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October 12, 2000


University Senate Matters

Nathan Hershey

The topic today is compensation, more specifically salary levels and salary increase policy. There were at least two prompts for this: one was a discussion at the Sept. 12 University Senate Council meeting; the other was a conversation I had with a faculty member in July.

At the Senate Council meeting, Professor Phil Wion and the chancellor disagreed about interpretation of University salary increase policy. Yearly salary increases take into consideration four elements: maintenance of real salary, market adjustments, equity adjustments and individual merit. The difference between their interpretations of the policy was on whether maintenance of real salary is primary among the four elements. If it is, all employees performing satisfactorily are entitled to receive increases that match the increase in the Consumer Price Index (CPI) during the preceding year, absent unusual circumstances, before funds are assigned from the salary increase pool to the other elements.

The chancellor's view is that salary maintenance is just one of four elements, and he may determine how the funds in the salary increase pool will be allocated among those elements.

It occurred to me that a policy on yearly salary increases must take into account the effect on the recipients of an increase below the CPI, when their performance has been rated as satisfactory. Individuals who believe their real salary has been diminished by an increase below the CPI, even though performance has been rated satisfactory, will be disappointed and disaffected, particularly if failure to meet the CPI occurs with some frequency. Some may respond by lessening their commitment to their jobs and the University in ways that may adversely affect University objectives. Back in the late 1970s and early 1980s, when inflation was quite high, the University's position was that, because of the high rate of inflation (in 1980 the CPI rose 13.5 percent), it was not possible to maintain real salary. I find it somewhat inconsistent for the University now, given the positive reports about fundraising, and a CPI of only 2.7 percent, to decline to match the CPI in awarding salary increases to employees who performed satisfactorily. If the CPI is not matched when the CPI is high, why is it not matched when it is at one of the lowest levels in history, absent a depression? Matching the CPI in awarding salary increases for satisfactory performance has important symbolism for faculty and staff; it can be taken to mean that the University does not want its employees who perform satisfactorily to regress financially.

The conversation with the faculty member in July turned at some point to the subject of faculty donating to the University, sparked in part by an update from the chancellor indicating the success of fundraising during the past year and the hopes for the future. The faculty member I was speaking with said he did not make contributions to the University because he feels he is making a contribution by accepting a lower salary than he could obtain at a research institute or some other organization.

This raised in my mind the issue of whether the University has clear goals for University faculty salaries. From what I can tell, the goal is to have average faculty salaries at the median level for AAU institutions or, more likely, at the median level for AAU public institutions. Some document should clearly state the goal, if one indeed exists. Faculty salaries at Pitt do not reach either level now, except for a small number of faculty in a few disciplines and schools. Some long-time faculty are told by their chairpersons that they are seriously underpaid, but that the amount of money available for equity adjustments is too small to make up substantially for lengthy prior periods of inadequate salary increases. While it is heartwarming to have confirmation of one's worth, it is transitory. Salary increases are not transitory; an increase one year raises the base on which percentage increases are awarded in subsequent years.

Should the difference between faculty compensation and what faculty compensation would be if the "median goal" were met be viewed as an in-kind faculty contribution to Pitt? I doubt that the University management has ever given thought to this notion. When the average faculty salary is below the target for a faculty rank, one could reasonably conclude that, collectively, the faculty at that rank has made an in-kind contribution.

While there is evidence that many factors, apart from compensation, are relevant to employee job satisfaction, the importance of compensation cannot be denied. Apart from the psychological effect of salary increases below the CPI on a regular basis for satisfactory performance, financial hardship for some faculty members brought about by such salary increases might induce some faculty members to seek opportunities for compensation to increase their incomes. The choices made to garner additional income may come at the expense of their commitment to the University, particularly to students.

A while back I attended the dinner celebrating the 50 years of teaching by School of Law Emeritus Dean W. Edward Sell. For me, the most important statement in his remarks was that in his 50 years of teaching he never missed or canceled a class in the interest of personal pecuniary benefit. How many faculty can make such a statement about their commitment and priorities? University salary policy should have as one of its goals inspiring commitment like that of Dean Sell. The symbolic value of real salary maintenance should not be overlooked in this context.

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