Wednesday, March 04, 2009

Compressed

It has been at least several days since I have talked about MONEY, even though my university has recently proposed some truly bizarre money-saving schemes that fall in the heading of 'let's look like we're doing something even though it won't save any money and will make it harder for faculty to do research'.

But let's ignore for the moment the issues of recessions and salary freezes and pay cuts, and consider the evolution of faculty salary over a typical career. In the course of a career at a single institution, most of us get a higher salary as time goes on, with a few moderate to large-ish jumps here and there after a promotion or as a result of retention negotiations.

There are only 2 promotion steps in an academic career (excluding moves to administrative positions), and at some institutions the 'promotion raise' is not impressive. That leaves retention packages as one of the primary ways to get a major increase in salary. In at least some cases (e.g. mine), the retention-related raise is not a way to augment an already high salary. It is a way to raise a salary to the level of one's peers.

So, in my career so far, I got one big raise a couple of years ago as a result of being recruited by another university, and I got another when a new department chair realized that my salary was surprisingly low given my research-teaching-service accomplishments, especially when compared to other faculty at a similar level of seniority.

That last statement leads to all sorts of complex considerations (and emotions): What is your salary relative to other faculty in the same department?

And not just faculty: Some grad students on fellowships make considerably more than grad students with teaching assistantships or even some research assistantships even though they are all doing similar work (and in fact, TAs may be working more).

Salary compression is a common phenomenon, not just in academia. A new employee is hired and negotiates a salary, and in some cases this salary may be similar to or higher than that of more senior employees. In academia, this causes disgruntlement in faculty who started at lower salaries, and who, in a typical system of small annual raises, may always be 'underpaid' relative to more recently hired faculty.

Universities typically do not have sufficient funds to uncompress (decompress?) salaries every time new hires are made. As a result, if you graph salary vs. seniority for faculty in some departments, you get a scatter-plot.

Example: Some of our newest faculty did very well in their negotiations with the chair/dean about salary, and have salaries that are equivalent to those of some associate professors (and even some less active full professors). Aside from the morale of lower paid faculty taking a hit, what are the implications of these (relatively) high salaries? Do they come with higher expectations for productivity?

In fact, a trend in some departments is to give assistant professors less teaching and less service than was the norm in days of yore (see yesterday's post). So now we have a situation in which 1st year assistant professors teaching 0-1.5 classes/year and just getting started with research have a higher salary than more senior faculty who teach a full course load, do lots of service, and maintain a reasonable research program.

My opinion regarding my well-paid younger colleagues: (1) Good for them for getting the salary they wanted, (2) Expectations for productivity of new faculty should be high but reasonable no matter what the starting salary, and (3) If that's the going rate for productive faculty, then the salary structure of the department will need some serious decompressing.

If I have to realign my own salary by getting another outside offer, so be it, but a better system would be one of proactive merit raises for productive faculty on a routine basis.

That requires $$, but once this recession is over, everyone has been bailed out, the crumbling infrastructure has been repaired, hiring freezes are defrosted, and universities have built awesome new student centers and sporting venues, I hope that there will be some money left to raise the salaries of hard-working faculty whose current salaries are mired in compression.

24 comments:

TheRedBaron said...

Great post! It's funny how it is completely unknown how different institutions set salaries, and even what really goes on within our own institution is a mystery to most of us. I am a PhD professor working entirely on soft money (i.e. no contribution from the university - only NIH grants) a medical school, and we use an X+Y+Z system for setting what a professor's salary is. The X component is the lowest salary a person can earn and be hired at that academic rank (this goes up at assoc prof and full prof depending on years of service). The Y is a negotiated bonus depending on what level of grants you are bringing in - it is usually some fraction of X, like 20-60% of X. And the Z is any consulting money, like honoraria for talks, prizes, fees for service (this is usually not a very large component of anyone's salary). The total X+Y is what you are allowed to write down in your grant budget, and I guess it's kind of a market rate to make sure someone doesn't write in a ridiculously over-inflated salary (which would lead to the grant not being funded). But it does raise the odd question - why not write in a higher number in the grant budget, and pay yourself it if you win the grant? The chair does not allow that, but it would certainly be a fun way to set salaries. I am interested in (1) do other schools have this system, and (2) do people think their salary scales are fair? In our school, nobody knows what each others salaries are (I am not sure how you found out, FSP?)

