Senate
Advisory Committee on University Affairs
The
Committee on the Economic Status of the Faculty
2003-2004
Annual
Report to the Regents
June 2004
Committee Members:
Chrisita Ackerman (Pharmacy)
Fred Askari, Chair (Medicine)
Fred Beutler (Retiree)
Neal Clinthorne (Medicine)
Thomas Conlin (Alumni Representative)
Charles R. Cowley (LSA - Astronomy)
Peter Fischbach (Medicine)
Suzanne Gray (University Library)
Gail Keenan (Nursing)
Varsha Mehta (Pharmacy)
Laurel Northouse (Nursing)
Lynda Oswald (Business)
Margaret Terpenning (Medicine)
Support Staff: Mary Mandeville
Mission
Statement of CESF
The
Committee on the Economic Status of the Faculty (CESF) was formed by the
President in 1944 in order to report to the Board of Regents, the Senate
Assembly, and the President on all matters concerning the economic status of the
faculty. CESF investigates,
analyzes, and monitors faculty salary, fringe benefits, extra payments and
competitiveness with other universities. CESF strives to facilitate a more
transparent compensation system throughout the university in order to assist in
the recruitment and retention of faculty.
- - -
Report on Faculty Salary and Composition
Committee on the Economic Status of the Faculty
June 2004
When we think about the economic status of the faculty, we
would like to think about growth supporting the recruitment, retention, health
and well being of one of the most outstanding faculties in the world. In 2004,
the economic issues facing our state translate chiefly into challenges and
uncertainty rather than growth. These challenges exist on many levels. Funds in
many faculty’s and retiree’s variable annuity retirement accounts continue
to be challenged by instability in the equity markets. Day care costs have
continued to rise for others, while many Michigan educators face the daunting
and ironic challenge of funding their children’s own college educations. The
University continues to face challenges recruiting against academic competitors
such as Duke, Vanderbilt, and the University of Chicago which provide tuition
reimbursement for faculty children. Yet,
there is concern that the worst may be yet to come in the area of health care.
While the rate of growth of health premiums has slowed, the lack of
fiduciary planning for retiree health care looms as a challenge and
vulnerability, one magnified by the large size of this institution.
The aging of the baby boom generation and development of exciting improved and new therapies for disease has led to an increase in health costs. While many of these issues are not unique to the University of Michigan and are faced by employees everywhere, other issues such as retiree health benefits present with wrinkles unique to the academic environment. While the University has traditionally had outstanding faculty benefits, these have become strained and challenged in ways that are shocking to the faculty, retirees and members of the business community alike. The faculty continue to be distraught that retiree health care represents an unfunded obligation rather than a secure and sober responsibility here at the University. The University’s obligations to the lives and health of its retirees and future retirees extend far beyond its uncommitted institutional cash reserves, and the University will need to plan to fund these commitments in the near future. Planning for the future should lead not only to budgeting for retiree health care but also to greater fitness and wellness initiatives for the faculty and staff. The Provost is taking the correct approach to the challenge of health care by involving faculty from across the University.
Strategic growth of the University may ease the per employee burden for future retiree health care, but the University must grow judiciously as increased size brings with it increased risk. Ultimately, social and public policy outside the University will impact the cost of retiree health care. It would certainly be tragic if University employees and retirees were to join the ranks of the uninsured in the future due to lack of planning now. Since University retiree healthcare expenses are for policies to supplement Medicare, the institution of a sound Medicare prescription drug benefit could positively impact University costs.
Health
Benefit Statement for 2004 CESF Report
The Committee commends the University on its strong health benefits program. Generally speaking, the program provides an adequate safety net, and compares favorably with programs at most of our peer institutions for both active faculty and retirees.
Nevertheless, we are concerned with several aspects of the future of the University’s health benefits. Some of the concerns are the following:
1. The unfunded liability for the retiree health program is rapidly approaching one billion dollars. This suggests potential difficulties with funding over the coming years.
