Mean, median, and mode are different values that give information about observations. The mean is used to find the average value of data grouped in intervals. On the other hand, the median determines the middle point of arranged data, while the mode summarizes non-numeric data. To calculate the mean, divide the sum of all values in a set by the number of values in that set. This approach is often used for continuous numbers. Although it may not match any particular value in the dataset, it represents all those values.
The mean salary at a company can be determined by adding up all the salaries and dividing by the total number of salaries. For instance, if we add $50,000 + $56,000 + $54,500, the sum is $53,500. However, relying solely on average figures may be misleading when there is an extremely high or low value present. In this specific scenario mentioned above where three annual salaries are $50,000, $56,000, and $54,500 respectively but the company president’s salary is $260,000; this will cause the average salary to inflate to $105125. Therefore,this figure is twice as much as what lower-paid employees actually earn.
In this case, it is more appropriate to determine the median salary. To calculate the median salary, we arrange the data by value: $50,000, $54,500, $56,000, and $260,000. The middle value would be $55,250.
If I want to understand the distribution of salaries within the company, I would use the mode. By using this approach, I can collect data that shows two out of the four employees earn between $46,000 and $55,000 , one earns between $56 , 000 and $65 , 000 ,and one earns above$66 , 000 . The mode can also help us determine how many of the four employees belong to a specific gender or race.
