Statistics, or numerical data, can be used in many ways to study relationships among objects and among events. People use statistical information to describe objects or events to compare them objectively, which frequently results in a greater understanding of the properties and relationships of those objects and events. While statistics evolved from mathematics largely as a tool for the discipline of science, the value of statistical information has led to numerous applications of statistics in the modern business world.
Statistics in Performance Evaluation
One of the most common uses of statistical information in the workplace is as data for performance evaluation. Corporate executives and managers of small businesses use statistical information each day when they make decisions about the efficiency of new equipment or processes compared to the older ones or when they evaluate the relative performance of employees based on objective production statistics.
Modeling and Analysis of Organizational Changes
Say you have a large factory with 10 production areas, and you decide to test a new production process in one of the 10 areas. If you keep track of all of the statistical information surrounding the test of the new process, from the cost to the time it took to convert to the degree of improvement, you can use that information to model various scenarios regarding converting some or all of the other production areas in the factory to the new process.
Understanding the Bottom Line
Bottom-line costs, expenses, sales and profit are really a matter of statistics as well. People don't generally think of basic business accounting as involving statistics, but accounting is about accurately converting business realities into numerical data that can be better understood and, therefore, more useful to owners and managers as well as creditors and investors.
Statistics and Employees
Evaluation of employees is one of the most common uses of statistics in the workplace today. Almost all companies or business owners have some kind of statistics-based evaluation of employees in place, whether it is the number of widgets produced per hour or net sales in a quarter. Employers use this statistical data to make decisions about staffing as well as compensation and promotions.