Report to the Board of Trustees
Academic Affairs and Personnel Committee 
December 4, 2003
Prepared by the Faculty Salary Adjustment Taskforce 
Approved by the Faculty Senate December 3, 2003
 Presented to the Chancellor October 20, 2003

Background:

1999 Report on Faculty Salaries and Compensation: In 1999, the General Assembly adopted a special provision, House Bill 168, Section 10.20, calling upon the Board of Governors to 1) study the salaries and other compensation of faculty for each constituent institution, comparing them to other peers in the state, the region, and the nation; 2) make recommendations on appropriate adjustments to achieve competitive salary levels and to enhance academic excellence on campus; and 3) identify revenue options for funding the recommended adjustments.  The study revealed that average faculty salary increases at UNC institutions have lagged behind the nation in recent years.  All UNC institutions compared less favorably on total compensation as well as on salaries alone. To establish a threshold that would make UNC institutions strongly competitive nationally in faculty salaries compared against their national counterparts, the system should aim at the 80th percentile (top quintile) or above using a combination of Carnegie and AAUP public institutional categories. Given the budget crisis that followed, very little has been done to bring Western’s salaries in line with peer institutions.

Board of Governors’ Resolution on Faculty and Non-Faculty EPA Salary Increases 2003-2004: No state funds were appropriated for salary increases for 2003-2004. The Board of Governors determined that any institutional funds for salary adjustments shall be used as determined by each chancellor subject to the limitations and conditions set out to award increases to faculty and non-faculty EPA employees based on consideration of performance, to recognize merit, and to address salary inequities that may have arisen during a period of scare resources for academic salaries.  

Fall 2003 – Faculty Salary Adjustment Taskforce: The Chancellor created this task force to research and make recommendations for adjusting faculty salaries in the event that disparities exist between faculty salaries at Western Carolina University and our peer institutions. The Chancellor forwarded a model UNC Charlotte used for making equity adjustments that was approved by the Board of Governors that the Taskforce used in creating the model for Western. The Taskforce compared Western with national peer institutions by discipline, rank and specialty. The Taskforce was asked to present its initial phase one recommendations by the December Senate meeting and the December Board of Trustees meeting.  The Taskforce is also charged with presenting a long-range plan for bringing faculty salaries in line with our peer institutions.  
The Faculty Salary Adjustment Taskforce:

Members:
Newton Smith, Chair				Austin Spencer, BUS
Robbie Pittman, EAP				Beverly Little, BUS
Mary Jean Herzog, EAP				Tim Carstens, LIB
Barbara Bell, EAP					Chuck Wooten, A&F
Henry Mainwaring, A&S				Rick Collings, AA
Ann Rogers, A&S					Rich Kucharski, Legal
Robert Kehrberg, A&S				AJ Grube, EEO
Sue McPherson, AS				Kathy Wong, HR
Aaron Ball, AS

Meetings:
September 12, 2003				October 2, 2003
September 19, 2003 				October 17, 2003
September 26, 2003				November 14, 2003

Recommendations of the Taskforce for Phase One:

Eligible group defined: The first task of the Taskforce was to define the faculty who would be eligible for salary adjustment.
•	Permanent full-time faculty (includes 9 month and 12 month) excepting endowed positions
•	Tenured, tenure-track, or fixed term
•	Eligible 12-month faculty were pro-rated based on 9-month salary base 
•	Salary for comparison excluded administrative supplements
•	Faculty who were employed during 02-03 
•	FY January 2003 hires included
•	Faculty must have “met expectations” for the last two Annual Faculty Evaluation’s (AFEs)

Peer group defined: After much discussion the Taskforce determined that the most appropriate peer group would be the Public Masters Institutions as defined by the College and University Professional Association for Human Resources (CUPA) which gathers national data on salaries and compensation for all masters granting institutions. This is the group Western competes with in attracting and retaining qualified faculty.
•	CUPA Public Masters Institutions
(Use of Western’s typical 15 institution peer group created numerous concerns:
o	Sample size too small and did not provide salary data for all disciplines and ranks
o	Small sample size was further complicated by accredited versus non-accredited institutions and question of how endowed professor salaries skew the data
o	Public Masters Institutions provides a sample size large enough to remove the above concerns.  
o	Public Masters Institutions data provides data for every discipline.  
o	UNC-Charlotte used national data for many of the same reasons cited above.)

Salary Increase Distribution Formula Defined: The Chancellor asked the Taskforce to base its recommendations on a total of $300,000.
•	The Taskforce recommended that all eligible faculty who “met expectations” receive a flat $300 increase added to their salary base. This disperses approximately $82,800 of the total. This increase represents recognition of merit.
•	The Taskforce recommended that the remaining funds ($217,200) be distributed as equity adjustments based on the percentage that each individual faculty member is behind the average CUPA salary for that discipline and rank. This is similar to the model that UNC-Charlotte used.  
•	Funds distributed in this manner will be based on labor market value for each discipline by rank. Justification must meet criteria as defined in the 03-04 BD119 instructions.
•	Only the faculty whose salaries were below their peers for that rank and discipline will receive equity adjustments.
•	Equity adjustments for individual faculty members will be used to bring their salaries to level of their peers but not above.
•	The process used for equity adjustments will be based on a mathematical process (see attached formula below). 

