II. Basic Principles of Compensation for Instructional Faculty at the University of Oregon. Substantial progress was made in implementing the seven Basic Principles.

III. White Paper Implementation Guidelines For 2001. Administration and academic units continue to make progress with respect to the Implementation Guidelines, which were based on the values set forth in the Principles document approved by the University Senate in March 2002 ².

IV. Salary Improvements in 2002-2003. The budget situation of the State and therefore of the University is uncertain at present, but clearly is not very favorable. The SBC and Administration recommend an average salary improvement of 3.0% for all instructional and administrative faculty starting on January 1, 2003. However, given current budget uncertainties, it is possible that there might be a smaller or even no salary increase next January.

YEAR 2 (2001-2002) REPORT OF THE SENATE BUDGET COMMITTEE

ON SALARY AUGMENTATION PLAN

08 MAY 2002

This is the second annual report on progress toward the goals of the salary augmentation plan, developed by the University of Oregon Senate Budget Committee in collaboration with the University Administration, and adopted by the University Senate in March 2000. The plan consists of three documents: University Senate Budget Committee White Paper: A Plan for Sustained Competitive Parity in Instructional Faculty Compensation¹, Basic Principles of Compensation for Instructional Faculty at the University of Oregon², and the White Paper Implementation Guidelines For 2000³. The first annual report⁴ was presented to the University Senate in May, 2001 and an interim report⁵ was presented in October, 2001.

I. University Senate Budget Committee White Paper: A Plan for Sustained Competitive Parity in Instructional Faculty Compensation 15 March 2000

The White Paper highlighted that in 1998-1999, University of Oregon average faculty compensation was at 82.1% of the mean of our group of peer comparators. The University adopted as a long-range goal to achieve sustained competitive parity by bringing average instructional faculty compensation (salary + benefits) to 95% of parity relative to our comparator institutions. This increase was to be over and above cost of living allowances. The funds supporting this increase were to be devoted to significantly improving the compensation of the vast majority of faculty, with an emphasis on rectifying the problem of salary compression.

To accomplish this goal, the aim has been for the University to increase average faculty compensation a minimum of 2.5% per year over and above the performance of our comparators until we achieve the 95% goal. We estimated in the White Paper that it would take 5-7 years to reach 95% parity. In the following sections, we assess progress toward reaching our goals, using data from U of O, the American Association of Universities (AAU), and 8 peer universities that share our educational mission and which have been adopted as our comparators by the Oregon University System: U. California at Santa Barbara, U. Colorado at Boulder, U. Indiana at Bloomington, U. Iowa, U. Michigan, U. North Carolina at Chapel Hill, U. Virginia, and U. Washington.

Progress toward parity. In the second year of the plan (2001-2002), average salaries of continuing faculty (i.e., excluding those who retired and those newly hired) increased 6.56%; in the previous year they had increased 6.75 %. At the end of the second year of the plan (2001-2002), U of O total compensation (salary + benefits) was 87.8% of our comparators when a weighted average of assistant, associate, and full professors⁶ was compared with a similar average of our comparators. In 2000-2001, the total compensation figure was 87.5%; in 1999-2000, it was 85.0%, and in 1998-1999 it was 82.5%. Thus, we have made progress -- a cumulative gain on our comparators of 5.3% in three years -- in reaching the goal of 95% parity. However, progress was much less (only 0.3%) this year than in the previous two years (2.5% each year).

Salary compression. The definition of salary compression used by the SBC in the White Paper is the erosion of compensation as a factor distinguishing faculty ranks. Average salaries at U of O are less competitive than our comparators as people rise through the academic ranks. In 2001-2002, the gain on our comparators by rank was 1.6%, -0.8%, and -1.0% for full professors, associate professors, and assistant professors, respectively. The situation for instructors is considered separately below. Among the other ranks, it appears from these data that the problem of compression improved in the last year, i.e., full professor salaries rose faster than those of associate and assistant professors relative to our comparators. This improvement in the salary compression situation followed two years in which it worsened. Unfortunately, as the figures above show, the improvement this year is due largely to a decline in the relative situation of associate and assistant professors relative to comparators. The three-year cumulative figures (5.7% gain for full professors relative to comparators, 4.4% for associate, and 5.6% for assistant) still shows a worsening of the compression issue over three years, though as noted, the differences between ranks have narrowed in the most recent year.

The compression issue has been of great concern to the Senate Budget Committee, and we have sought to gain a better understanding and to encourage a focused effort at redress. In the Fall, 2001 report to the Senate we proposed that salary increases for the year beginning January 1, 2001 be divided among full, associate and assistant professors on a differential basis of approximately 5/4/3% in those units where compression is an issue. This was achieved to some extent: salary increases were 6.8% for full professors, 6.4% for associate professors, and 6.5% for assistant professors. This is part of the reason for the improvement of the compression situation in the current year.

It should be remembered that our comparisons are based on total compensation, i.e. salary + benefits. Since benefits (health insurance, pension, etc.) are a complicated matter, and vary from institution to institution, we believe there will be an unavoidable uncertainty in our ability to gauge the real situation regarding the compression issue from year to year, as evaluated in terms of total compensation.

Nonetheless, we are certain that the disparities in ranks relative to our comparators (85.1% parity for full professors, 88.1% for associates, 92.7% for assistants) signal a real issue which is of importance to the long-term health and prospects of the University. We recommend that the University continue its focus on redress of the compression issue in future years, and that the Senate Budget Committee continue to monitor the situation using the best yardsticks at its disposal. We believe the data we have presented are the best yardstick currently available.

