Decompressing Salaries

February 11, 2013

It’s a dilemma many universities face: how to attract new, top faculty with competitive salaries without being unfair to senior professors, whose salaries often are tied to a pay scale or plan that hasn’t kept up with the outside market.

Weighing recruiting needs against a desire to alleviate the morale-busting effect of salary compression on faculty, one Midwest university has launched a series of initiatives to address it.

“When you go out on the job market, the only time you’re in a good negotiating position is when you’re first hired,” said James Simmons, professor of political science at the University of Wisconsin at Oshkosh and president of its Faculty Senate. “And when you look at inequity, the largest inequity is between those who negotiated well or in a lean market for high-demand jobs [and everyone else]. Once you’re there, there are ways to increase your financial position, but they’re still limited; there are only so many ranks.”

The reality of the academic job market today is that while superstars or those who in a few select fields are sufficiently in demand to command top dollar, many senior professors are not -- and so they end up with minimal raises year after year. And that reality means that good campus citizens who take on the introductory courses, or devote extra time to advising -- in other words, those who do the work that makes a college education meaningful for students -- can feel they are taken for granted.

Since 2000, the Faculty Senate, in partnership with university administration, has introduced “professional productivity” salary increase opportunities for full professors; a salary equity plan in which “equity funds” are distributed to individual faculty members based on recommendations from a faculty committee, college dean and provost following a regression analysis of internal peer salaries; and increases in percentage pay jumps for promotions. The first two initiatives alone resulted in $945,000 in additional pay to faculty members (some of whom received additional benefits from both efforts). An expanded salary equity plan, in which all faculty will automatically be considered for equity funds and in which performance and salaries at regional peer institutions will play more of a role, takes effect next academic year. It's estimated that 70 percent of faculty will qualify for benefits under this new plan. (That's in addition to a pre-existing faculty development fund that gives out $500,000 annually to individual faculty members for professional enrichment.)

Salary Compression Initiatives at UW Oshkosh
 
Professional Productivity Pay Increases Full professors can apply for a performance-based pay jump of 7.5 percent (based on average professor salary) every eight years, to achieve the rank of "distinguished professor." In six years, 45 of 57 to apply have received base salary increases totaling $240,000. (Professors can reapply four years after an unsuccessful bid.)
Salary Equity Plan Each year, 20 percent of faculty members are considered for additional "equity funds" based on the recommendations of a faculty committee, college dean and provost following a regression analysis of internal peer salaries. In three rounds, more than $700,000 was distributed to faculty. (A new equity plan, for which all faculty will be eligible and in which merit and regional peer institution salaries will play more of a role, takes effect next academic year.)
Pay Jumps for Promotions Instead of 3-4 percent raises for each new rank, tenure-track professors now make 6-7.5 percent more with each promotion.

While it’s not a complete solution to the problem of salary compression, faculty have been appreciative, said Lane Earns, provost, especially in the face of decreased state funding for higher education spanning many years that’s resulted in leaner pension packages and growing mandatory contributions to health care plans. That's all made new faculty harder to recruit, given that Oshkosh salaries already are 18-20 percent below those of comparable institutions, on average. (All of Oshkosh’s salary reforms have been funded internally, by initiatives such as a dual enrollment credit program with local high schools.)

“We still obviously need state support, but at least we’ve shown faculty we’re willing to do as much as we can and are being as creative as we can to deal with problems as they arrive, and get us through to when there might be more support coming our way,” said Earns. “Certainly it wasn’t [senior faculty’s] fault that the market had changed and put them in a difficult position vis-à-vis junior faculty being hired.”

Across Higher Ed

Broadly speaking, it’s hard to tell how widespread a problem salary compression is.

“Unfortunately, we don’t have precise quantitative measures to define this concept,” said John Curtis, director of research for the American Association of University Professors, but it typically comes about in two ways. First, faculty pay tends to increase over time at the rate of inflation, as with cost of living increases. But new junior faculty members often negotiate their salaries at the “market rate,” which, depending on a variety of factors, can outpace inflation.

Second, salary compression – or even salary inversion, when senior faculty make less than junior faculty – can reflect the market between different disciplines. Business, law and medical field professors tend to earn much higher salaries than their counterparts in other disciplines due to more lucrative job markets outside higher education. This makes them harder to recruit and forces up initial salary offers.

Salary compression and inversion arise for both reasons at Oshkosh; even after initiatives to address it, salaries vary widely between colleges and conspicuously less widely between ranks of professors within individual departments. In accounting, for example, part of the College of Business, assistant professors make $120,000 on average, while full professors make about $98,000. In English, in the College of Letters and Science, assistant professors make about $50,000 on average, while full professors make a little more than $67,000.

However sound the reasons for salary compression, Curtis often hears complaints from faculty members and said there are good reasons for colleges and universities to address it. “It’s really a morale issue,” he said. “It’s telling faculty who have chosen to stay and help build a particular institution that their contribution isn’t necessarily valued…. It’s a disincentive to be loyal and it can be a negative thing for a particular institution.”

Simmons agreed. "Some of the best, most accomplished people leave," he said. And even when they don't, Curtis said faculty sometimes seek out job offers from elsewhere in an attempt to secure a counter-offer from their current institution.

Transparency is key to reform, Curtis said. “The whole process should be opened up and made transparent by having a faculty committee that has full access to [salary] data make recommendations about how the hiring process is structured.” At Oshkosh, faculty committees have been key in drafting and executing pay equity plans; the university also has hired an outside consultant to help improve the plan.

Still, there’s no “fixing” salary compression for good, as market realities seem to demand it.

Rosemary Smith, dean of the College of Nursing at Oshkosh said it’s already a struggle to recruit “doctorally prepared” faculty (she could hire 10 new members but is only currently advertising for five due to the low application rate; only one person has applied since the fall semester), even before salary negotiations can begin (assistant professors of nursing make about $66,000 on average; full professors make $79,000). “We have millions of people who are unemployed, unfortunately, but we don’t have the people credentialed to come into where there is the greatest demand in higher education.”

Even in political science, in the College of Letters and Sciences, salary negotiations can turn off top candidates being offered Wisconsin market rates ($51,000 on average for an assistant professor, compared to about $68,000 for a full professor), Simmons said. "Sometimes we'll have to go down to the fourth, fifth or sixth choice."

 

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