Comparison: OSU salaries declining next to benchmarks

By Susan Wittstock

University administrators outlined how Ohio State's compensation packages compare to the University's benchmark institutions and markets in a presentation to the Board of Trustees on April 6.

An analysis of salaries for faculty and staff, and of financial support for graduate associates, was provided by Edward J. Ray, executive vice president and provost; Nancy M. Rudd, vice provost for academic policy and human resources; Larry M. Lewellen, associate vice president for human resources; and J Steven Henderson, director of compensation. The data were collected and organized by the Office of Human Resources' Management Information Analysis and Reporting.

Faculty/staff salaries

For a five-year period beginning with the 1996-97 academic year, Ohio State ranks sixth out of 10 benchmark universities in total compensation increases for faculty salaries. The average five-year total is 23.9 percent; Ohio State's total increase adds up to 19.8 percent.

Consequently, Ohio State faculty salaries have been steadily slipping beneath the average of benchmark institutions.

"Whether we compare our salary increases and overall compensation levels with our benchmark peer institutions, the CIC, or the AAU Research 1 universities, it is clear that Ohio State continues to struggle to move above the bottom third of the reference group. It is critical to our effort to implement our Academic Plan that we develop the financial means to increase our compensation rates relative to other leading universities," Ray said.

The current Ohio State faculty salary average of $73,930 is 2.9 percent below the average benchmark salary of $76,160. In 1999-2000, OSU's average of $70,350 was 2.5 percent below the benchmark average of $72,130. In 1998-99, Ohio State's average faculty salary was $66,890, which was 1.9 percent below the benchmark average of $68,170. While this decline in the average is very small, it is nonetheless not the direction in which OSU would like to see salaries moving, Rudd indicated.

There are differences by faculty rank. Ohio State's full professors are currently 2.7 percent below the benchmark average, associate professors are 2.8 percent below and assistant professors are 3.7 percent below.

Data were also provided regarding how Ohio State colleges' average faculty salaries compare to their counterparts in public benchmark institutions.

Rudd noted that 13 out of 17 colleges are below the benchmark average for faculty salaries. Only Social and Behavioral Sciences and Pharmacy ranked above the average, at 3 percent and 2 percent, respectively, with the majority of the colleges ranking from 1 percent to 4 percent below. Law and Education salaries are 10 percent below the benchmark average, and Social Work is 14 percent below.

An analysis of staff salaries matched positions to local and regional markets. Managers and administrators are 5.5 percent above market, with an average salary of $78,019.

"This particular statistic is generally misleading, as OSU is much larger in size and scope than other employers in the staff study," Henderson noted.

Professional employees are 7.1 percent below market, with an average salary of $41,759. Clerical and secretarial employees, with an average salary of $28,245, are 9.2 percent above market but 9.7 percent below state government.

"Clerical and secretarial are only above market because we have so many people with long service," Henderson said. "In this group, it takes more than 10 years of service just to match the market average."

At an average of $34,139, paraprofessional and technical employees are 8 percent below market.

The rapidly changing budget environment is complicating financial planning for the coming year. Thus, Ohio State has not yet determined what percentage increase will be offered to University employees.

Investing

Since fiscal year 1994, all new funds for raises have been distributed on the basis of merit, which includes equity and market considerations. There has been no across the board raise.

This year's presentation provided a look at raise distribution for fiscal year 2000-01. The charts showed a bell curve distribution for tenure-track faculty, unclassified staff and classified civil service staff. At least one-third of employees received salary increases within half a percent of the average. Henderson noted that a substantial number of employees received salaries well above and below the average, indicating that salary dollars are being distributed strategically according to performance and equity considerations.

For the first time, ethnicity and gender were studied for tenure-track faculty. Henderson noted that the average increase for minority faculty, who comprise 13 percent of the faculty, was 4.44 percent, while the average increase for white faculty was 4.23 percent. Female faculty, who comprise 26.6 percent of the faculty, received on average a 4.35 percent increase, while male faculty received a 4.24 percent increase. This same analysis will be conducted in the future for staff as well.

Graduate support

For the first time this year, administrators provided charts that displayed the ranking of graduate associate financial support in relation to benchmark and public CIC institutions.

"Our net institutional investment for graduate associates is competitive, but our net financial support is not," Lewellen said.

Ohio State ranked sixth out of 14 institutions for a net institutional investment (including tuition covered by the university) of $15,432 for each resident student, but ranked 13th for the average net financial support (stipends and benefits only, without covered tuition) of $10,275 per student.

