Bonuses, both for performance and longevity, have become commonplace for higher-ed administrators at both public and private institutions. Indeed, these bonuses have become so commonplace that they now generally go unnoticed and unquestioned. But when such bonuses continue to be given during periods of great budget constraints, while faculty and staff compensation and/or positions are being cut in order to balance the budget, they sometimes do, at least briefly, attract controversy, especially when presidents attempt to justify the obvious inconsistency in their messaging.
This sort of controversy erupted a half-decade ago at the University of Toledo, when in response to state funding cuts that were a consequence of the Great Recession, President Lloyd Jacobs announced that mandatory faculty and staff furlough days would be instituted, that more (largely lower-paid) staff positions would need to be eliminated and the outsourcing of basic services to private contractors continued, and that some faculty, including some tenured faculty, would also need to be permanently furloughed, all in the name of keeping the university financially solvent. As the cliché goes, desperate times sometimes call for desperate measures.
But, at the University of Toledo, the desperation was not quite shared by everyone. Not only was Lloyd Jacobs then the third most highly paid public university president in Ohio, but he was also proposing to pay his fourteen top administrative subordinates more than $650,000 in bonuses—at the very time that he was proclaiming the dire implications of the university’s revenue shortfalls. And, for a good while, he did not seem to recognize why those two messages, delivered almost simultaneously, seemed incongruous to just about everyone else.
This sort of thing is, of course, a further sign of the corporatization of our institutions. In the corporate world, when sales and profits decline even modestly, the most common response is that the corporation needs to become “leaner”: that is, the production workforce needs to be cut while productivity is increased. Then the upper management who have to deal with this often largely self-created mess feel that they deserve much higher compensation for doing so. So, one often witnesses the oxymoronic circumstance in which management compensation continues to increase dramatically as corporations approach insolvency. Even worse, arguments are then often made in bankruptcy court that the bloated compensation of the upper-management should be maintained in order to insure that the corporation is dissolved as cost-effectively as possible.
So Lloyd Jacobs was, in effect, simply doing and saying what any “good” corporate executive does and says.
But one knows that a fiscal issue is really getting traction when it attracts attention other than in a time of deep crisis.
This past April, faculty at the University of Michigan sent a 40-page letter to the university’s president in which they highlighted their growing concerns about administrative compensation. More specifically, faculty questioned the now commonplace practice of paying large portions of administrative salaries not as base salaries but as bonuses. Since the faculty expressing the concern had considerable difficulty tracking such bonuses across the institution, it is clear that some lack of transparency about administrative compensation is one of the reasons for and advantages of this sort of compensation model.
An article published on the MLive website included the following illustrations of what has been occurring at the University of Michigan: “For example, Rowan A. Miranda, an associate vice president for finance, earned a base salary of $330,000 in 2012, and that year also received $130,000 in additional compensation; vice president of government relations Cynthia Wilbanks received $58,007 in supplement compensation in 2013, in addition to her salary of $296,324; and chief information officer Laura Patterson earned a base salary of $279,545 in 2010, and that year also earned $70,585 in additional compensation, according to data obtained by the faculty members.”
Of course, whatever has been occurring at the University of Michigan has certainly been occurring elsewhere. Indeed, Ohio State under Gordon Gee has become the standard illustration of unchecked administrative excess. So, without necessarily questioning any of the specific bonuses at the University of Michigan that are cited in the article as illustrative, I think that it is very obvious that the standards by which administrative performance bonuses are determined do not generally have anything close to the clarity of the standards by which faculty performance is judged, whether for annual evaluation or for promotion. Moreover, “longevity” bonuses are generally for administrators who remain in their positions for three to five years. So a tenure-track faculty member’s probationary period has, in effect, become the measure for an administrator’s “extended” commitment to an institution.
So what would happen if administrative positions were created and administrative compensation was determined, instead, by the same model as that applied to faculty? Well, consider the following statement on new faculty hiring issued by Lloyd Jacobs at about the same time as he was calling for faculty furloughs and administrative bonuses:
“In our continuing quest for higher quality at lower cost, we must scrutinize new hires more carefully in every part of the organization. I wish to address certain aspects of the decision to hire faculty to the Tenure/Tenure Track (3T) ranks. These requirements apply to every 3T hire, every college.
