Speaking Out

On Benefits

Executive Vice President John Fry's description of tuition and retirement benefits as having "no clear market linkage" [Almanac, February 27, 1996] reminded me of a famous article in the economic development literature entitled "The Appeal of Confiscation as a Development Strategy." Those benefits were part of the economic package which originally brought faculty and staff members to Penn; confiscating them now may confer a one-time budgetary fillip that must be weighed against the permanent loss of loyalty and trust of those who are thereby deceived.

The accumulating evidence that downsizing does not produce the cost savings and productivity increases predicted for the corporate sector holds a fortiori for universities in which the quality of educational and research output is difficult to measure and to monitor. It will be a bitter irony if the savings extracted by reneging on the social contract made with permanent employees are diverted to future studies of how to repair the damage created by the original actions.

-- William G. Whitney
Associate Director, Wharton
Undergraduate Division

Response to Dr. Whitney

The University of Pennsylvania has not undertaken a comprehensive analysis of its benefits and staff compensation programs for many years. The review of existing benefits against market competitors is both a necessary and appropriate thing to do, especially given the financial pressures the University now faces.

Our goal is to continue to provide a market-competitive benefits package at a significantly reduced cost to Penn. No decisions have been made as to what changes might be appropriate. The benefits review and market analysis will also entail updating information as to needs and priorities of faculty and staff who utilize the fringe benefit program.

Rest assured that appropriate consultation with faculty and staff will be done in order to ascertain their needs and preferences relative to benefits.

-- John Fry
Executive Vice President


March 26, 1996
Volume 42 Number 25

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