1995 Problem B: Aluacha Balaclaba College
 

Aluacha Balaclava College, and undergraduate facility, has just hired a new Provost whose first priority is the institution of a fair and reasonable faculty-compensation system.  She has hired your consulting team to design a compensation system that reflects the following circumstances and principles:

Faculty are ranked as Instructor, Assistant Professor, Associate Professor, and Professor.  Those with Ph.D. degrees are hired at the rank of Assistant Professor.  Ph. D. candidates are hired at the rank of Instructor and promoted automatically to Assistant Professor upon completion of their degrees.  Faculty may apply for promotion from Associate professor to Professor after serving at the rank of Associate for seven or more years.  Promotions are determined by the Provost with recommendation from a faculty committee.

Faculty salaries are for the 10-month period September through June, with raises effective beginning in September.  The total amount of money available for raises varies yearly and is generally disclosed in March for the following year.

The starting salary this year for an Instructor with no prior teaching experience was $27,000; $32,000 for an Assistant Professor.  Upon hire, faculty can receive credit for up to seven years of teaching experience at other institutions.

  • All faculty should get a raise any year that money is available.
  • Promotion should incur a substantial benefit, e.g., promotion in the minimum-possible time should result in a benefit roughly equal to seven years of normal raises.
  • Faculty promoted after 7 or 8 years in rank with careers of at least 25 years should make roughly twice as much at retirement as a starting ph. D.
  • Experienced faculty should be paid more than less-experienced in the same rank.  The effect of additional years of experience should diminish over time, i.e., if two faculty stay in the same rank, their salaries should equalize over time.

Design a new pay system, first without cost-of-living increases.  Incorporate cost-of-living increases, and then finally, design a transition process for current faculty that will move all salaries towards your system without reducing anyone’s salary.  Existing faculty salaries, ranks, and year of service are in Table 1 (not shown).  Discuss any refinements you think would improve your system.

The Provost requires a detailed compensation system plan for implementation, as well as a brief, clear, executive summary outlining the model, its assumptions, strengths, weaknesses, and expected results, which she can present to the Board and faculty.