March 31, 2010
TO: Academic Deans and Department Chairs
FROM: Paul M. DeLuca, Jr., Provost and Vice Chancellor for Academic Affairs
RE: Compression-Equity Fund Initiative: Implementation (Eligibility: full professors 10, 15, 20 or at additional 5-year intervals after promotion to full)
DEADLINE: 26 May 2010, for recommendations by deans to APO (Suggested date, departmental recommendations to Deans: 16 April)
This implementation memo provides guidelines for deans and chairs for the Compression-Equity Fund Initiative. This is one among a portfolio of tools we use to address faculty salary issues, while remaining mindful of our overall fiscal constraints.
This initiative provides funds—if warranted by analysis of equity arising from compression, in tandem with post-tenure review of performance—for a salary adjustment ten (10), fifteen (15), twenty (20) years, and additional 5-year intervals after promotion to full professor. Costs of the 101-fund share of the salary adjustment are equally borne by central campus and schools/colleges, up to a limit of a 10% (up to 5% from central campus) base adjustment.
This initiative supplements but does not replace the long established policy on equity review of faculty salaries at key junctures of the career cycle, based on evaluation of comparable peers including analysis of whether salary differences are justified.
For clarity, we distinguish below between standard equity analysis (the pre-existing policy, which still continues), and compression-equity analysis (the supplementary initiative, which begins in 2010). We will issue the annual memo on standard equity review concurrently with release of this memo.
Please note that we are working with a presumption that the Compression-Equity Fund Initiative will sunset after five years (after 2013–14, for base adjustments slated to begin on or after 1 July 2014). At the conclusion of five years, we will evaluate our faculty pay strategies, to see whether we have reached the “sweet zone” of competitiveness with peer medians, and to review fiscal soundness.
Key elements to guide implementation by departments and deans follow. Please note that central campus (APO) will send deans lists of eligible professors, and will also note if they have already received a market adjustment within the last five years
1. Eligibility for consideration.
(a) Tenured faculty ten, fifteen, twenty years or subsequent five-year intervals after promotion to full professor rank are eligible for consideration. For example, faculty promoted to full professor in 1985, 1990, 1995, or 2000 (i.e., recommended for promotion in AY 1984–85, 1989–90, 1994–95, or 1999–2000, respectively) should be considered in 2009–10 for possible adjustments to take effect on or after 1 July 2010 (i.e., 1 July for faculty paid on 12-month appointments, or beginning of Semester I for faculty paid on 9-month appointments).
(b) Professors who already received a market-based adjustment (and/or high-demand adjustment) or an equity adjustment on or after1 July 2005 are normally not eligible.
(c) Full professors appointed to UW–Madison at the full professor rank in 1985, 1990, 1995, or 2000 (or at 5-year intervals before 1985, e.g., 1980) are eligible for consideration in 2009–10.
Central campus (APO) will assist deans and departments by sending a list of faculty promoted to full professor in the relevant years (e.g., 1980, 1985, 1990, 1995, 2000), and will specify if they already received a market adjustment (and/or high-demand adjustment) or equity adjustment within the last five years. Central campus will also send a list of faculty appointed to UW–Madison at full professor rank in the relevant years.2. Relationship to post-tenure review.
(a) Base adjustments under this initiative do not constitute across-the-board entitlements. After determining which full professors are eligible for consideration, the first step is to evaluate performance in the domains of scholarship, teaching, and service (including such relevant factors as synergies between these domains, and campus impact beyond the tenure home unit), through the post-tenure review process. Departments should evaluate whether the full professor exceeded, met, or did not meet expectations of performance during the last five years, based on departmental criteria (per Faculty Legislation II-106).
(b) Departments should set the evaluation of the last five years within the wider context of cumulative career performance. If relevant, explain discrepancies between cumulative career performance and five-year performance. For example, the professor may have met or exceeded expectations of cumulative career performance, but recently undertook a new scholarly direction or experiment that has not yet borne fruit.
(c) Consideration of full professors for a possible adjustment through the compression-equity initiative re-sets the post-tenure review clock for future reviews. Professors considered in AY 2009–10 would not undergo post-tenure review until AY 2010–15.
3. Standard equity analysis.
After conducting the post-tenure review, the second step is analysis of possible standard equity concerns under the pre-existing policy, through evaluation of comparable peers including analysis of whether salary differences are justified. Standard equity reviews take place at key junctures of the professor’s career cycle, or whenever a professor asks for an equity review. Departments and deans will be asked, as part of the compression-equity analysis under step 4 below, to indicate whether a base adjustment was justified by standard equity review.
Note that standard equity review focuses on analysis of salaries, performance, and market among faculty at comparable stages of the career cycle. They do not focus on compression as such, and do not qualify for central campus cost-sharing.
The Provost’s annual memorandum on standard equity review will be released concurrently with release of this memo.
4. Compression-equity analysis.
After review of standard equity, the third step is analysis of possible equity concerns arising from compression. We realize that base adjustments recommended under this program, while significant, may fall short of adjustments one might wish to consider if we lived in a world of more abundant resources.