Instructors (Tenure-Related And Non-Tenure-Track). Nearly all academic institutions report salary and total compensation figures for instructors but the definition of instructor used to compute these figures varies enormously between institutions. The University of Oregon at present has 10 tenure-related and 260 non-tenure-track instructors (includes instructors and senior instructors). The average salary increase of full-time instructors in 2001-2002 was 5.0%. Accurate salary and compensation data to address salary comparisons for tenure-related and non-tenure-track instructors are currently not available. The University Senate President will be referring referred this issue to the Senate Committee on Non-Tenure-Track Instructional Faculty and asks that Committee to obtain meaningful data on this subject in 2002-03 with guidance and assistance from the Senate Budget Committee.

II. Basic Principles of Compensation for Instructional Faculty at the University of Oregon

The Senate and administration also endorsed two additional documents: Basic Principles of Compensation for Instructional Faculty at the University of Oregon (Basic Principles) and the White Paper Implementation Guidelines For 2000 (Implementation Guidelines).

We believe we have made progress in implementing the seven Basic Principles. First, however, we must recognize that progress toward the overall goal of achieving 95% compensation parity has been disappointing in the latest year: as noted already, after gaining 2.5% on our comparators in each of the past two years, the gain this year was only 0.3%. The reasons for this are (1) the impact of the worsening budget situation of the State on the University and (2) better salary performance by our comparators than we had anticipated in this period of national recession.

In other respects, we have been more successful. As their second aim the White Paper and Principles documents set forth the goal that the vast majority of instructional faculty should receive salary increases. In 2001-2002, all but one tenured and tenure-track faculty received salary increases. Third, as directed by the Principles document, each unit has continued to make progress toward the promulgation of systematic principles and procedures and, to various degrees, shared them with the faculty. The Vice President for Academic Affairs provided evidence that the Deans had taken this charge seriously. We encourage department and unit heads to attempt to fully achieve this goal in the forthcoming year. Fourth, salary adjustments did include a cost of living component of 2.0% Fifth, salary increases did not come at the expense of the academic infrastructure (i.e., academic programs and units); however it must be noted that in the current difficult budget climate, the decision to increase salaries meant there were less funds for improving the academic infrastructure. Sixth, the 80% floor was successfully implemented. Only 13 instructional faculty (out of a total of 627 tenured and tenure-track faculty) fall below 80% of the average salary of their peers in their home unit at the same rank and all 13 have a clear justification for their salaries, according to the Vice-President for Academic Affairs. Seventh, from our vantage point, the administration continues to make a good faith collaborative effort to implement these principles.

III. White Paper Implementation Guidelines For 2001-2002

We believe that the administration and academic units generally adhered to the Implementation Guidelines, which were based on the values set forth in the Principles document. We believe that these two documents have helped to better promote an understanding of the budget process. At the same time, the Senate Budget Committee will need to continue to promote the visibility of the White Paper, the Basic Principles and Implementation Guidelines. While we are satisfied that the Administration and the Deans understand the vision outlined in the White Paper, we believe continuing efforts are needed to insure that faculty members in general and other University of Oregon community members are as aware as they need to be of these documents. The Senate Budget Committee plans to continue discussion of the three documents with Deans, department heads, and the Senate to enhance prospects that the plan outlined in the White Paper is fully and successfully implemented in future years.

IV. Salary Improvement Plan for Year 3 (2002-2003)

In 2002-2003, the Senate Budget Committee and Administration foresee a difficult situation with respect to salary increases. We recommend, in line with the original University of Oregon budget request to the Oregon University System, that average salary increases for all instructional and administrative faculty of at least 3.0% will be possible on January 1, 2003. However, as noted above, it is possible that there will be no faculty salary increase pool whatsoever next year. Even if the higher figure of 3.0% is achieved, this may not be enough to improve our standing relative to comparators, or even prevent relative deterioration. This is not due to lack of goodwill or effort on the part of the Administration. Clearly, the financial situation of the University as an institution within the State of Oregon must improve if there is to be continued progress toward the vision of sustained competitive parity relative to our comparators which was set forth in the original White Paper.

Respectfully submitted to the University Senate on May 8, 2002. 2001-02 SBC members: Mike Kellman, Chemistry (Chair); David. Frank, Honors College, Vice-Chair; Barbara. Altmann, Romance Languages; Suzanne. Clark, English; Lynn Kahle, Business; Nathan Tublitz, Biology; J. Moseley, Provost (Ex-Officio).

REFERENCES

1. University Senate Budget Committee White Paper: A Plan for Sustained Competitive Parity in Instructional Faculty Compensation, http://darkwing.uoregon.edu/~uosenate/dirsen990/SBCfinal.html.

2. Basic Principles of Compensation for Instructional Faculty at the University of Oregon, http://darkwing.uoregon.edu/~uosenate/dirsen990/SBCprinciples.html.

3. White Paper Implementation Guidelines For 2000, http://darkwing.uoregon.edu/~uosenate/dirsen990/SBCimplementation.html.

4. Year 1 (2000-2001) Report of the Senate Budget Committee on Salary Augmentation Plan

http://darkwing.uoregon.edu/~uosenate/dirsen001/reportcom.html

5. Senate Budget Committee Report to the University Senate: Fall 2001

http://darkwing.uoregon.edu/~uosenate/dirsen012/SBC9Oct01.pdf

6. Weighting of full, associate, and assistant professors is 35:30:30, respectively. This weighting was used to determine average salary and average total compensation figures for each of the 8 comparator institutions.