The University Record, June 7 , 1999

CESF cites need for compensation policy, effect of outside offers

By Jane R. Elgass

The challenge of escalating competition for faculty and the absence of a compensation policy were emphasized by Scott E. Masten, chair of the Committee on the Economic Status of the Faculty (CESF), in a presentation to the Regents at their May meeting.

The competition for faculty is a “severe challenge” to the U-M, Masten said. “If you don’t meet the competition, you lose some of the best faculty. When you do match an outside offer, the funds are drawn from a pool, resulting in fewer dollars for merit raises for faculty doing their jobs.”

The bidding wars for faculty cause problems for deans, directors and department chairs, resulting over time in large discrepancies—$30,000 to $40,000—in salary compensation in individual units.

“The effect of this,” Masten noted, “is that faculty learn they have to get an outside offer to increase their U-M salary.” They redirect their time and effort from committee work, student contact and other contributions to the “pursuit of outside offers and to activities in general that increase their attractiveness to other institutions.”

A written report that accompanied Masten’s presentation noted that CESF is reviewing recommendations made in the 1996 “Report of the Task Force on Recruiting, Retaining and Nurturing the Exceptional,” and discussing ways to minimize the impact of outside offers on unit budgets.

“Unfortunately,” the CESF report notes, “the problem created by competition for faculty is one that ultimately can only be addressed through the expansion of resources for faculty compensation. It is therefore crucial that the University continue to give faculty compensation considerations attention early in the budget process.”

CESF has worked over the past year with the Office of the Provost on the development of a compensation policy. A proposed “Compensation Policy Guidelines for Faculty and Primary Research Scientists” was endorsed by Senate Assembly in May 1998. (See www.umich.edu/~sacua/cesf98.html on the Web.)

Adoption of such a policy is important, Masten said, “to ensure openness in the decision-making process and that compensation decisions are used only for legitimate purposes.”

The University, he noted, “has an elaborate system for tenure and promotion decisions. Salary is another important decision, but there is no policy, no guidelines.”

“CESF recognizes the need for discretion and flexibility, but wants to make sure discretion is not misused.”