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Archive

Committee on Competitive Faculty Compensation
and Salary Equity (2000) Report

To:         John Wanat, Provost and Vice Chancellor

From:    Mark T. Harris, Chair of the Committee on Competitive Faculty Compensation and Salary Equity

Re:        Committee?s report and recommendations

Date:     October 11, 2000
 

The former Provost, Kenneth Watters, appointed the Committee last spring with a membership consisting of Margo Anderson (History), Margaret Atherton (Philosophy), Jay Beder (Mathematics), Lauri Glass (Nursing), Mark Harris (Geosciences), Gennevieve McBride (Journalism and Mass Communication), Janice Miller (Business), and Erika Sander (Academic Affairs).  Jay Moore (Psychology) replaced Lauri Glass as the University Committee representative in Fall 2000. Paul Fischer (Office of Resource Analysis) provides staff support.

The Committee first met in late February, and met weekly or biweekly throughout the rest of the Spring semester and three times in the early Fall semester. The committee began by reviewing the Provost's charge to the committee in his memorandum of January 14, 2000.  The Provost asked the committee to "prepare a report on the compensation needs and a plan for increasing compensation levels over an appropriate period of years consistent with Investing in UWM's Future."  The Provost also asked the committee "to include salary equity as part of its larger charge to study faculty compensation at UWM."

The committee began to address these charges by focusing on the issue of salary compression, since it seemed to be the most pressing campus-wide problem.  Salary compression is a problem that can be identified in terms of market forces and fixed relatively quickly.   The maximum estimate for fixing compression based on the model analysis outlined below is $3.6M.

The committee strongly recommends addressing compression before turning to other potential issues because the effects of compression are so pervasive that it masks any other problems.  For example, the method outlined below will not be applicable to professors at salary levels above the peer market model outlined below, because some of the most productive faculty may still be undercompensated to their market value.  The committee strongly recommends that this issue of retention of our top performers be addressed separately (and soon).

We have not addressed salary equity because (1) the last study indicated equity was not a problem at UWM, (2) compression is pervasive enough to make the identification of equity problems difficult, and (3) an appropriate analysis requires more staff support than has been available to the committee to date.  The committee is willing to examine this issue if so directed, but this will require additional time and support.

Salary Compression

The committee argues that salary compression is a significant and pervasive problem within the current compensation structure.  A comparison of UWM?s average rank-specific salaries to the nationwide averages (Table 1) indicates that full professor salaries at UWM are below national averages, associate professor salaries in the aggregate are near the national average, and assistant professors are somewhat above the national averages.  The pattern is similar within individual departments, although many departments have associate professor salaries considerably below those of other institutions (Table 2).

Our interpretation of these data is that UWM offers salaries to assistant professors that are at or just above the national average.  This is due to competition from other institutions for talented faculty members.  However, salary increases do not keep pace with other universities, so our compensation falls below that at other institutions.  This shortfall is reflected in the necessity to make counter-offers when other universities attempt to recruit UWM?s best faculty.  We can identify several reasons for this:

(1) UW-System annual salary increases have rarely even matched inflation over the last ten years.  Therefore, the funds available for salary increases have remained inadequate for an extended period of time.  As individuals spend more time under this salary structure, their salaries fall farther behind those at other universities.

(2) The funds available for distribution are largely tied to the current base salaries within a department.  A department with substantial aggregate accomplishments has little access to additional funds to reflect their accomplishments or market forces, and not all units have utilized base adjustments to reflect these factors.

(3) Executive Committees within departments have a limited allocation for salary increases.  Typically, any ?cost-of-living? adjustment is included in ?merit?, so it is unusual for Executive Committees to avoid awarding some increases to everyone.  In recent years, Regents? salary guidelines have required at least one third of the "merit" package be allocated for "solid performance," again diminishing the "merit" portion of the allocation.  At the same time, because the salary pool is relatively small, it is difficult to award the substantially larger allocations to full professors that would be needed to prevent compression.


Model to Identify Compression

The committee recognized that campus-wide average salaries provided insufficient guidance for remedying the compression situation.  The committee chose to extend the peer market median mode of analysis (currently used by System to determine overall salary averages for the three types of campuses in the system).  Under the assumption that individual disciplines represent different salary markets, the committee decided to compare each department's salary pattern to the information on its equivalent discipline, using the nationwide dataset available through Oklahoma State University [1] (hereafter referred to as the OSU data).

We also extended the peer market median mode of analysis by recognizing that salary involves far more than just rank.  After discussion, we developed a model for identifying potential compression based upon time at rank.  This model serves to identify individuals whose salaries may be compressed, relative to other faculty of the same rank with the same years of experience at rank in their disciplines.  Note that the model is designed for potential identification of compression only.  It is not used to assign salary increments to correct for compression.  (That evaluation requires an assessment of contributions and accomplishments as well as longevity - see next section.)

The model uses the OSU data for average salary by rank within each discipline and some simple assumptions regarding time at rank.  The model incorporates the following structure (Figure 1):

(1) Assistant professor salaries are assumed to stay in line with national trends.

