SENATE Economic Status of the Faculty
1998-99 Report of the Senate Committee on the Economic Status of the Faculty
May 5, 1999
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
I. Introduction
The Senate Committee on the Economic Status of the Faculty (SCESF) is charged by the "Rules of the Faculty Senate" to:
- Gather and organize data on faculty salaries and benefits,
- Issue an annual report on the economic status of the faculty, and
- Represent the faculty in the determination of University policy on salary issues.
The focus of this report is on the economic status of the faculty based on salary and benefits data. In contrast with recent economic status reports of SCESF, we do not offer recommendations here for development of faculty salary policy--the Committee's main strategy in the past for representing the faculty in the determination of faculty salary policy. As described in more detail in Appendix A, the Committee, in consultation with the Senate Executive Committee (SEC), is developing an alternative process to perform this responsibility. As described in Appendix A, SCESF will report to SEC and the Faculty from time-to-time on issues and developments in faculty salary policy.
In designing this report on the economic status of the faculty, SCESF has addressed three broad concerns:
- The salary setting process: how funds become available for faculty salaries and the how annual salary increase decisions are made.
- External comparisons: the competitiveness of faculty salaries in comparison with external indicators.
- Internal comparisons: variability of faculty salaries within the University, and sources of possible salary inequity that might occur within observed variability.
Major sections of this Report are devoted to each of these three topics, while the final section is devoted to SCESF's overall conclusions about the economic status of the faculty.
In performing its responsibilities, SCESF has been cognizant of Penn's current salary policy as stated by the President, Interim Provost, and Executive Vice President (Almanac April 28, 1998; see Appendix B). Penn's guiding principle in salary planning is to pay faculty and staff (a) competitively, (b) in relationship to the markets for their services, and (c) in order to acknowledge their contributions to the University, and to help Penn remain a strong and financially viable institution.
In studying faculty salaries for this report, SCESF has benefitted from detailed salary information (excluding, of course, individual faculty salaries) that has been provided by Penn's administration. Our understanding both of Penn's competitiveness with peer institutions in faculty salary levels and of faculty salary variability within Penn has been enhanced enormously by access to this information and by the assistance of those who produced it. The SCESF acknowledges this cooperation with appreciation.
Income Dollars $1,000,000s Percentage 1. Tuition 294
48% 2. Indirect Cost Recovery 79
13% 3. Subvention 66
11% 4. Commonwealth* 36
6% 5. Sales and Services 28
5% 6. Special Fees 18
3% 7. Gifts 9
1% 8. Other 23
4% 9. Health Services Transfer for School of Medicine 53
9% Total Income 606
100% Expenses 1. Faculty Compensation 163
27% 2. Staff Compensation 102
17% 3. Current Operating Expenses 98
16% 4. Student Aid 83
13% 5. Allocated Costs a. Library
30
5% b. School Facilities etc.
81
13% c. Central Administration
54
9% Total Expenses 611
100% * The grant from the Commonwealth of Pennsylvania is designated for three schools as follows: Veterinary Medicine: $31M; Medicine: $4M; Dental Medicine: $1M.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
II. Resources for Faculty Salaries
Faculty salaries are the product of a two-step process. First, most of each school's resources are raised in accordance with the principles of Penn's Responsibility Center Budgeting System. In addition, subvention is distributed to schools by Penn's central administration. Of these resources, each School makes a certain amount available for faculty salaries in three respects: (a) sustaining existing faculty appointments, (b) providing annual salary increments for continuing faculty members, and (c) creating salary funding for new faculty positions. In addition, schools must provide funds for employee benefits that approximate 30% of all such faculty salary expenditures. Second, deans of schools make annual salary increment recommendations to the Provost for continuing faculty members by a different process. These two steps are described separately in the following sections.
A. Responsibility Center Budgeting System
In accordance with principles of the Responsibility Center Budgeting System (RCBS), each of Penn's 12 schools is allocated most of the income that it generates annually. In turn, each School is obligated to establish a level of annual expenses that does not exceed the total of available income.
A school's revenues are divided into two major fund groups: "General Operating Funds" (which were termed "unrestricted" funds prior to 1997), the expenditure of which is not restricted by specific terms and conditions established by external donors; and "Designated Funds" (which were termed "restricted" funds prior to 1997), the expenditure of which is restricted by specific terms and conditions established by external donors of such funds. Because payment of the base academic year salaries of most standing faculty members is assured from General Operating Funds (even though significant portions of such salaries are actually paid from Designated Funds), only principles of the RCBS as applied to General Operating Funds are described here. [footnote 1]
In general, the General Operating Funds income available to each School is of three types: earned income, gift income, and centrally-awarded subvention. These sources are shown in greater detail in Table 1 for all of Penn's 12 Schools combined. Tuition is, by far, the greatest source of school income, with indirect cost recoveries from externally funded projects a distant second.
