Hypothesis Testing Essay Sample

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Introduction of TOPIC

Identification of the problem:

Hiring more employees would be economical to an organization during its high production phases.

Hypothesis Statement


Y = a + bx1 + cx2 + e where,

Y is the dependant variable that represents the organizations income with respect to the dependant variable (workers employment)

a; is a constant term in the organisation income which is independent of any scheme of workers employment

b; is the response variable that defines the relationship between organization income and employment of permanent workers.

x1; is an independent variable defining salaries paid to permanent workers and the organization income and employment of more permanent workers than dwelling on paying overtime.

c; is the response variable defining the relationship between the organisation income and employment of more permanent workers than dwelling on paying overtime.

x2 ; variable defining the relationship of the income and the payment of overtime workers.

e ;an error term, defining other factor affecting the income

verbal hypothesis.

Ho: m = o; there is no relationship between the organisations income and the pattern of employment of works.

H1; m ≠ o; there is a relationship between the organisation income and the pattern of employment (either positive or negative).

Literature review

            This is a hypothetical problem that is to test the relationship between the organizational business turnover and profit margin in relation to employment status of the employees. It’s a research study whose focus will be a study in an investigation of whether, the employment of more employees at a business boom phase would actually bring economies to it rather than the existing state of the organization. Depending on the nature of varying profit margins by different organizations, there has been an interest in relating the relationship of these two variables. (Murphy, Myors, 1998) Many organization management systems have failed to recognize the truth in the subject.  In my identified problem is the dependent variable; the organizations business turn over, which is an investigative variable for the organizations profit level at different position in terms of employing permanent employees during its high production phase.  Either, employment of more workers, which is the independent variable to investigate the relationship between  the existing  number at overtime payments would have any relationship with the business income.  Since this has been a dilemma affecting many organizations, a research about it remains a highly valid and researchable problem.

Objectives of the research

            This is an analytical research study, which seeks to investigate whether the

re exists any relationship between the nature of an organizations income behavior in response to the

nature of the employment structure.  The objective of the study will be to investigate whether there is any correlation in the organizations profit margin and the nature of its employment structure.  In many cases, different organizations reveal diversity in the nature of business turnovers at different phases of production.  Firstly, it is revealed that, different organizations have different system in regard to the employment of employees.  At low states of growth, the organizations will have a different employment pattern, where it may both include permanent and overtime workers.  Like wise, during high production, phase, the organisations depicts varied patterns of employment of workers.   (Murphy, Myors, 1998)

            In all cases, the results of their profit turnover are different.   However, the organizations remain unaware of the possible correlation that exists between their incomes and the mode of worker scheme, they uses.  This is a research paper that investigates the relationship between these two aspects.


            Organizational income is affected by many factors, some of which operate with the business context and even outside the business.   Between these, factors, some are controllable will others are uncontrollable; in all cases, a research problem will comprise of such factors coming into both scenarios.  Amongst these factors affecting business income are economic, environmental, business costs and others.

            However, these investigations will only investigate the correlation between an organization income level and its independency on the scheme of employment.

Upon conducting a survey among different organizations within my geographical area, I have got varied responses in relation to the organization income and the two different schemes.  The survey has been basically on use of interviews between the different organizations managers and I.  In this interview, I have chosen to capture the state of incomes to the organizations when their conditions of production are both low and high.  Using the different states of production, my attempt is to capture the variability in production and the schemes of employment.  Either, within these two states of production I chose to interview, I have tried to relate the state of production with either employing permanent workers and paying them overtime for further production or replacing the packages for permanent worker who should be paid the remunerations on permanent packages basis.

            However, to ensure that my study falls within the scope of my problem statement I will only focus on the result responses when the organization are at there increasing state of production from these organizations that I have interviewed.

Data and data analysis

From my interview, I have collected different data and findings form the responses.

  1. In all the organisations, the overtime wage rate per worker is higher than that of permanent basis.
  2. All the organizations that dwell on payment of overtime to their permanent workers are experiencing relatively lower income values than those which have all its workers. Permanent workers are experiencing relatively lower income values than those which have all its workers permanent.
  • The results are viable for the organisations in relation to their sizes and during an increasing production.

On subjecting the data to the student-t-distribution test of hypothesis to measure the hypothesis at a 95% confidence interval, the value of ‘b’ in my hypothesis is greater than O.

Results and Conclusion;

Following the use of the‘t’ test at a 95% level of confident the H1 on my hypothesis is greater than zero.   This shows that there is a positive relationship between the income of the organization and the basis of worker employment.  Since overtime wage rate is higher, then organisation using this scheme has lower income, while that using permanent worker scheme will have higher incomes.


      Since there is a positive correlation with the income of the organization and the permanent scheme of workers, organizations should employ permanent workers rather that paying overtime for their view permanent workers


Morphy, K & Myors, B (1998) Statistical Power Analysis: A Simple and General Model For Traditional and Modern Hypothesis Test.  Mahwah: Lawrence Erlbaum Associates.

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