Deviation

Compensate for standard deviation loss

Compensate for standard deviation loss
  1. What is standard deviation in compensation?
  2. What is loss standard deviation?
  3. What happens when standard deviation decreases?

What is standard deviation in compensation?

Standard deviation describes how close or far an employee's salary is from the average salary. A standard deviation with ZERO value means all of the employees have the same salary, it means there is no deviation at all and everyone has given the same pay hike.

What is loss standard deviation?

This measures the deviation of negative returns. It is related to Downside Deviation, which uses investment minus benchmark to determine "loss" periods.

What happens when standard deviation decreases?

Low standard deviation means data are clustered around the mean, and high standard deviation indicates data are more spread out. A standard deviation close to zero indicates that data points are close to the mean, whereas a high or low standard deviation indicates data points are respectively above or below the mean.

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