Anonymous said...

I have never understood how this standard academic practice evolved (requiring competing offers before providing significant merit increases). It seems to create a perverse set of incentives. I am at a rare institution where substantial notches in productivity (big new grants and high impact papers) are proactively rewarded, and I find that productivity, morale, and teamwork are greatly enhanced.

Gingerale said...

I hope that there will be some money left to raise the salaries of hard-working faculty whose current salaries are mired in compression.

You said it, FSP. At my place compression is outrageous.

Anonymous said...

I'm curious as to why professors today are being hired at higher salaries than your generation of PhDs was. Are there more openings now and therefore a higher demand for faculty compared to when you signed on?

Anonymous said...

To TheRedBaron: You must be at a private institution. At most publics, salaries are public information. They used to be somewhat hidden at the library reference desk, but today are often found online if you know where to look.

Anonymous said...

TheRedBaron: I think my PhD advisor made a significant amount of money from legal consulting at times. Probably more than his base salary, judging from the amount of time * the consulting rate.

In Ontario, all public sector (including faculty) salaries above $100k must be published every year.

Anonymous said...

The problem with your plan (a voluntary decompression) is that it ignores the market. Salaries are compressed because the market for your junior faculty was different from that for your senior faculty (the junior faculty presumably had a better negotiating position that allowed them to ask for higher salaries). The senior faculty, however, didn't have that position when they were hired, and thus had lower salaries. If salaries really are compressed relative to the market, the professors prove it by getting other offers, and are then able o get raises, because they've improved their positions. It's ridiculous in some ways, but it's the way markets work. Arguing for some other form of correction of compression implies that there's a fairness doctrine (yes, unions try to develop and enforce those, an option for faculty who want to unionize) or that when the junior faculty negotiates his higher salary, the university should really be thinking of the event as negotiating everyone's salary.

Kim said...

I've recently discovered that the median starting salary for a professor in my field is higher than mine. (And in a state where a constitutional amendment requires recession-related budget cuts to be permanent, and where salaries are likely to be cut this year, it's probably going to stay that way.)

Notorious Ph.D. said...

I'm at a public U, where salaries are public info. We've been through salary freezes galore, and somewhere (year four?) a colleague and I realized that our new hires were being brought on at $500 a year less than we made after several years of service.

However, there's a possibility of applying for something called an "equity pay increase" -- it's not merit-based, but simply equity-based. There's no guarantee you'll get one, and it's contingent on there being funds there, but it's there.

However, you have to *know* it's there. Faculty tell each other about this through word of mouth, and you have to dig up the procedures for applying. Still, it's better than having to go on the job market.

Laure said...

I just got offered a tenure-track position at a small technical university (teaching focused) as an assistant professor. I'm curious if you think there is room to negotiate salary in this instance. I feel the salary seems on target for positions like these and I was just going to kind of let it be if I accept. Am I being a young naive woman? Looking back I have been kind of screwed over in graduate school in terms of salary and fellowships. I've let that go but your post got me thinking. I'm already going to have to negotiate a small start-up as well that they don't tend to dole out for some computer software etc. and the thought of negotiating kind of makes me nauseous.

Anonymous said...

Laure: Negotiate! You must. I wasn't going to because I thought the salary being offered was fair. I was lucky that I was told to ask for more money (Dean was active in a program regarding the status of women and circumstances were such that if I didn't get a fair shake, it would have rapidly become evident). I negotiated both the salary and start-up. After seeing FSP's post today, I dug up salary info for my public Uni and discovered that my asst prof salary is up there with at least one associate prof that has been with the dept since the early nineties and nearly 10k more than a recent hire (female) who did not negotiate. If my salary wasn't already so out of line with the rest of the department, I think I might have actually got more (what I ended up with is less than I asked for). Make sure you get what you're worth. Women tend not to ask and that's why we don't get. Rule number 1: Negotiate. They expect you to and have often left room in the offer to allow for that.

