MAY 14, 2003 



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



A.        Progress towards 95% parity goal with our comparators. Faculty average salary plus benefits increases in Year 3 of the White Paper (2002-2003) through March 2003 went from $61.6k to $64.8k, averaging an increase of  5%. This figure includes primarily the 3% cost of living adjustment plus increases in benefit costs and in addition raises related to promotion, retention, and post-tenure review. This addition resulted in our total compensation (salary + benefits) decreasing by 1.1% relative to our comparator institutions in the past year. Thus, we lost ground towards the 95% parity goal this year.

B.             Salary Compression. In Year 3, the salary compression issue stayed about the same, in contrast to the previous year when it had gotten somewhat better. The SBC had agreed to make rectification of the compression issue a high priority in future years.  To the extent that we made progress this year, it had to do with full and associate professors remaining at the same level while assistant professors backtracked somewhat from 95.6% to 91.5% of comparators.

C.             Instructors. Accurate salary and compensation data for both tenure-related and non-tenure-track instructors for the academic year 2001-2002 are not currently available from our comparator institutions. See the report of  the Senate Committee on Non-Tenure-Track Instructional Faculty for the most meaningful data on this subject in 2002-2003.  Using the methodology of this report, we would conclude that instructors have climbed from 82.4% of comparator salaries to 84.3%, placing them behind assistant and associate professors on a percentage basis but only .3% behind full professors.



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 2002-3. Administration and academic units continue to make progress regarding the Implementation Guidelines, which were based on the values set forth in the Principles document approved by the University Senate in March 2002.


IV.       Salary Improvements in 2003-2004. 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 last year at this time recommended an average salary improvement of 3.0% for all instructional and administrative faculty starting on January 1, 2003, and that recommendation was followed one month late; however, given current budget uncertainties, it is too soon to speculate on possible salary adjustments for 2003-2004.





MAY 2003


            This report is the third annual account of 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 Compensation, Basic Principles of Compensation for Instructional Faculty at the University of Oregon, and the White Paper Implementation Guidelines. The first annual report was presented to the University Senate in May, 2001, and a second report was filed in May, 2002.


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 that 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 third year of the plan (2002-2003), average salaries of continuing faculty (i.e., excluding faculty who retired and newly hired faculty) increased about 5%; in the previous two years they had increased 6.56% and 6.75 %. Faculty average salary plus benefits increases in Year 3 through March 2003 went from $61.6k to $64.8k, at a time when the local cost of living rose by .8 percentage points. At the end of the third year of the plan (2002-2003), U of O total compensation (salary + benefits) was 87.8% of our comparators when a weighted average of assistant, associate, and full professors was contrasted with a similar average of our comparators. In 2001-2002 the total compensation figure as calculated this year was 89.0%; in 2000-2001, the total compensation figure was 87.6%; 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 5.4% in four years -- in reaching the goal of 95% parity; however, we slipped by -1.1% this year relative to the previous three years (2.5%, 2.6%, and 1.6% respectively in each year).  Note that we slightly modified how benefits are calculated this year to reflect the university contribution more accurately, and we have recalculated the data for all previous years to reflect this modification.


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. In 2002-2003, the changes were, respectively, -.2%, +.2%, and –4.1%.  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 and associate professor salaries did not shift appreciably while assistant professors fell relative to our comparators. This two-year improvement in the salary and compensation 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 situation of assistant professors relative to comparators. The four-year cumulative figures (2.7% gain for full professors relative to comparators, 4.2% for associate professors, and 4.7% for assistant professors) still shows a worsening of the compression issue over four 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.

            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, unavoidable uncertainty influences 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 (84.7% parity for full professors, 90.2% for associates, 91.5% for assistants) signal a real issue that 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. 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 about 10 tenure-related and 260 non-tenure-track instructors (includes instructors and senior instructors). The average salary increase of full-time instructors in 2002-2003 was about 4%, from $50.9k to $52.8k. Accurate salary and compensation data to address salary comparisons for tenure-related and non-tenure-track instructors are currently being developed.  Using the methodology employed here, instructors improved 1.9% relative to comparators in 2002-2003 to 84.3%.  These comparator data place instructors well behind assistant and associate professors but only slightly behind full professors.  During the 4-year period instructors have actually fallen from 86.8% parity to 84.3% parity.  This issue should receive attention in the coming year.


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 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 on our comparators in each of the past three years, the results this year represented a loss of 1.1%. The reasons for this step backwards are (1) the impact of the worsening budget situation of the State of Oregon on the University and (2) better compensation performance by our comparators than we had anticipated in this period of national recession.


In other respects, we have been more successful. As the second aim the White Paper and Principles documents set forth the goal that the vast majority of instructional faculty should receive salary increases. In 2002-2003, the vast majority of  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 achieve this goal fully in the forthcoming year. Fourth, salary adjustments did include a cost of living component of 3.0%.  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. Very few instructional faculty (out of a total of more than 600 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


            The administration and academic units generally adhered to the Implementation Guidelines, which were based on the values set forth in the Principles document. These two documents have helped to promote a better 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, 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 4 (2003-2004)



In 2002-2003, the Senate Budget Committee and Administration foresaw a difficult situation with respect to salary increases. We recommended, 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% occur on January 1, 2003, and this improvement took place one month late. For 2003-2004, the situation may be worse.  As noted above, it is possible that there will be no faculty salary increase pool whatsoever next year due to legislative mandate. We cannot assess options until the legislature finishes its work.  Even if a higher figure of 3.0% is achieved, this amount may not be enough to improve our standing relative to comparators, or even to prevent relative deterioration. This outcome 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.


The SBC will continue to evaluate the components of compensation to ascertain the relative worth of compensation level.  For example, if OUS contributions to PEBB increase but the relative benefits to OUS employees decrease because of how benefits are distributed among classes of employees (as opposed to rising health care costs), that may not be considered an advancement.  Likewise, if university contributions to PERS increase but actual benefits decrease due to legislative mandate, that may not represent progress.  In some cases the calculations of benefits may be quite complicated and require careful scrutiny.


The SBC should brainstorm with the Administration about ways to continue progress toward the White Paper goals in the current fiscal environment.


Respectfully submitted to the University Senate on May 14, 2003. 2002-03 SBC members: Lynn Kahle, Business (Chair); David Frank, Honors College; Barbara Altmann, Romance Languages; Suzanne Clark, English; Steven Hsu, Physics;  Steven Kevan, Physics;  Greg McLauchlan, Sociology;  Frances Dyke, Associate Vice President for Resource Management; John Moseley, Provost (Ex-Officio).








1. University Senate Budget Committee White Paper: A Plan for Sustained Competitive Parity in Instructional Faculty Compensation,


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


3. White Paper Implementation Guidelines For 2000,


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


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


6. Senate Budget Committee Report to the University Senate: Fall 2002


7. 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.