1. (3) 21% of the executives in a firm are at the top salary level. At the firm,

Question

1. (3) 21% of the executives in a firm are at the top salary level. At the firm, 40% of all executives are women. In addition, 6.2% of all executives are women and at the top salary level. Calculate conditional probabilities of making the top salary if the executive is a woman or a man. Is there any evidence of salary inequity at this firm? What do you recommend the president of the firm should do about it? The answer must include - probability (proportion) of a male executive - probability (proportion) for a male executive being at the top salary level - both conditional probabilities - your opinion

Explanation / Answer

1.

The probablity of Male executives is 60%

The probablity of top saliried Male executive = 21%-6.2% = 14.8%

Therefore if the probablity of being at top salary given that the executive is woman is 6.2/21 = 30%

The probablity of being at top salary given that the executive is man is 14.8/21 = 70%

There is a gender pay gap as the woman comprise of the 40% of the executives but only 30% make it to the top salary level.

The president of the firm should introduce practices which encourage equaly pay opportunity for equal work.

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