John said...

In a more objective view - compression mean some people are underpaid, but others are OVERPAID given the fixed number of dollars in the university budget each year. I'm only seeing discussion here of how salaries can be raised, not the high salaries cut, for understandable but myopic reasons. Decompression is actually a widely-understood code for increasing the salary load for a department, college, or university, not an income redistribution initiative.

I'm afraid it is simple economics. The greater the level of ignorance, the greater is the administration's ability to save money by shortchanging the salaries of faculty who are loyal enough to never demand a raise that they deserve.

For my department (state school), the salaries are all posted, and I charted the seniority, salary, and Web of Science citation total count last time equity in pay came up, this past winter. Obviously, teaching and service also are a relevant factor. The Chair found the numbers useful, but the faculty preferred to dwell on largely imaginary potential future retention cases in doling out priorities for raises.

The bottom line, in my view, is that departments are almost totally incapable of evaluating their own faculty - at least the faculty that are not willing to become retention cases.

Margaret L said...

I work for the University of California, which has "steps" within each of the usual three ranks. Salary for each rank and step is set for the UC system as a whole, and although desirable faculty can get salary "off-scales," the whole thing is more transparent than at other places. So that's a good thing.

What hacks me off is a related issue, which is that faculty who beat the bushes for competing offers get tenure sooner than those who don't. I understand why it happens, but in a system that's supposed to be merit-based, it's a crazy way to decide merit. Get some *other* university to judge this person's merit, and then react. It also penalizes the folks who don't want to be bothered with a job search, and prefer to stick around and do their research.

John said...

for Margaret L

UC does have a nice transparent (and generous) system. It is a clear advantage to have a well-defined process, although in detail each campus has slightly different rules.

On the other hand, processing promotion packages every 2 to 4 years is a colossal headache. The many steps requiring outside letters tax letter writers, especially those annoyed with the lack of assured confidentiality. The cases never reach saturation - after the 20 or so Asst, Assoc, and Full levels, one reaches the Above Scale promotions, every four years until retirement.

It also tends to lock-step the majority onto regular promotions, and extreme achievements or extreme incompetence is needed to accelerate or decelerate one's rise through the ranks.

yolio said...

It just goes to show that what you are paid has little to do with what you are worth or with how hard you work or even how useful you are. See nuses, school teachers, childcare providers and hedge fund managers.

Pagan Topologist said...

I did get a fairly significant raise in the 1980's just by arguing that I should not be penalized for not looking for competing offers. I had been a (full) professor for about seven years and got a raise of more than 10% in addition to the normal merit plus COLA raise. Salaries are confidential here; there is no way to find out what a colleague earns unless the colleague tells you, and this is discouraged. At one time it could have led to termination, though probably not now.

Anonymous said...

There's another thing going on with academic salaries, however, which
is that job retention (and raises, for the most part) are not
typically merit based. That is, at many universities (ignoring this
year), most faculty get approximately a 3%/COL raise per year.
Perhaps a few people will get a little extra bump due to some
significant honor, or a large potential bump through an external
competing offer.

What this means, however, is that the salaries are still the highest
at full professor rank. Which one could certainly argue is
worthwhile, except there is a huge difference between research-active
full faculty and those that are effectively just teaching.

And so while the research-active faculty (which presumably is most of
associate profs and all of assistant profs) bring in significant money
to the universities through grant overhead and whatnot---and continue
to perform new research, raise the reputation of the university,
etc.---senior research-inactive faculty are pulling in some of the
highest salaries, due to yearly raises.

This is quite different from the business sector. You typically don't
see senior executives, after a period of service to the company,
continue to hang around for 10-15 years and pull in ever higher
salaries and perform a fraction of the work.

