A Deloitte employment survey asked a sample of human resource executives how their company planned to change its workforce over the next 12 months (INC. Magazine, February 2012). A categorical response variable showed three options: The company plans to hire and add to the number of employees, the company plans no change in the number of employees, or the company plans to lay off and reduce the number of employees. Another categorical variable indicated if the company was private or public. Sample data for 180 companies are summarized as follows. a. Conduct a test of independence to determine if the employment plan for the next 12 months is independent of the type of company. At a .05 level of significance, what is your conclusion?
b. Discuss any differences in the employment plans for private and public companies over the next 12 months.

employment plan for the next 12 months is not independent of the type of company

Step-by-step explanation:

H0 : employment plan for the next 12 months is independent of the type of company

H1 : employment plan for the next 12 months is not independent of the type of company

The Chisquare statistic, χ² :

χ² = (observed - Expected)²/ Expected

Given the data:

Observed values :

Company

Emp plan private public _total

Add employees 37 32 __ 69

No change19 34 __53

Layoff employees 16 42__58

Total 72 108 _ 180

The expected value counts :

(Row total * column total) / grand total

Expected Values:

27.6 ___41.4

21.2 ___ 31.8

23.2 ___34.8

Chi-Squared Values:

3.20145 ___2.1343

0.228302__ 0.152201

2.23448 1.48965

χ² = (3.20145 + 2.1343 + 0.228302 + 0.152201 + 2.23448 + 1.48965)

χ² = 9.440383

Degree of freedom, df (row - 1) * (column - 1) = (3-1) * (2 - 1) = 2 * 1 = 2

Pvalue from Chisquare statistic, df = 2

Pvalue = 0.008913

Since ;

Pvalue < α ; We reject the null and conclude that employment plan for the next 12 months is not independent of the type of company.