Yudof’s Salary Plan: What does it Really Mean?

In August, President Yudof announced a plan for merit increases for non-represented staff making less than $200,000 and for faculty who have been deemed meritorious. The initial idea was to reward people who have not gotten raises during the last few years. Yudof also wants to give the campuses the ability to stop other universities from stealing UC faculty; however, this plan is full of unanswered questions.

Coupled with the new merit-based 3% salary increase, we find a new policy that will allow faculty to use grant money and other external sources of income to increase their base salaries. A good discussion of this plan can be found at Remaking the University, but it is important to stress that in reality, there are four main ways that people in the UC get increased compensation: across the board salary increases, merit pay, special compensation pools, and negotiated compensation. During the last few years, some represented employees have gotten salary increases, while many other employees have continued to receive merit increases. Furthermore, the medical centers and other units have developed their own special compensation pools, while non-represented faculty and administrators have continued to get renegotiated compensation deals.

In fact, except for across the board salary increases, most of the compensation increases are handled on the campuses on an ad hoc basis, and it does not look like this system is changing. Moreover, in the current move to let the campuses keep all of their revenue, it is unclear what Yudof’s salary plan means. Is the Office of the President going to distribute state funds to the campuses in a special merit pool, or is the idea to simply instruct the campuses to allow staff and faculty to compete for a share of their local revenue?

If we look at the facts on the ground, we discover that professors and administrators often get their compensation increases through private negotiations. As the past Academic Council Chair Dan Simmons wrote a few years back in his study, “The Death of the UC Salary Scales,": "At least one campus has provided off-scale salaries to 100 percent of its new faculty appointments. Some campuses are utilizing devices to broadly provide off-scale enhancements to faculty in order to regularize the salary inversions that result from hiring new faculty with off-scale salaries exceeding the compensation of full professors. One or more campuses utilize a shadow salary scale to reflect market level compensation.” In other words, many--if not most--of the non-represented faculty do not get their raises through merit reviews or movements up the salary scale; instead, increases are negotiated through private deals between professors and administrators. In fact, Simmons pointed out that 85% of the professors are being paid off of the official salary scale.

As Simmons argued, the current system has many flaws: “The evolution of a system that compensates faculty who are newly appointed, or who threaten to leave and are retained with off-scale salary increments, replaces the historic peer reviewed compensation system with a system that is individually negotiated with campus administrators who have the discretion to grant or deny a salary increment. A step IV professor in one place is no longer on the same playing field as a step IV professor in another place, perhaps as close as across the hall in the same department. Indeed, the step IV professor might discover that his or her new colleague recently hired as an assistant professor is earning a higher salary.” Not only are some new faculty getting higher pay than faculty members who have been teaching for several years, but the off-scale system circumvents the merit review and peer review process. It also creates collusion between individual faculty members and administrators.

As I have pointed out before, the end result of the current system is incredible inequality within the professorial ranks, with some faculty members getting $40,000 raises and some getting nothing. While we have been told that the faculty senates have been working on this problem, there is no evidence that a new system and culture has been implemented. In fact, the Office of the President has been pushing a market-based system that Simmons previously critiqued in the following way: “The market approach to setting individual salaries says several things to a faculty member who has loyally done his or her job and progressed through the salary ranks on a regular basis. First, you are a fool for not having sought to move elsewhere with a higher salary in order to negotiate an off-scale at home. Not only are you a fool, your work must be worth less than the person across the hall newly hired with an off-scale that is higher. Second, the first thing you should do is look for an appointment at another university. The position might be more attractive in any event than working in a place that does not appreciate your efforts. Third, the University must be more interested in bringing in new superstars with expensive start up packages than maintaining the loyalty of its current faculty base.” Thus, in order to compete with private universities for professors and administrators, the university is forced to renegotiate salaries in a secretive and individualized manner. In this system, certain people are deemed market worthy, while others see their wages stagnate.

By arguing in his letter that the new pool of money should be used to recruit and retain faculty who are being “courted by competing institutions,” Yudof is signaling to the campuses that they should continue to negotiate secret deals with their stars and potential stars. While some may prosper from this system, many will actually see their compensation go down as they pay more for healthcare and pension. However, since everyone wants to be a star, no one will rock the boat, and the majority will suffer. Like our national economy, wealth inequality grows because the majority of people think they will profit from a system that screws them.