(2) The base (year 1) salary for an associate professor is set at $5000 above the average assistant professor salary (as given in the OSU data).  This assumes that a promoted assistant professor would be above the average rate, and that there is a promotional increment.

(3) An associate professor typically spends up to about ten years as an associate before promotion.  The average salary would be at year 5 and is taken from the OSU data.  The model ?salary curve? plateaus after ten years at rank because an individual should be promoted to full professor by that point.

(4) The base (year 1) salary for a full professor is set at $5000 above the associate professor salary ?plateau?.  Given a normal career progression, the average full professor salary (taken from OSU data) would occur at year ten.  The rate of salary increase is extrapolated to twenty years at rank because that is about the time of normal retirement (middle to late 60s).

A unique curve can be generated for each department by using the OSU data for each discipline.  The provides a backdrop for assessing possible compression within individual departments.  Faculty members can be plotted within the context of their discipline (see Figures 2-7 and the Appendix for examples).  Faculty below the model line most probably have salaries affected by compression.

The total dollar amount for all faculty members who fall below their respective departments? salary model curves is estimated at $3.6M.  This is an overestimate of the total funds needed to address compression because some faculty members are below their expected salaries due to factors other than compression.  A minimum estimate of the funds needed to address compression is $2.5M if the salary variations from the model are summed at the department level.


Recommendation for addressing compression

Procedure

After developing this framework, the committee considered how to address salary compression.  After some discussion, the committee recommends the procedure outlined below.

(1) Meet with department chairs to describe and discuss the plan for addressing salary compression.  We suggest that this step could occur during the annual ?chairs retreat?.  Chairs will be asked to provide feedback on the accuracy of the model information for their respective departments.

(2) Following this discussion, each department receives the model analysis of its salary structure (along with an explanation of the model and the overall procedure outlined here).

(3) Individual faculty members who fall below the relevant salary curves write a one-page summary of their accomplishments over time.  This is their opportunity to present their cases for additional salary.  The department chair compiles the individual summaries and forwards them as a package with the salary model to an ad hoc committee (step 4).

(4) Ad hoc committees for each division review each department?s package and recommends salary adjustments to address compensation.  We recommend that committees be appointed by the Faculty Senate.

(5) The ad hoc committees? recommendations are returned to the departmental executive committees for comment.

(6) The original departmental package, ad hoc committee recommendations, and executive committee comments are forwarded to the appropriate dean.

(7) The dean sends on recommendations for the Vice Chancellor?s action

This structure may appear a bit awkward, but it does allow appropriate commentary by the affected parties.  The committee recommends the use of ad hoc division-level committees (step 4) because of some of the problems inherent in having the Executive Committees make the initial recommendations (see above).

Timing

Ideally, salary recommendations to correct compression should be decoupled from the annual merit exercise because they address two different salary issues (compression versus market, meritorious achievement).  The committee urges that the Provost and Chancellor implement a plan to counteract salary compression.  Such a plan should be developed in consultation with the University Committee and other governance bodies to assure campus-wide ?buy-in? to any proposed remedy.

Discussion

If sufficient funds were available, this exercise should provide the mechanism to put the "compression" issue to rest for the faculty salary structure.  We have tried to integrate the workings of the promotional system in the structure by creating plateaus for salaries at the tenured ranks.  We see the exercise serving to remove one of the greatest impediments to responding to other salary concerns, be they equity, morale, or other issues.

Nevertheless, we can also see from the data we have assembled that the major immediate beneficiaries of the exercise will be full professors (Table 3).  This is because compression is not evenly distributed across faculty ranks.  This will needed to be explained to faculty and UWM's publics as the proposal is discussed.  The committee has also discussed additional issues, including the need to retain the most productive senior faculty, that will need to be addressed.

Future

The committee recommends that an analysis of salary compression be part of the planning process in the biennium budget process.  This would allow this issue to be addressed before it had such a major impact on UWM?s salary structure.  We think that this would also lead to the more invisible benefit of having a secure and happy faculty.


Other compensation-related issues

The committee discussed many other aspects of the faculty salary situation, including procedures for base adjustments, responding to counteroffers, and the impact of the fringe benefit package on the total compensation package.  We are willing to continue to address these issues if suitable data exist and there is interest in doing so.  We could also examine the equity issue given sufficient time and support to revisit and rerun the earlier equity analysis.

Figure 1: Salary model...........................................................................................p. 5

Examples of department salary plots versus their respective discipline-specific model...p. 6-11

Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7

 

The following tables and appendix are NOT included in this WEB presentation.

Table 1: Comparison of UWM to OSU salary data with each rank pooled..............p. 12

Table 2: Comparison of UWM to OSU salary data by department.........................p. 13-20

Table 3: Distribution of potential compression shortfall by faculty rank...................p. 21

Appendix: Plots for each department with faculty plotted against OSU-based salary model.............................................................................................................p. 22-72



[1] Office of Planning, Budget and Institutional Research, Oklahoma State University. Faculty Salary Survey of Institutions Belonging to National Association of State Universities and Land-Grant Colleges