Rankings and Presidential Compensation

Stunning! Boards should be concerned with how well a president leads an institution to fulfill mission, the quality of teaching and learning on campus, the intellectual and social climate for faculty and students. The US News criteria have little to do with what actually happens on a campus; they are indicia largely derived from factors of wealth (e.g., alumni giving, endowment-per-faculty-capita, etc.) and demographics. Some of these factors can certainly be manipulated to improve an institutional score (or a presidential salary??), but at what cost to mission and institutional values? The “selectivity rate” is all about barring students from admission to higher education. An institution that wants to improve its US News retention rate quickly will keep out all low income students who tend to be the most at-risk for attrition —- the opposite of what a public institution is supposed to be doing! For more on this see my article in the January 2007 AGB Trusteeship Magazine http://www.trinitydc.edu/about/president/Trusteeship_January_2007.pdf

Pat McGuire, President at Trinity (Washington) University, at 7:41 am EDT on March 19, 2007

I agree with Joseph

This has worked **SO WELL** in the private sector that it makes perfect sense to move it into universities. What will they think of next??

Dr. A., Professor at The University of Virginia, at 8:55 am EDT on March 19, 2007

Pay for Improved Rankings

In 1999, Virginia Commonwealth University, as part of its strategic planning process, established a goal of moving from Tier 3 to Tier 2. In 2001, it adopted “Becoming a Tier 2 National university: The Future of Virginia Commonwealth University,” which contained goals and strategies specifically linked to US News rankings criteria. The board of VCU promised President Eugene Trani a $25,000 bonus for every year the institution was ranked in Tier 2. Officials at VCU were very open about the planning process being explicitly linked to the rankings. I believe it is quite common these days, though it’s less clear how many presidents’ bonus packages are linked to improvements in the rankings. In a survey I conducted in 2001, 7 percent of presidents and senior administrators acknowledged downgrading a peer institution in the survey of academic reputation, which comprises 25 percent of the rankings.This information and more was published in the Fall 2002 issue of Priorities, “The Uses and Abuses of the US News Rankings,” which is available to AGB members.

Dan Levin, VP for Publications and Editor, Trusteeship at Assn of Governing Boards of Universities and Colleges, at 9:30 am EDT on March 19, 2007

Two Comments

First, it is difficult to take seriously attorney Raymond Cotton’s comment that “business people on boards need to keep in mind that in higher ed we are not producing manufactured products, but instead we are educating people, conducting research and providing service to the state, the nation and even the world.”

Frankly distinguishing between educating and training students at American colleges and universities, depending as it does on college or university, school within the college or university, program within the school, and the personal inclinations of hundred of thousands of students, is a very difficult enterprise. Based on nothing more than my experience teaching in colleges and universities in the U.S. for almost fifty years, I would be willing to wager that any serious and well-conducted study of the education and training of students in America — and focusing attention on students as the “experimental units” (where it matters most) — would conclude that training is the raison d’état of a significant majority of those students ... at least 60%.

See, for example, “Blah, Blah, Blah ... Blah, Blah” in ...

http://www.insidehighered.com/news/2007/02/07/programs

In other words, in a manner that has been “hidden” from the faculties of colleges and universities and from society – although they have all “voted” with their inaction – higher education has been Hell-bent on changing itself from a place where students went to be educated to a place where the masses expect to be prepared for their first jobs ... and, oh by the way, helping them get that job is a formal part of the process.

No lectures please, I know there are lots of counter-examples.

Second, the obviously mediocre School of Business at a local private university was confronted with the options of closing up shop or “rescuing itself” by getting AACSB accreditation. Three years ago they hired a new dean, a man with no scholarly credentials whatsoever, who was “well-placed” within AACSB. And it was widely rumored that his contract included a clause that promised a sizeable bonus that would kick in if the School achieved AACSB accreditation.

I imagine anyone who knows AACSB understands that its reputation and resources depend on the number of colleges and schools of business it certifies. Much of the process is a paper chase, and if you’ve got the will and an “in,” then you’re in ... and without much regard for the quality of training (not education) of the students in those colleges and schools. I like to think of AACSB as a poor boy’s NCAA.

In any event, the university’s AACSB accreditation will be announced next month, and since the university is private I suppose we won’t know if the dean got his bonus ... or if he did, how much it was. But I am confident that the sort of quasi-business transaction suggested in Scott Jaschik’s article is the wave of the future in higher training (higher tr.).

I suppose it is just a matter of time until the NCAA teaches some enterprising organization how to write a computer program to aggregate the USN&WR, the Washington Monthly’s College Rankings, the Fiske Guide to Colleges, the College Prowler, the Princeton Review, etc rankings to get the definitive BCS-like list. When that happens, I trust the annual announcements will be made on four-hour extravaganzas on national tv, hosted, of course, by Simon Cowell, Paula Abdul, and Randy Jackson. God, I love that image.

And by the way, when that happens, I’m coming out with my Fantasy College game.

RWH, at 9:56 am EDT on March 19, 2007

The President of Arizona State makes $500,000 a year. What is the incentive for him to achieve the 10 goals for an extra $60,000? Could the boss, Tony Soprano, have gotten him a better deal?

The bottom line (speaking business)is he really going to do the work himself to reach those 10 goals? I don’t think so. He will delegate the responsibilty to a team(Admissions, Marketing, etc.) on campus to do the job. Will he offer an incentive bonus to them??? I don’t think so.

NCAA...American Idol...Sports and Hollywood.That unfortunately is the driving force defining America’s character, today. It is just spilling over to education-top down.

Gail Casper, at 4:01 pm EDT on March 19, 2007

Principal-agent problem

I agree with Gail Casper that there is a problem with most senior executives’ performance bonuses being awarded for the performance of subordinates. However, the president will presumably change subordinates’ incentives to reflect their own, and presumbably the goals of the trustees.

This is related to a broader problem of executives being paid far more than they are really worth because they appear to be worth all their subordinates’ work and ideas that are ascribed to them. But lest we get too sanctimonious let us recall that heads of research labs often claim ‘honorary’ authorship of work they did not do but which was done in their labs.

Gavin, Principal Policy Adviser at Griffith University, Australia, at 8:46 pm EDT on March 19, 2007

Bad Business Sense By Trustees

US News rankings are based on some set of criteria. We can presume those criteria are meaningful, and that some of those criteria were deemed meaningful by the trustees for separate bonuses, too. So achieving the US News ranking could achieve double-dipping for one or more real goals if all goals were met. I don’t know the likelihood, but the principle is distasteful.

On the other hand, the US News ranking advancement could be achieved without achieving any other goal by advancing some goal that the trustees don’t consider important. Or by no action on campus, just by the whim of US News.

The trustees have set a dysfunctional environment. This is not good business sense. Based on this alone, US News should lower the ASU rating.

William Lautenberger, at 5:01 pm EDT on March 23, 2007