Note that the initial calculation below of whether there is a prima facie case for compressionequity concern does not entitle the faculty member to a specific salary figure or compressionequity adjustment. It serves to denote whether there is a prima facie case for further consideration, which will need to take into account other legitimate factors, among them quality of five-year performance, quality of cumulative career performance, submarket niches of high demand, impact on departmental equity including gender equity, and impacts on resource allocation.
Here are the key steps of equity-compression analysis.
• Establish an unadjusted compression baseline by calculating the highest salary among the following:
(a) faculty in the department who currently hold a lower rank (associate professor or assistant professor);
(b) faculty in the department who are newly promoted full professors (promoted to full professor on or after 1 July 2009), or faculty newly appointed to UW–Madison at the full professor rank whose immediately preceding academic appointment had been at the associate rank.
• If the methodology above is problematic—for example, there are no professors at lower rank and no newly promoted or appointed full professors—departments should consult with the school/college dean for instructions on an alternative reasonable methodology to establish an unadjusted compression baseline. Note that central campus will ask deans to justify explicitly the logic of any alternative methodology, and that approval is not automatic.
• Multiply the unadjusted compression baseline mean by the following: 1.10 for professors 10 years in rank at full; 1.16 for professors 15 years in rank; and 1.22 for professors 20 or more years in rank. The new figure is the adjusted compression baseline. For example, a professor promoted to full professor in 1995 has served 15 years in rank; if the unadjusted highest salary at lesser rank is $90,000, the adjusted baseline is $104,400 (i.e., 90,000 x 1.16).
• Establish whether there is a prima facie case for compression-equity concern, Calculate the higher of the following two figures: (a) the salary rate of the full professor under consideration; (b) if applicable, because the full professor is also being recommended for a standard-equity base adjustment under step 3 above, the salary rate upon approval of the standard-equity adjustment. If the higher figure is less than the adjusted compression baseline, there is a prima facie case for concern. (Recall that as noted above, a prima facie case for consideration does not by itself suffice to justify a base adjustment or a specific target salary.)
• Analyze whether performance or market considerations corroborate or modify the prima facie concern. For example, a finding that the professor has not met or exceeded performance expectations (per the analysis in step 2 above) may modify or eliminate the concern. For example, submarket distinction between highdemand and low-demand niches within a larger field, or an individual star reputation so powerful that a professor of lesser rank has become a “market-ofone,” may modify or eliminate the concern.
5. Additional factors to consider.
Before concluding whether a base adjustment is warranted and in what amount, consider the following factors.
(a) Address the possible impact of the recommended salary rate on gender equity or other
equity concerns within the unit.
(b) Consider the parameters of resource allocation for this initiative.
• Central campus and colleges/schools will share equally the cost of a salary rate increase up to 10% (i.e., up to 5% from central campus). Costs beyond 10% are fully borne at the college/school/department level. If departments wish to recommend an increase beyond 10% in specific cases, they are strongly advised to discuss suitability and feasibility – including payment of costs – with their academic deans or associate deans.
• The minimum base adjustment to qualify for a central campus contribution is 5% (i.e., 2.5% from central campus).
•When funding splits between 101- and non-101 funds underwrite a faculty salary, the portion of the base adjustment borne equally between central campus and deans refers to the 101-share of the salary. In the case of cluster hires, the recommended base adjustment is handled as a 101-share of salary.
(c) The usual campus shared governance and reporting processes apply, in recommendations by departments to deans, and by deans to Academic Personnel Office. Departments should follow their normal procedures, consult appropriately with other units in cases of shared appointments, and consult appropriately with academic deans as they formulate base adjustment recommendations. Dean approval is required before a base adjustment recommendation is considered at the central campus level. For recommended adjustments, APO will need a brief summary report from deans on the results of the performance review, on the presence of market concern and its urgency in light of performance; and if applicable, on the expected distribution between 101- and non-101 share of the base adjustments. See point 6 below.
6. Base adjustment recommendations: calendar and process.
Due date for deans to Academic Personnel Office: 26 May 2010.
Due date for departments to deans: to be set by deans (suggested date: 16 April).
(a) If a base adjustment is justified by analysis of compression-equity in tandem with performance review and standard equity review (steps 2-3-4 above), while taking into account additional equity and resource allocation factors (step 5), departments should indicate the target salary rate, and the base adjustment recommendation. Note the 101-fund share of the base adjustment, and the dollar cost division between the central campus level, and the school/ college/department level.
(b) Deans should briefly summarize their recommendations and rationale on the Compression-Equity form, to be sent by deans to Academic Personnel Office no later than Wednesday, 26 May.
(c) Once the recommendations are received at APO, central campus will review them and confirm or modify the requests and the central campus contribution to base adjustments. The process will take about a month.
Chairs who have questions should consult their academic deans or associate deans. Deans who cannot answer questions should confer with Vice Provost Steve Stern, at 262- 5246, or firstname.lastname@example.org. Questions about deadlines and delivery of data to APO may be directed to Catharine DeRubeis, 262-7102, or email@example.com.