Rating’. On further analysis it was discovered that
‘Peer Rating’ is 88% correlated with ‘Performance rating’. Should MPOWER
include this new parameter into its pay raise algorithm? What will be the
relationship between ‘Peer rating’ and ‘Pay Raise’?

Percentage Performance Years of No of

Raise Rating
6 4
4 5
2 3
5 5
3 3
2 2
5 3
6 4
7 3
Experience degrees
3 4
4 5
2 1
5 3
14 2
12 1
6 2
7 3
5 4

MPOWER International Student Services LLP

#837/1, Binnamangala 1st stage, 100 Feet Road, Indiranagar, Bengaluru – 560038, India

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 MPOWER International Student Services LLP
Empowering students worldwide to fulfill their educational potential
www.MPOWERFinancing.com

9 5
12 5 3
8 4
8 5
6 3
5 3
7 4
8 3
4 1
5 4
6 3
7 4
8 4
6 5
3 3
2 1
4 3
2 2
4
6 4
3 3
8 1
4 1
5 3
6 3
9 1
6 1
5 2
4 4
2 3
12 4
12 2
13 1
10 3

Please provide your response in any format you prefer (Word, PDF, Excel) Your
response should include what assumptions you would make, critical variables, and
criteria for how you would make a decision.
This case question should not take more than 1 hour. Please ensure that you complete
this case independently, though research is permitted.

MPOWER International Student Services LLP

#837/1, Binnamangala 1st stage, 100 Feet Road, Indiranagar, Bengaluru – 560038, India

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