Methods for Benchmarking Faculty Salaries: A Market Equity Perspective

1
Methods for Benchmarking Faculty Salaries A
Market Equity Perspective

• Robert Armacost,
• Director, University Analysis Planning Support
• Alicia Wilson
• Assistant Director, University Analysis
  Planning Support
• FAIR 2004 Conference, Melbourne
• June 24, 2004

2
Overview

• equity and benchmarking
• methodology
• national data sources
• comparison groups
• measures, criteria, and targets
• cost-of-living
• comparisons
• use of results
• hints

3
The University of Central Florida
From Promise to Prominence Celebrating 40 Years

• established in 1963 in Orlando Florida (first
  classes in 1968), Metropolitan Research
  University
• grown from 1,948 to 41,700 students in 35 years
• 34,400 undergraduates and 7,300 graduates
• 12 instructional sites in regional campus system
• doctoral intensive
• 84 Bachelors, 64 Masters, 3 Specialist, and 23
  PhD programs
• second largest undergraduate enrollment in state
• projected largest undergraduate enrollment in
  2005
• approximately 1,100 faculty and 3,100 staff
• eight colleges
• Arts and Sciences, Business Administration,
  Education, Engineering and Computer Science,
  Health and Public Affairs, Honors, Optics and
  Photonics, and Hospitality Management

4
Equity Concept

• equity addresses an ideal state of being
  impartial, fair, or just. The immediate question
  is whether data suggest that a given factor
  alone is associated with salary levels that are
  partial, unfair, or unjust.
• inequality suggests not the same in any
  measurable aspect. Lack of equality, as of
  opportunity, treatment, or status.
• salary study can only identify inequalities.
  Where they exist, further analysis is required to
  assess equity.

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Equity Considerations

• internal equity
• genderAre women and men employees being paid
  comparably for similar work?
• ethnicityAre minority employees being paid
  comparably to other employees for similar work?
• external equity
• marketAre employees being paid comparably to
  employees at other institutions?

6
What is Benchmarking?

• benchmark n. 1. A standard by which something can
  be measured or judged. 2. Often bench mark. A
  surveyors mark made on a stationary object of
  previously determined position and elevation and
  used as a reference point in tidal observations
  and surveys. --benchmark tr.v. To measure (a
  rivals product) according to specified standards
  in order to compare it with and improve ones own
  product. (American Heritage Dictionary, 1996)

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Benchmarking Questions

• what do I measure (benchmark)?
• who do I compare to?
• what process should I use?
• where do I get data?
• answer it depends on what you want to accomplish

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Market Equity

• are employees being paid comparably to employees
  at other institutions?
• need to know
• what are employees paid?
• what do I want to compare? (e.g., salaries,
  benefits, other compensation)
• who do I compare to? (benchmark)
• considerations
• time frame
• why am I making the comparison? (purpose)

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Purpose of Market Salary Comparisons

• identify resource needs to achieve comparability
• identify areas that need additional salary
  resources
• identify individuals who need additional salary
  resources
• prepare for contract negotiations
• respond to union concerns

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Objective of Market Salary Comparisons

• identify expected salary costs in specified
  disciplines
• determine relative standing of overall
  compensation
• determine relative standing of compensation by
  rank/position
• determine relative standing of compensation by
  discipline/specialization
• determine areas for salary increases to meet some
  standard
• identify individuals for salary increases to meet
  some standard

11
Faculty Salary Market Equity at UCF

• originally planned as next step from the internal
  gender and ethnicity equity analyses
• devolution of collective bargaining pushed down
  to individual institutions
• market equity analysis needed immediately

12
Market Equity Considerations

• unit of analysisrank by discipline is preferred
• data sources
• comparison groups
• measures for salary comparisons
• criteria for determining inequity

13
Unit of Analysis

• affected by rank distribution and discipline mix
• Institution A dominates on all ranks, but is
  dominated by institution B overall
• overall average, rank average, and discipline
  average are misleading

14
National Data Sources

• College and University Professional Association
  for Human Resources (CUPA-HR)
• Oklahoma State UniversityFaculty Salary Survey
  by Discipline
• American Association of University Professors
  (AAUP)

15
National Data SourcesCUPA-HR

• Institutional Research reports data to CUPA-HR
• salaries do not include non-salary compensation
  or stipends
• average and median salaries by rank and
  discipline
• full-time faculty faculty on annual contracts
  of at least 9 months, whose teaching/research
  represents more than half of their duties
• Professors
• Associate Professors
• Assistant Professors
• New Assistant Professors
• Instructors
• Data-On-Demand
• online subscription of data
• allows creation of custom comparison groups
• individual institutional data not available
• does not reflect differences for cost of living

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CUPA-HR Data On Demand
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CUPA-HR Data On Demand
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CUPA-HR Data On Demand
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National Data SourcesOSU