2. The rapid rise in health care costs and the anticipated growth in the number of retirees exacerbate prospective funding problems. There have already been changes that require participants to expend relatively larger sums as their co pay for health care. As health care costs continue to mount, there is a strong temptation to shift costs to the participants. Proposals in this direction (e.g., deletion of coverage for spouses of retirees) have already been floated.
3. Decisions on health care benefits have sometimes been made without adequate faculty representation, or through structures that only provide an appearance of faculty participation.
In the current climate of financial stringency combined with increasing health benefit needs, it is crucial that the faculty, through its representation by CESF and SACUA, be involved in any decisions regarding changes. Only by due consideration for faculty sentiment can the overall compensation package, of which fringe benefits are a substantial portion, be configured to best meet the goals of the University.
Background/History
The Committee on the Economic Status of the Faculty (CESF) advises and consults with the Regents and the University administration on budgetary matters as they pertain to the economic status of the faculty; formulates specific requests regarding salaries and fringe benefits for faculty members and presents an annual report to the Regents and faculty. For the past seven years CESF has focused its efforts on the development of a set of university wide faculty compensation guidelines. The CESF guidelines were presented to the Regents on April 21, 1998 and endorsed by the Senate Assembly on May 18 1998.
The CESF Guidelines call for basic standards of fairness and consistency:
In addition, to foster confidence in the integrity of the decision-making process, CESF recommended that compensation policies should be:
Subsequently, Provost Cantor appointed a Faculty Compensation Guidelines Study Committee to advise her on implementing a set of guidelines for determining faculty compensation “in order to improve the quality, legitimacy and transparency of faculty salary determination.” The Provost’s Study Committee broadened the agenda for study beyond the annual merit program to include a review of a variety of factors affecting overall faculty compensation, including market adjustments and retention offers. The Provost’s Study Committee made its report and recommendations on April 26, 2000 and was approved by the Deans.
The Provost's Study Committee reported that... "each unit could well benefit from the opportunity for an open appraisal of the effect of their systems of reward for consequences on, for example, productivity over time, equity across race and gender, compression of salaries compared to comparable units in peer institutions, market offers, retention offers, etc." The Study Committee made the following recommendations to the Provost:
The goal of this report is to provide information that can serve as a base upon which the faculty and administration in each academic unit can begin to develop a meaningful dialog about the factors that influence decisions on salary and other elements of compensation. CESF hopes this information will helpful for the faculty and for the administration and welcomes your comments and feedback at cesf@umich.edu
Salary and Benefits are Not the Only Issue
The motivation for working and the satisfaction derived from employment are not solely dependant on salary and benefits. CESF recommends that faculty members and administrators consider the relative importance of economic and organizational factors and of compensation variables in their review of their school’s compensation structure.
The purpose of this report is to provide information that can serve as a base upon which the faculty and administration in each academic unit can begin to develop a meaningful dialog about the factors that influence decisions on salary and other elements of compensation. CESF wishes to caution both faculty and administration that it is important not to take the numbers out of context. CESF's goal is to gather and present the data with the objective of fostering transparency to permit rational efforts to improve faculty compensation and facilitate fair, equitable and optimal compensation and the enhanced productivity and job satisfaction that such compensation fosters. The committee is drawing no conclusions from the data nor recommending policy changes based on the data available at this point.
Several historic compensation trends persist. The committee remains concerned about the existence of a loyalty tax; the possibility that those who remain at the University for long periods of time without soliciting outside offers earn less than their peers. In this regard, attention is focused on faculty whose salaries are low outliers within their cohort. Women tend to be in junior faculty ranks, tend heavily to be on the clinical faculty, and tend to be paid less. Dentistry is more severely affected by a gender wage gap than Medicine, for example, but both schools are affected. The status of women faculty is being studied elsewhere and the reasons for it are only partially understood. This report tracks the salaries of non-tenure track faculty, including Archivists, Curators, Librarians, Clinical Faculty, and Research Scientists. A significant number of Ann Arbor campus non-tenure track faculty, particularly within the librarian and archivist ranks, earned a relatively low salary.
