To determine what affects turnover rate, a sample of 33 companies was randomly s

Question

To determine what affects turnover rate, a sample of 33 companies was randomly selected and data collected on the average annual bonus and turnover rate(%). In addition, a questionnaire was administered to the employees of each company to arrive at a trust index (measured on a scale of 0 - 100). Below are the multiple regression results. a. Write out the regression equation. b. Is the regression equation significant overall? Explain. c. Calculate the value of R-Sq(adj) d. How much of the variability in Turnover Rate is explained by the regression equation? e. Interpret the regression coefficients

Explanation / Answer

a. regression equation

y (Turnover rate)= 12.1005 - 0.01749* (Trust Index) - 0.00072 * (Average Bonus)

b. Is the regression equation significant overall?

F ratio = MS(regression)/ MS(errror) = 131.36/ 2.24 = 58.64

so regression eqution is significant overall.

c. Value of R- square (Adjusted) ?

R2(adjusted) = 1 - [(1- R2) (n-1)/ (n-k -1)]

= 1- [ (1 - 0.796)*(33-1)/ (33-2 -1)]

= 1 - [0.2176] = 0.7824

d. As R2 = 79.6% so there are 79.6% variability is explained by the regression equation.

e. All the coefficients are negative in nature and is we change one unit in trust Index, there is reduction of 0.07149 point decrease in turnover rate and simultaneously if there is increaseof one unit in Average Bonus, there is 0.00072 percent decrease in turnover rate. And wheree there is 0 trust index and 0 Average Bonu , the turnover rate is equal to 12.1005%.

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