Lewellen also pointed out that Ohio State is among only three of the 14 comparison institutions that do not provide any medical benefit subsidy to graduate associates.

"It should be noted that there are 311 public graduate programs, and we have chosen to compare with 13 top programs," Lewellen said. "Given that fact, it is not surprising that we have a gap to close."

FCBC seeks compensation increase

The Faculty Compensation and Benefits Committee (FCBC) of University Senate has recommended that faculty salaries increase 6 percent next year to maintain Ohio State's national competitiveness to attract and retain world-class scholars and teachers.

The committee recognizes the tight budget circumstances under which the recommendation is made, but also points to Ohio State's steady decline in faculty compensation in comparison to peer and benchmark institutions. Additionally, the committee cites President Brit Kirwan's references, in the context of the Academic Plan, to the need to nurture, attract and retain high-quality faculty if Ohio State is going to attain even greater academic excellence.

The committee's analysis of overall faculty salary comparisons between Ohio State and dozens of other institutions shows that OSU has declined in standing over the past five years. Ohio State is eighth, down from third in 1996-97, among benchmark institutions (nine identified institutions that are similar to Ohio State in organization and size, but are generally regarded in the top tier of public universities); ninth, down from fourth, among Committee on Institutional Cooperation (CIC) schools (a consortium of the Big Ten plus the University of Chicago); and 42nd, down from 32nd, among American Association of Universities (AAU) member schools. (See compensation story, this page, for related information.)

Based on the analysis, FCBC says that over the past five years, salary increase budgets at benchmark universities have averaged 4.4 percent and Ohio State's has averaged 4 percent. Without a substantial increase in 2001-02, the committee contends, Ohio State's five-year average for salary increase budgets will decline even more when the 5 percent increase of 1996-97 is no longer included in the average.

"If you're going to implement the Academic Plan, you need happy faculty," said Jeff Daniels, chair of FCBC's salary subcommittee and associate professor and vice chair of geological sciences. "It behooves the administration to try as hard as it can to appropriately compensate faculty.

"We are trying to approach this from a positive point of view. We think of improving compensation as mutually beneficial to the faculty and to the administration."

Kirwan told FCBC Chair Richard Herrmann, professor of political science and associate director of the Mershon Center, that he appreciates the committee's exceptional job of analyzing compensation data and issuing recommendations. Kirwan and Edward J. Ray, executive vice president and provost, are scheduled to meet with the committee later this month to discuss the report.

"I think it's extremely important that we put our collective heads together and try to understand what steps we can take as an institution to reverse this unfortunate trend with regard to salaries," Kirwan said.

Examining Ohio State's overall compensation package, combining salary and benefits, in relation to benchmark institutions, FCBC concluded that the overall package is "competitive, but not substantially better, than the average package offered by benchmark institutions," according to the committee report. Calling Ohio State's health insurance "substantially competitive" within the comparison, the committee also noted that premiums are "relatively expensive to employees choosing individual or family coverage under the most popular plan." FCBC suggested that the 30 percent increase in premiums for next fiscal year will further erode Ohio State's competitiveness if the benefits costs are not combined with a salary increase to offset them.

FCBC recommended that as the University redesigns its health insurance plans in 2001-02, it should seek to improve Ohio State's competitive standing in terms of costs faculty members are required to pay for coverage.

"FCBC believes that choice among doctors and coverage options in health insurance is a highly valued benefit and should be preserved," the report stated. "It also believes that the focus of the committee redesigning the health care plans should be on the quality of health care."

Finally, the committee recommended that Ohio State-sponsored benefits now available to spouses be extended to same-sex and heterosexual partners in committed relationships. Its analysis showed that five benchmark universities offer domestic partner coverage.

The report contains a number of recommended principles that FCBC believes should guide compensation decision making. The principles include:

• FCBC supports the concept of salary increases based on merit, but asserts that merit and performance should be considered over time and not on a year-to year basis. The market value of certain tasks also should be included in consideration.

• The complex and diverse nature of University activities, missions and plans makes decentralized decision making about faculty compensation desirable.

• In units in which faculty play a minimal or no role in decision making, consideration should be given to involving faculty members more directly.

Daniels said FCBC has established and expanded the principles section of its report with expectations that subsequent committees will continue to build upon that portion of the document. "We wanted to make the report something that future committees can modify and improve rather than a document that has to be completely redone every year," he said.