Linking Faculty Raises to College Resources

AAUP activists at one college created a salary-improvement plan that produced raises so big they surprised the planners m  themselves.

By John Miller

“We are not going to be the poster children for a capital campaign that will not benefit us,” insisted the faculty at Wheaton College in spring 1992. For nearly two decades, the AAUP had led a drive to raise salaries at the small liberal arts college in Massachusetts. Despite repeated assurances from the administration that the faculty was making progress, faculty salaries remained stuck next to last in the “Northeast Nine,” our comparison group, well below the mean of the group.¹  On top of that, the college had just adopted a strategic plan that failed to make improving faculty salaries a priority.

Faculty members were so angry that we signed a petition proclaiming our lack of confidence in the management of our salaries by the board of trustees—we even staged a polite demonstration on the library steps as the board entered its May meeting. We were determined not to play ball in a capital campaign that failed to acknowledge our needs.

Our actions started to pay off that fall. Ed Merck, financial vice president of the college, with the blessing of Wheaton’s new president, Dale Rogers Marshall, approached John Gildea, Gordy Weil, and me, three AAUP activists in the economics department. He said he wanted to explore ways to break the impasse around improving faculty salaries.

One of the first things we did was to take a close look at the resources available for faculty salaries and actual salary numbers. Wheaton salaries were 8.4 percent behind the mean among our comparison group (adjusting the salary numbers for Wheaton’s distribution of faculty across ranks). But Wheaton’s resources (defined as the sum of gifts for operation, 5 percent of endowment holdings, and net student revenues—tuition and fees minus awards of financial aid) were 31.9 percent below the comparison group’s mean. Our hearts sank when we saw the resource number. I remember muttering, “You can’t get blood out of a stone.”

At that point, we all agreed that the only way forward was to link improve­ments in faculty salaries to improvements in college resources. Ed, along with David Caldwell, the director of institutional research, devised a model plan that did just that. For weeks, we reviewed and revised the model. My economics department colleagues and I tried to convince ourselves that the plan would actually improve faculty salaries. Ed probably needed to assure the president and the board of trustees (and perhaps himself) that our plan wouldn’t bust the college’s budget.

What we came up with, the Wheaton salary plan, works much like a profit-sharing plan in private industry. When the college’s resources improve relative to those of our competitors (the other eight colleges in the Northeast Nine), the faculty receives a raise that improves the relative position of its salaries in the comparison group by the same percentage (with a two-year lag to allow us to collect the necessary comparative data). For example, in 2000, Wheaton’s resources, pushed up by increasing enrollments, jumped 3.4 percent relative to the comparison group. To move faculty salaries 3.4 percent closer to the group’s mean, the college had to grant a raise 3.4 percent above the average raise of the group in 2002. The raise turned out to be 7.1 percent for continuing faculty.

In 1992, of course, we didn’t know resources would improve so dramatically in the upcoming years, and linking our salaries to the position of the college’s resources in our comparison group seemed risky to many faculty. But once the administration accepted a floor for salary increases equal to the rate of inflation, the faculty approved the plan. The plan was to be renewed every three years, allowing the faculty or the administration to back out if it wasn’t working.

But it did work—not in its first year, 1996, but within the first three years. In the third year, we received an 11 percent raise, because the college’s resource base expanded dramatically as Wheaton, a former women’s college, found its niche among co-ed liberal arts colleges and attracted more students. At the end of the first three-year term of the salary plan, we had made so much progress on salaries that the administration insisted that we add a ceiling to the plan. Faculty salaries were not to rise above the mean of the comparison group until the college’s resources had moved within 20 percent of the mean of the group. With an 11 percent raise in our pocket, we readily agreed.

By the end of the second three-year term, our salaries had reached the mean of the Northeast Nine for the first time. And college resources had moved to within 19.6 percent of the mean of the group, far closer than they had been when the plan began. Since then, the ceiling of the plan has been in effect, because college resources have moved no closer to the mean of the group. Our current working agreement with the administration is to keep faculty salaries at the mean of the Northeast Nine.

The benefits of the salary plan went beyond improving salaries. First, the plan dictated that faculty salaries be determined at the beginning of the budgeting process, rather than after other lines had been set. In addition, the salary plan reduced what economists call negotiating costs. With the plan in place, faculty and administrators were freed from the endless (and often contentious) annual meetings at which we had worked out salaries for the next year. The salary plan also made faculty more conscious of the extent of the college’s resources. After all, our financial well-being is now directly linked to that of the college. We realize that the success of college recruitment, retention, and development all directly affect faculty salaries.

Wheaton has just developed a new strategic plan in preparation for another capital campaign. Unlike the last strategic plan, this one incorporates the salary plan and even contemplates “upgrading” our comparison group and improving benefits as well as salary. This time around, our new president, Ronald Crutcher, will have no problem enlisting faculty in a capital campaign that will not only make the college better off, but also boost our compensa­tion. The faculty might even be willing to pose for the campaign posters.

Note

1. The Northeast Nine, our comparison group, consists of the following colleges: Bates, Colby, Connecticut, Hamilton, Haverford, Hobart and William Smith, Muhlenberg, Trinity, and Wheaton. Back to text

John Miller is professor of economics at Wheaton College (Massachusetts), past president of the Wheaton AAUP chapter, and secretary of the AAUP’s Massachusetts conference. He can be reached at jmiller@wheatonma.edu.

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