STATISTICS AND DECISION-MAKING IN HRM
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The word statistics has a Latin origin where the word status means state. Statistics is defined as the science that helps us understand how to collect, organize and interpret numbers or other information (data) about some topic (Bennett, et al., 2003). It is a discipline of data collection and summarizing to aid understanding and decision-making. It is also concerned with evaluation of the present status and predicting the future (Stockberger, 1996). Statistics studies the nature of a relationship between two or more variables of interest by using the numerical statistical data. Moreover only statistics makes it possible to analyze these relationships (Kachigan, 1986).
These features make statistics an essential component of every business system. Managers of modern world are more inclined to apply the standards of management based on concrete statistical data, widely applying statistics in support of the business policies and procedures. The collection and processing of data increases awareness of managers thereby improving business outcomes.
With further development during the twentieth century statistics became one of the fundamentals of management science. Management science is the discipline that employs scientific techniques of mathematical modelling and statistical analysis to help design systems and make better business management decisions that can enhance the business efficiency (Beer, 1967). Management science techniques presuppose making a research involving statistical data and analysis that enables a researcher to arrive at optimal solutions. These techniques are widely used in a modern business world for performance measuring and forecasting, quality control, operations planning and scheduling, as well as for the customer satisfaction management. Eventual technological advancement of information technology contributed to further integration of statistics into the management science to effectively model and solve complex management problems Frederick S. Hillier & Gerald J. Lieberman, 2005).
Statistics plays a crucial role in management processes of organizations. The task of management is to make logically sound decisions and the basis of their decisions is the data that is derived by means of statistical tools. Despite the outstanding development of statistics, still general public sees it as a discipline solely associated with calculated economic or other data. But actually management science including statistics is indispensable in organising our daily activities (Runyon, and Haber, 1976). To see how statistics helps to make our lives more convenient we will review the simple example of a corporate transportation service when the employer provides buses for its employees to commute to and from the office every day. We take this service for granted and never think how much effort was input to make the employees transportation system work like a clock. These efforts include among others planning of most safe routes based on the traffic accident statistics in the city, collection of data reflecting a number of persons per route and selection of a vehicle to accommodate the commuters. Besides, transportation planning and scheduling also considered seasonal fluctuation in a numbers of passengers decreasing in summer due to vacations and increasing in autumn when employees return to work, which can be implemented by means of statistical analysis of collected data.
However the role of statistics in management sciences is multifaceted. It is not confined only to day-to-day activities but enables managers to better understand the environment they have to deal with. Every manager requires as much information as possible about characteristics of business environment he or she is operating in. The majority of this information is numerical and is hard to comprehend. Solution to this challenge demonstrates another useful facet of statistics....
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