Compensation Analysis Further Detail
Institutions of higher education must be pro-active in examining their executive, staff and faculty salary models to ensure that they are both consistent with the law and internally defensible.
Over the past 20+ years, Bob Heiny has conducted such salary studies for over 100 higher education institutions. More recently, Erik Heiny has joined the team and has been involved in conducting these studies since 2004. Listed below are examples of data requested for studies focused on faculty compensation:
- Faculty ID
- Appointment Type
- Academic Rank
- Length of Contract-yearly
- Percent Full Time
- Academic Year Salary
- Highest Degree Earned
- Terminal Degree (yes, no)
- First Year at Institution
- Entry Rank
- Entry Salary
- Year Promoted to Current Rank
- Year Received Tenure-if applicable
- Discipline of Primary Assignment
- Gender
- Age
- Ethnicity
- Fringe Benefits
- Evaluation Data- if available
Each individual institution may modify, delete, add or amend the data elements to be studied. Once the data is provided, the investigators will conduct a variety of statistical procedures designed to determine the following information:
- The consistency of promotion patterns among the faculty.
- The consistency of tenure decisions made by the institution.
- A regression model for predicting salary given the objective profile variables.
- A case by case analysis for each faculty member's salary whose predicted salary is at least a fixed amount above the actual salary (the cutoff to be determined in consultation with the institution).
- A case by case analysis for each faculty member whose predicted rank is higher than their actual rank.
- A case by case analysis for each tenure-track faculty member with a predicted status of tenured.
- General recommendations regarding salary adjustments indicated by regression analysis.
Statistical techniques used include multiple linear regression, canonical correlation analyses, and discriminant analyses for classification purposes with respect to tenure and rank.
An external comparison is possible with a peer group of institutions as selected by your institution. If the institution has an aspiration group of institutions, comparisons can be made with individual institutions as well. Percentile salary comparisons will be made using the annual AAUP data by rank. Goals for the institution for one year, three year and five years are commonly given. These goals are set by the institution and the report will give total dollars needed to reach these goals.
It's wise also to compare regularly highly compensated employees' salary and benefit packages to those for similar positions in the higher education marketplace. Salaries for exempt administrators or executives can be studied using national data sources to compare compensation of that institution's executives to compensation for executives in a peer group of institutions similar to the group(s) selected by the institution for faculty comparisons. Given the recent IRS intermediate sanctions for excess benefits for executives of tax exempt organizations, each higher education institution needs to be prepared to justify each benefit provided to its higher paid administrators, executives and faculty members. Board members and/or trustees need to be aware of the potential of a fine up to a maximum of $10,000, if they approved benefits to this class of employees that the IRS determines is excessive.
Bob and Erik will work with your institution to prepare a comprehensive analysis that includes statistical test results, predicted salaries for each faculty member or executive, tables that include misclassifications for both rank and tenure status, data for external comparisons, and recommendations for the institution to address issues and move forward effectively.