Many faculty from the Flint and Dearborn campuses are also earning less than this rate. We would be remiss if we did not note that a portion of the non-tenure track faculty are engaging in collective bargaining with the University.
The
report will be available as a password protected web based document for UM
faculty and staff and in printed form to others upon request.
Unpublished
Salary Payments
Unpublished salary payments are made for: extra teaching or research effort, administrative effort, or stellar productivity are available for the years. Separate reports on unpublished salary payments for 2000-01 and 2001-02 are available on the SACUA website : http://www.umich.edu/~sacua/salary/salaryreports.htm
The funds for unpublished salary payments tend to be from sources other than the general fund. The Committee requested that the data on unpublished salary amounts be broken down by gender and include the non-tenure track faculty. The committee has worked closely with the administration in obtaining this data. However the committee has not yet been provided with data on unpublished salary payments for the non-tenure track faculty.
Non-Tenure
Track Faculty
CESF is pleased to include data on salary rates for the non-tenure track faculty: Clinical Faculty, Research Scientists, Archivists, Curators and Librarians, in this report. The salary rate indicates the annual salary for appointments at 100%. Please note: some faculty members have appointments of less than 100%.
Administrative Positions
When a faculty member holds an administrative appointment of 100% they are not included in the report. Only faculty members with appointment fraction greater than 0% are reported.
Fractional Appointments
Faculty members are included only once, in the academic unit where they hold the largest appointment fraction. If the appointments are equal the individual is counted in the group of highest rank.
Faculty Composition
Pie graphs show the composition of the faculty in each school and bar graphs show a breakdown of gender by rank.
Faculty Compensation
The box and whiskers graphs in this report have the great advantage of giving a clear and vivid sense of the spread and clumping of compensation within a unit.
For an explanation of box graphs please see Appendix A.
CONCLUSION
The CESF has worked to develop a partnership with the administration in offering this overview of faculty composition and compensation. It is the committee’s hope that this report will be only the first step in establishing an open and productive discussion between faculty and administration about the factors that influence decisions on salary and other elements of compensation in each school. CESF stresses the need for a more thorough review and analysis before conclusions can be drawn from the data.
CESF hopes faculty and administration will find the report useful. The committee asks for your input about the data that you would like to see and the questions you feel are posed by that data that CESF should be exploring in the future. Please send your comments and feedback to cesf@umich.edu.
What is included on the Overview for Each School or College
Over the past ten years the composition of the faculty is changing to include more faculty members who are not on the tenure track. These faculty members include, lecturers, research scientists, clinical and adjunct faculty. CESF has expressed concern that the governing rights of these faculty members should not be overlooked and has requested that the Academic Affairs Advisory Committee take up this issue. The Office of Human Resources and Affirmative Action (HRAA) provides an annual report “An Analysis of Salaries Paid to the University of Michigan Instructional Staff and Graduate Students.” This report shows the salary rates for tenured and tenure track faculty, and for lecturers, but does not include information on these other types of faculty.
Next
Steps for CESF
In order to present a more complete overview for each of the schools and colleges CESF hopes to obtain additional data including: maximum, minimum and median amounts for unpublished salary payments; salary rates and unpublished salary payments by gender, and for additional faculty tracks as well as track changes over time. It is our goal to be able to track positive changes in faculty compensation as they occur, and thereby insure transparency of the salary process.
Please Note: the salary files are password protected. Please contact the Faculty Senate Office for assistance: senate.office@umich.edu
Ann
Arbor Campus Overview
Architecture
and Urban Planning
Archivist/Curator/Librarian
Art
and Design
Business
Administration
Clinical
Faculty
Dentistry
Education
Engineering
Information
Kinesiology
Law
Literature,
Science and Arts
Medical
School
Music
Natural
Resources and Environment
Nursing
Pharmacy
Public
Health
Public
Policy
Research
Faculty
Social
Work
Librarian's Forum 3rd Annual Salary Report