So you point out one problem with salary compression on the one hand,
but speaking as a junior science faculty, there's also the converse
problem of overpaid inactive senior faculty.

John said...

As the previous poster notes, overpaid senior faculty may be the biggest inefficiency on the payroll. However, there is next to nothing that can be done to us, so properly lowering our salary or shoving us into retirement must wait until we get older and less able to defend ourselves.

Contrary to the description in the previous post, at institutions I've seen, the junior faculty are not the most flush with grant money and overhead-generating prowess, even though they may well produce the most research. It usually takes time to attract the major grants and assume leadership of big projects.

Further, the distribution of grant money is not a Gaussian curve - it is more fractal. Often a few big grants dominate a department, and there is an ample middle class, and a sizable fraction with few active grants - it is these big grants that are overwhelmingly run through senior faculty.

DrDoyenne said...

Having worked at a university for years, I'm aware of this strange situation of new faculty making more than some senior faculty. Like TheRedBaron, I was a Research Assoc. Prof., non-tenured, and on soft money. Although I brought in $$millions in grant money, I was making less than some technicians (talk about demoralizing).

I now work for a US Federal agency, which has strict pay scales and automatic step increases at mandated intervals. I estimate that I'm now making twice what I would have been had I stayed at the university.

We (scientists) are automatically reviewed by two external panels (one composed of peers and another of higher-level officials) every four years (sooner if we request it). As at the university, we prepare our own "evaluation package" according to a set format.

The review can result in a promotion, retention in grade, or demotion. The latter is the incentive to produce, although by university standards we are not expected to be very prolific in terms of publication. One can also learn exactly what is expected by serving on one of the review panels prior to going up for your own review.

It's not a perfect system either, but it seems to be more equitable than the university system in this regard. Salary-wise, I've caught up with (and will soon surpass) my husband, who is a full professor at my original university.

Just another perspective that illustrates another way in which rank, salary, and promotions for women in the sciences can be determined....

zoelouise said...

I have often wondered how much time and money is spent each year interviewing candidates who have no interest in the job, they just want to get a raise back home.

What a waste.

EliRabett said...

TheRedBaron: Ask someone in your Sponsored Research Office what Institutional Base Salary is (not that any human can truly understand this most Byzantine of any federal regulation. Then ask if 100% of it can come from grants and contracts.

Anonymous said...

As a sponsored research office person, I'd expect most universities wouldn't let someone be 100% award funded due to issues related to compensation for other university activities such as mentoring students, teaching, committee work, etc. Occasionally, one may find a truly 100% award funded person but they are rare in my opinion (I've been in the biz 20 years at various places.)

EliRabett said...

They are ILLEGAL because you have to spend time writing grants and you can't charge that to the Feds.

Anonymous said...

I am a public high school teacher in PA who had the opportunity to become an adjunct at a local state U a few years ago. The agreed upon, negotiated salary was decreased with a drop in enrollment, and I was never informed of this until after I questioned my paycheck as being on the low side by HALF. I negotiated the salary based upon my public teacher salary and private tutoring rate, as the school was interested in paying me $20/hr for working with graduate and undergraduate students. (The pay was adjusted, at my insistence- and the prospect of finding a new instructor 3 weeks into a course.)

Every time I hear a woman state that she doesn't feel comfortable negotiating, I ask her if she feels comfortable being taken advantage of. I left my first public school job in extreme anger and frustration, and took the first offer for the next year, which held my place on the pay scale at the first year's salary for two years, with no credit for the first year of teaching. Now, 12 years later, I am on step 11 of a 15 year scale. Had I insisted (as a "rare" chemistry teacher) that I wanted the year's credit, and no step freeze, I would be on step 14. The difference is about $3,000 this year between my current step and if I had come in with credit and moved accordingly. Add the average difference in steps over the years, and I have earned about $20,000 less so far. That's a car. ALWAYS negotiate. They can only say no- and once they offer you the position, they want you. They don't want to go back to more interviews, and time and effort just to find someone. They'll tell you when it is a final offer- then decide.