Faculty Compensation

John DayAssociate Provost for Academic Budget and Planning

Faculty Compensation Task Force

• Provost Krendl - chair• Deans

– Ben Ogles– Charles McWeeny– Renée Middleton

• Faculty Senate Nominations– Molly Morris– Shawn Ostermann– Rajesh Narayanan

• Staff Support– Michael Williford– Greg Fialko– John Day

Vision OHIO Goal

“Compare salary and compensation with peer institutions and meet the goal of raising our percentile rank among peers by 15 points by 2010.”

Key Concepts

• Total compensation approach– Salary– Benefits

• Continuing Full-time Group I Faculty• AAUP ranking among our peer

institutions

Defining 15% increase

To move above Missouri requires $2,400 increase in Total Compensation

Rank among peers is sensitive to the number of peers ranked – 1/11 = 9% and assumes the distance between each rank is equal which is not the case.

Cumulative compensation differentials can be used to create a continuous distribution which can then be used to create a percentile rank.

Faculty Compensation Adjusted for Cost of Living

Source: Appendix B Final Report Faculty Compensation Task Force

Task Force Recommendation• Merit raise pool process should continue as in the past: 3%

merit raise pool with a minimum of a 0% increase and a maximum of 7% for each faculty member. Exceptions to the maximum would require provost approval.

• Structural Realignment Funding, awarded differentially to individual faculty who have demonstrated sustained past performance in achieving college and institutional goals over the previous five years and who show the promise of continuing contributions in the future. Faculty members who have been here for less than five years would be evaluated on the basis of the promise they have demonstrated in their contributions to date.

Task Force Recommendation• Faculty members who qualify for consideration must be tenure-

track Group I faculty working full-time as instructors and scholars. • Engaged in the full mission of the institution – teaching, conducting

research/creative activity, and serving their units • The funding cannot be distributed across-the-board to all faculty in

a given unit. • The minimum amount that a faculty member may receive from the

structural realignment pool is therefore 0%; there is no maximum amount specified.

• For each of the next five years, the same separation of allocation of the raise pool funds from the structural realignment funds would be followed with an adjusted five-year window for the review of each individual faculty member’s contributions.

Task Force Recommendation• A proportion of the total structural realignment funding

would be allocated to each college based on a detailed formula. That formula takes into account both – the total FTE of each college as a proportion of the entire

faculty FTE – and also the total disparity in faculty salaries based on

discipline-specific market comparisons. • The dean of each college would then work with chairs

and directors to identify the appropriate distribution of the funds among the various schools and departments and to identify the individuals who qualify for the additional funding.

• Each dean would present his or her college plan for allocation of the funding to the provost for approval.

Implementation

• Task Force recommends a method for determining how to divide the $1.2M pool across the seven colleges– Headcount– Market disparity

• This has no relationship to how compensation was allocated to faculty within a college

• Simply a way to divide funds into 7 “buckets”

Implementation• Distribution of the college allocation to faculty is

left to each college– Can’t be across the board– Based on five years of performance

• Deans work with Chairs/Directors• Allocation can be based on factors determined by

the college– Equity/Market– Merit – Future Potential– Other

Computation

Source: The Chronicle of Higher Education, based on data from AAUP Academe

Computation

Use of Market Data• The purpose of the market computation is simply to

introduce a rough estimate of market into the distribution across colleges

• It is NOT used in the actual distribution of raises to faculty within a college– Grouped by department – not attempting to get to sub-

disciplines or disciplines with few national peers– No attempt to compare just to universities similar to OU or

to peer groups– Many OU department + rank groupings have only 1 faculty

member so distortion is possible– Many disciplines have extensive salary studies that are

much better at measuring market but others have nothing

Salary Control Total

$1.2M in total compensation would include $1,033,821 in salary

Headcount Allocation

In FY08, 50% was allocated on headcount and 50% on marketIn FY09, the current proposal is 60% headcount, 40% market

Market Allocation

Total Market disparity for FY08 was $1,960,091 compared to $1,306,886 now - getting closer to market

Results of FY08 Allocation

FY08 3% Salary Pool Distribution

52% of the raises were between 2.7% and 3.3%83% of the raises were between 2.4% and 4%

CPI