• average salaries by rank and discipline
• 9-10 month faculty salaries no explicit
  definition of faculty, believed to be consistent
  with CUPA-HR definition
• Professors
• Associate Professors
• Assistant Professors
• New Assistant Professors
• Instructors
• select doctoral degree-granting institutions
  asked to participate
• in Florida only UF, FSU, and FAU
• UCF does not participate used UCFs CUPA-HR data
  for comparison purposes
• flat fileno ability for custom comparison groups
• individual institutional data not available
• does not reflect differences for cost of living

20
National Data SourcesAAUP

• provides aggregate data by discipline
• provides individual institutional salaries
  aggregated by rank
• contains all of the state universities
• widely used for public consumption (e.g.,
  Chronicle, US News)
• no rank by discipline comparisons
• misleadingaffected by rank distribution and
  discipline differences

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Comparison Groups

• how to select comparison groups?
• peer groups
• Carnegie classification
• location
• national
• are you trying to see where you currently stand?
  compared to?
• is this for collective bargaining negotiations?
• what are the institutions goals?
• do you want a group that matches the
  institutions mission?

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UCF Comparison Groups

• CUPA-HR
• Doctoral/Research Public Universities (93)
• Doctoral/Research Public Universities With
  Collective Bargaining (30)
• Doctoral/Research Public Universities Without
  Collective Bargaining (58)
• Florida College and Universities (19)
• Florida Subset (8)
• Metropolitan Research University Peers (18)
• Presidential Salary Peer Universities (14)
• OSU
• All Participating Universities (94)
• Research I (48)
• Research II (25)
• Other Carnegie Classes (21)
• AAUP (aggregated)
• Public
• Private
• Number in parentheses indicate the number of
  participating universities.

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Measures

• averages
• sources available (CUPA-HR, OSU, AAUP)
• more easily understood
• medians
• sources available (CUPA-HR)
• less influenced by outliers, becomes more of an
  issue when looking at small groups
• percentiles
• sources available (CUPA-HR)
• weighted or unweighted
• weighted is calculated on all reported
  individuals
• unweighted is calculated on institutional
  averages (recommended by CUPA-HR)

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Criteria

• individuals vs. group averages
• individual-bring an individual to the target of a
  comparison group
• have x of individuals at target level
• group-bring a discipline to the target of a
  comparison group. In this case all individuals
  may not meet the target.
• average of the rank/discipline to be x of target
• overall
• how many disciplines (or ranks within
  disciplines) have an average salary at or above a
  median or average target of a comparison group?

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Targets

• all discipline/rank groups or individuals must
  meet a minimum level (50, 60, 75, 80, etc.)
• x of groups or individuals must be at some
  average (90, 110, etc.)
• certain groups (strategic areas) may have a
  higher target than the rest of the university

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Cost of Living

• different calculators provide different results
• timing
• definitions of an area
• breaking down urban area from its suburbs
• indexes included (Housing, Uitlities, Health,
  etc)
• taxes (Downden Co takes some into account)
• how to weight cost of living when using
  aggregated results
• available areas (not all cities/MSAs available in
  all calculators)
• cost (free vs. purchase)

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Cost of Living

• sources
• http//houseandhome.msn.com/PickAPlace/CompareCiti
  es.aspx () (Sperlings)
• http//www.bankrate.com/goocalb/movecalc.asp?navm
  ovingpagecalc_home () (Dowden Co)
• http//www.homefair.com/homefair/servlet/ActionSer
  vlet?pid500homefairtoActionServlet3Fdg3Dns2
  6pid3D19926cid3Dhomefairpagename27internalT
  partnerhomefair () (Center for Mobility
  Resources)
• www.bestplaces.net(uses (Sperlings)
• www.bls.gov/cpi (Bureau of Labor Statistics)
• www.costofliving.org (ACCRA)

used in example above
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ComparisonMedians vs. Averages

• distribution tables with counts of the number of
  times that average salaries (rank/discipline
  group) as a percentage of the comparison groups
  median/average falls within a range

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ComparisonIndividuals vs. Group Average
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Sample Excel Spreadsheet

• institutions average salary (rank/discipline) as
  a percentage of the comparison groups average
  salary (lt80 highlighted)

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Results - Bottom Line

• depends on
• the comparison group chosen
• the appropriate criterion chosen (lt80, lt100)
• whether looking at individuals or groups

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Potential Use of Results

• inform Provost of current standings and what
  discipline/rank groups are performing below
  targets
• calculate the market equity portion of the
  collective bargaining proposal
• identify individuals below market threshold salary

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Helpful Hints

• pay attention to own data
• use faculty CIP code required for comparison
• insist on rank by discipline basis for
  comparisons
• choose comparison group carefully
• use multiple displays of results

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Questions
Questions
???
Ms. Alicia L. Wilson Assistant Director,
University Analysis and Planning Support
University of Central Florida 12424 Research
Parkway, Suite 215 Orlando, FL 32826-3207 407-882-
0287 awilson_at_mail.ucf.edu http//uaps.ucf.edu

• Contacts
• Dr. Robert L. Armacost
• Director, University Analysis and Planning
  Support
• University of Central Florida
• 12424 Research Parkway, Suite 215
• Orlando, FL 32826-3207
• 407-882-0286
• armacost_at_mail.ucf.edu
• http//uaps.ucf.edu