“The history of the position is unimportant. It makes no difference if a vacancy was created by retirement, early retirement, resignation, or death. It makes no difference if the vacant position is of long standing or if a new position is proposed. Every hire to the 3T must be justified as follows.
“A detailed analysis of teaching workload will be required. Workloads for a predecessor should be evaluated by analysis of ARPA’s and other data. The credit hours produced by the entire department, division, or unit must be presented. Externally funded research dollars must be tallied and presented. Fundamentally, hiring must be justified by workload. Workload statistics must be verified by our internal auditor.
“It will be necessary to justify why the work cannot be performed by a lecturer or an adjunct faculty member. The most common justification, I expect, will relate to a research component to the job description. In that regard, new faculty bringing pre-existing external funding will be advantaged.
“In general, a research justification for hiring will require that the research proposed relates to one of our approved Centers of Excellence, or one of our approved interdisciplinary schools. Practically, no hiring will be approved without at least 50% of a faculty members’ time being spent in an interdisciplinary school.
“One of our fundamental institutional values is ‘diversity.’ Every effort will be made to hire underrepresented minority faculty.
“Every proposal to hire will require a written Mini Business Plan (MBP). What will the faculty member do, what will be the cost, what will be the revenue generated? How will contributions to the mission be measured? Every MBP will require my signature. Every letter of offer must be patterned upon the elements of this MBP.
“Faculty are our most important investment vehicle. We don’t primarily invest in stocks, derivatives, or real estate; we invest in faculty. We must continue that investment. Faculty hiring is not “frozen.” However, in these lean times we must invest carefully, consciously, and with adequate due diligence. That is the purpose of my asking for this approach. Keep recruiting. Continuing seeking out great investments. Find and encourage and hire innovators. Do not allow paralysis to set in!”
Imagine if anything close to the same sort of criteria were applied to administrative hiring and evaluation.
Imagine the administrative response if faculty proposed such criteria for administrative hiring and evaluation.
Or, imagine that faculty asked to be evaluated by the same “standards” and to receive compensation proportionate to that received by administrators. We would be accused, of course, of wanting to bankrupt our institutions.
Which is precisely what administrative bloat is doing.
Unfortunately, however, the growing caste system in high education is not just a matter of numbers of positions and compensation—though the shift from instruction to administration in both cases has been quite extraordinary and unrelenting, through economic good times and bad. It is also a matter of conditioned cultural expectations and messaging.
And the corporate messaging that has gained a lot of traction over the last four decades includes the following core premises:
–Managers rise on their merits and are worth every cent that they receive.
–Workers must always be held to account, and if their compensation is reduced or their positions are eliminated, it is an indication that their productivity was insufficient—if not individually, then collectively.
–Unions reduce productivity by reducing individual accountability, and, therefore, unions hurt workers.
But the problem that university administrators have in adopting this messaging is that universities are not corporations and do not have stockholders. So administrators cannot point to something as simple as a stock price as an indicator that the “value” that they are creating for others is somehow proportionate to the compensation that they themselves are receiving.
Moreover, if the public is skeptical about the compensation that professors receive, they also have a harder time accepting bloated compensation of university administrators, who are still generally viewed—and still often characterize themselves–more as “public servants” than as “corporate executives.”
So, internally, we can perhaps force the issue to be addressed by threatening to go public with the data that exposes its scope and its most extreme illustrations.
But, if that approach doesn’t force enough of a shift in institutional priorities, we need to consider very carefully our messaging to the public. Presenting data in itself won’t work because the general public is simply overwhelmed by numbers and unable to make meaningful distinctions between something as straightforward as millions and billions of dollars (thus, assertions about the millions in “wasteful” spending on PBS and the NEA can be juxtaposed with equally strong assertions about the billions in “necessary” spending on individual weapons systems).
So, I would like to suggest the following as a starting point: we should highlight the accomplishments of “high-profile” faculty members at our institutions and then show the relatively (or very) modest impact that those accomplishments have had on their compensation; then we should offer, as a point of comparison, the compensation, including bonuses, of largely anonymous administrators whose “accomplishments” will be next to impossible to describe to a general audience. This sort of messaging will do two things at once: it will undercut the notion that faculty are over-paid while simultaneously undercutting the notion that administrators are simply being paid what “the market demands.”