Time Line for Phase One:

The Taskforce presents this first stage plan for Academic Year 2003-2004 for approval by the Board of Trustees. Kathy Wong in Human Resources assured the Taskforce that the time line for faculty increases was workable and that adjustments could be made via the January pay check. 

Phase Two Interim Report:

The Taskforce recognized that the $300,000 could not completely remedy the inequities created by the budgetary crisis at the state level. Bringing faculty salaries alone to the level of our peer institutions would require approximately $1,040,000. Other salaries within the University also have fallen behind our peer institutions and represent a competitive disadvantage in recruiting and retaining quality non-faculty EPA and SPA staff. Other unbudgeted needs such as the implementation of Banner TM will also need to be addressed at a time when the state budget is still under duress. The Taskforce acknowledged these needs, and though our original charge was to address faculty salaries, the broader needs of the university human resources became a part of the discussion of the Taskforce summarized here.

The Taskforce considered the possibility of using local tuition increases as a way of making the University competitive. Discussions with Chancellor Bardo and Vice Chancellor Wooten indicated that local tuition increases might provide remedy if approved by the Board of Governors. If this step is taken, the Taskforce will continue its work and make further detailed recommendations. In the following sections, we have included models and the need for further study for continuing the process of bringing Western to the level of its competitive peers:

Faculty Salary Adjustment Model:

The Taskforce suggested that the next phase of the adjustment should follow a model similar to the one recommended above for Academic Year 2003-2004.
•	All eligible faculty who have met expectations should receive some monetary recognition.
•	A portion of the remaining available funds should be retained to award faculty who have exceeded expectations.
•	The bulk of the available funds should continue to be used for equity adjustments.
•	The process should be as open and transparent as possible.
 
 SPA Salary Adjustment Background and Model:

April 1998: Employees in lowest pay grades (50-56) were targeted because this was the area in which salary compression was the worst.
•	Peer group – UNC System average salary for each classification and grade.
•	Employee had to have career status (24 consecutive months employed in a permanent position).
•	Increases granted based on full years of service beyond career status and amounts determined by calculating a half percent of base salary times the number of years of service above career status.
•	Cap – 10 years service and 5%
•	Minimum increase - $240
•	All increases pro-rated for less than full-time employees.
•	125 employees received increases

June 2000: Employees in all classifications and grades were included in the study.
305 employees received increases.

June 2001: Every SPA employee working at or below the 80th percentile of UNC system average salary for that classification and grade was included in the study.

On going: Annual analysis performed by HR (continue to keep Staff Forum informed and involved).
•	As reserves build, we will continue to raise the percentile goal of UNC system average salaries and target those employees below that percentile.
•	The above criteria now routinely reviewed for all other actions, i.e., promotions, new hires, reclassifications, etc.  

EPA Non-Faculty Salary Model: No model exists at present. A committee should follow a similar process as that taken by the Taskforce. They will 
•	Need to determine the target group.
•	Need to define peer comparison group.
•	Need to determine amount available.
•	Need to determine eligibility criteria.  
•	Need to determine distribution formula.

The Taskforce respectfully submits its recommendations to the Board of Trustees.

Attachment: 
The following describes the formula reported to the Senate and Chancellor in October:
o	Approximately $300,000 is available for adjustment purposes, and if the proposal is approved by the Board of Trustees and Board of Governors the adjustment will be retroactive to July 1.
o	Eligible faculty include full-time tenured, tenure track, and fixed term faculty who “met expectations” in their last two AFE and were employed last year (not including endowed chairs and pro rating 12 month faculty to 9 month and excluding administrative supplements).
o	All faculty meeting the above description will be given a $300 merit raise. This amounts to $82,800. The remaining $217,200 will be used for equity adjustment.
o	Adjustments will be determined purely by mathematical processes not through departmental or college committees.
o	The peer group chosen for comparison is all CUPA Masters Granting Public Institutions. This provides large enough sample size data for every discipline.
o	Each faculty member’s salary will be compared to the peer for that discipline and rank to determine the percentage they fall below the peer group. This is converted to a whole number.
o	All these percentages are added to determine how far the university is behind the peer group. This is converted to a whole number.
o	A ratio of the individual faculty member’s number to the university’s total number is used to determine what portion of the whole an individual faculty member adjustment will be. 
o	That ratio is multiplied by $217,200 to find out how much the individual’s salary will be adjusted above the $300 merit.
o	The formula: 1 – IS/MS=ISG ; Total all ISGs = TSG; then ISG/TSG X $217,200 = equity salary adjustment for that faculty member. Note: IS stands for Individual Salary; MS stands for Mean Salary for that rank and discipline in the CUPA peer group; ISG stands for Individual Salary Gap; TSG stands for Total Salary Gap.  
o	Adjustments will be used to bring faculty members only up to the peer comparison level. Any amount over that figure will return to the adjustment pool.