We recommend that the Legislature direct the California Postsecondary Education Commission (CPEC) to consider an alternative faculty salary methodology because the current one is flawed.
Every year, pursuant to Senate Concurrent Resolution 51 of 1965, the CPEC submits to the Governor and the Legislature an analysis of faculty salaries at the UC and CSU in relation to the higher education institutions that the UC and CSU have agreed to use as a basis for comparing the adequacy of the faculty salaries they provide. The CPEC's analysis is based on a set of procedures and calculations that are collectively referred to as the faculty salary methodology.
Figures 8 and 9 display the faculty salary comparison institutions for UC and CSU, respectively.
The last comprehensive review of the faculty salary methodology occurred almost a decade ago. We believe it time for a new review of the methodology because, in our view, the methodology results in the identification of faculty salary gaps that are too large, particularly at the CSU. This is primarily because the methodology does not adequately account for the significantly higher proportion of full professors at the CSU compared to its 20 comparison institutions. (This issue also has implications for the UC, but to a much lesser extent, because the UC's faculty staffing patterns are more in line with its eight comparison institutions.) Another reason for the overly large gap is that the CSU's comparison list includes major doctoral-granting institutions. Generally, such institutions pay higher faculty salaries than institutions with teaching missions that are more similar to the CSU.
We discuss these issues below.
Under the current methodology, the CSU's faculty salary gap is computed by multiplying the average salary at each rank (such as full professor) at the CSU and its comparison institutions by the average of the staffing patterns at CSU and its comparison institutions. Based on this methodology, the CPEC estimates that CSU faculty salaries lag behind its comparison universities in the current year by approximately 9.6 percent. The CPEC estimates that this lag will increase to 12.6 percent in 1995-96 in the absence of a faculty pay increase.
We believe the faculty salary methodology is flawed because it provides for salary parity even though the CSU's staffing pattern (and, to a much lesser extent, the UC's staffing pattern) is far in excess of parity. Figure 10 displays the faculty staffing patterns at the UC and CSU in relation to their comparison institutions.
As shown in Figure 10, over 64 percent of the CSU's faculty are full professors, while only 38 percent of its comparison institutions' faculty fall in this group. (In addition, CSU's proportion of full professors is far in excess of that of any single comparison institution. The next highest is 47 percent.) Figure 10 also shows that about 59 percent of the UC's faculty are full professors, while 54 percent of its comparison institutions faculty fall in this group.
Generally, the proportion of full professors in a given higher education institution reflects the following:
We are not aware of any particular reason why the faculty age patterns at the CSU (or UC) would vary from the age patterns at its comparison institutions. In the past, the CSU administration has defended its top-heavy distribution on the basis that a more liberal policy toward advancement is needed if CSU is to be competitive in hiring faculty. However, this argument gives CSU the best of both worlds --salary parity and a staffing pattern far in excess of parity.
Clearly, the CSU's comparison institutions have made trade-offs in using the funds available to them. They are able to pay higher salaries by rank (as shown in Figure 11) because they have proportionately fewer faculty at the highest paid rank of full professor. The CSU should be subject to a similar fiscal discipline if the comparison is going to be meaningful.
Our analysis indicates that if the simple average CSU faculty salary were compared to the simple average faculty salary at the comparison institutions, the faculty salary gap of 12.6 percent in 1995-96 (absent faculty salary increases) identified under the current methodology would be reduced to 3 percent, as shown in Figure 11. Similarly, the estimated 1995-96 gap for UC would be reduced from an estimated 10.4 percent to 7.7 percent.
We recommend that the faculty salary methodology be based on simple average comparisons. We note that, while this change would reduce over time the overall faculty salary gap, it would not diminish the systems' ability to reward outstanding faculty with salary increases. This is because the systems have considerable flexibility in awarding salary increases to individual faculty members.
In the past, the faculty salary comparison institutions for the CSU have been chosen to include institutions with similar teaching missions. Specifically, the comparison institutions for the CSU have included those that offer a wide variety of programs at both the undergraduate and Master's degree level, but that grant very few if any doctoral degrees. This is because, under the state's Master Plan for Higher Education, the CSU is authorized to offer doctoral degrees only through joint arrangements with the UC or private universities. Over the last decade, two of the comparison institutions--the University of Southern California and the Virginia Polytechnic Institute and State University--have become two of the nation's top 35 doctoral-granting institutions.
The inclusion of doctoral-granting institutions in the comparison university list for the CSU tends to increase the computed faculty salary gap. This is because such institutions tend to have higher faculty salaries than institutions that are more truly comparable to the CSU.
Recommendation. As a practical matter, the issues we discuss above are not likely to have implications for the 1995-96 budget. This is because, even with our proposed changes, it is likely there will still be some level of faculty salary gap in 1995-96, given the state's fiscal constraints. (In our analysis of the UC and CSU budgets in later sections, we make recommendations for faculty salary increases that would help close the faculty salary gaps we identify.)
When significant policy and fiscal concerns have been raised regarding the faculty salary methodology in the past, the CPEC has convened a technical committee composed of representatives from the UC, CSU, Department of Finance, and Legislative Analyst's Office to advise it on proposed changes. Under such a process, the CPEC would ultimately be responsible for making recommendations to the Legislature and the Governor regarding changes to the methodology. We recommend that the Legislature adopt the following supplemental report language in order to address the concerns we discuss above in time for the 1996-97 legislative budget hearing process:
It is the intent of the Legislature that the California Postsecondary Education Commission convene a technical advisory committee composed of representatives from the University of California, the California State University, the Department of Finance, and the Legislative Analyst's Office to review specific faculty salary methodology issues. These issues shall include (1) revising the methodology to use the simple average faculty salaries at the UC and CSU in comparison to the simple average faculty salaries at their respective comparison institutions, and (2) replacing or eliminating institutions from the CSU's comparison list that grant significant numbers of doctoral degrees.
The CPEC shall, in consultation with the technical advisory committee, make recommendations on these two faculty salary methodology issues and, as appropriate, other related issues to the legislative policy and fiscal committees that consider higher education issues, the Department of Finance, and the Legislative Analyst's Office by December 1, 1995.
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