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Pay Grade Determination Using Cluster Analysis
Author(s) -
Law Kenneth S.
Publication year - 1995
Publication title -
asia pacific journal of human resources
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.825
H-Index - 33
eISSN - 1744-7941
pISSN - 1038-4111
DOI - 10.1177/103841119503300208
Subject(s) - cluster analysis , cluster (spacecraft) , hierarchy , explained sum of squares , computer science , group (periodic table) , correlation , operations research , statistics , operations management , data mining , mathematics , artificial intelligence , economics , machine learning , operating system , chemistry , organic chemistry , market economy , geometry
This paper applied the cluster analysis technique to group jobs with similar value to the organization into pay grades. The cophenetic correlation was used to select the clustering algorithm that was most similar to the original data matrix. A modification of the total sum of squares within groups was used to determine the statistically optimal number of pay grades based on the selected cluster hierarchy. Applications and limitations of the approaches were discussed to guide practitioners.