With respect to faculty salaries, it is possible (at least in principle) that the amount of money available to a school could be increased by augmenting a school's income from one or more of the nine specific sources listed in Table 1. To the extent that it is possible to increase a school's income from sources that are based on the work of faculty (e.g., tuition, indirect cost recoveries, and net income from clinical practices), faculty members have influence over the growth of income that is available for supporting faculty salaries.
General Operating Fund expenses for each school are also of three general types: academic compensation [footnote 2] (i.e., salary plus benefits), other school-related operating expenses (including staff compensation, materials, equipment, debt service, and student aid), and central University costs that are allocated among the schools according to RCBS formulas (e.g., facilities services, central computing services, central research support services, the University Library System, public safety, etc.).
These expenses are shown in greater detail in Table 1 for all of Penn's 12 schools combined. Academic compensation and total allocated costs were the greatest (and roughly equal) sources of school expenses in the FY 1998 budget. With respect to academic salaries, it is possible (at least in principle) that the amount of money available within a school could be increased by reducing that school's "standard of living" (i.e., by reducing the level of staff and other support, facilities used, and/or student aid), or by increasing the efficiency of that school's administrative operations (or those of the central University) so that key services are delivered at current or expanded levels, but a lower cost.
In essence, the RCBS sends the message to schools that each can spend as much as it can earn, and that each School has a great deal of latitude in how to spend its income. More, or less, might be spent on faculty salaries at a school's discretion. A major exception to this message is that a significant component of income is subvention--an annual award of funds to each school by the University centrally. The amount of subvention awarded to each school is based on a number of considerations such as an adjustment for certain inequalities among schools in the costs of providing instruction and supporting research. One of many such considerations can be the variation of average faculty salaries by rank among schools. For this and other reasons, the percentage of school expenses provided by subvention income varied widely among Penn's schools from a low of 4% to a high of 28% during FY 1998. [footnote 3]. These percentages suggest that considerable central judgment is used in allocating subvention to schools.
B. How Annual Salary Increase Decisions Are Made
Annual salary increase recommendations for continuing faculty members are made by Department Chairs (in schools with departments) and by Deans, with review and oversight by the Provost (see Appendix B for a statement of the "Salary Guidelines For 1998-99" as published in Almanac April 28, 1998, p. 2). Penn's President, Provost, and Executive Vice President set an upper limit on a "pool percentage" for salary increases. For FY 1999, schools were authorized to award, as salary increases, a pool of up to 3.5% of the FY 1998 salaries of continuing faculty members. The recommended salary increase range was 1% to 6%, with Deans being obligated to consult with the Provost about any increases outside this range. Deans could supplement the pool by 0.5% without the Provost's approval, and by more than this with the Provost's approval. To address possible inequity in faculty salaries, Deans were asked to "pay particular attention to those faculty who meet our standards of merit but whose salaries for various reasons have lagged over the years."
Within this framework of available funds, Department Chairs and Deans had the responsibility to recommend salary increases to the Provost for each continuing faculty member based on general merit, including recognition of outstanding teaching, scholarship, research, and service. In addition, the Provost reviews the Deans' faculty salary recommendations "to insure that raises on average reflect market conditions in each discipline."
Average academic base salary percentage increases of Penn standing facutly members by rank in comparison with the Consumer Price Index (CPI) and Penn Budget Guidelines
Group/Condition Average Fiscal Year Compound Cumulative 1986-98 1998 1999 Full Professors Median 4.30% 3.50% Mean 5.00% 4.60% 109.50% Associate Profs Median 4.00% 3.50% Mean 5.40% 5.20% 115.70% Assistant Profs Median 4.30% 4.40% Mean 6.00% 6.00% 127.90% All Three Ranks Mean 5.20% 5.00% UScityaverage CPI --- 1.70% NA 52.50% Budget Guidelines Mean 3.50% 3.50% 73.80% NOTE: Academic base salary percentage increases pertain to all Penn standing faculty members who continued in the same rank during the periods of time reported. Excluded were all members of the Faculty of Medicine, all Clinician Educators from four other schools (Dental Medicine, Veterinary Medicine, Nursing, and Social Work) that have such positions, and faculty members who were promoted or entered Penn employment during the periods of time reported.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
III. Penn Faculty Salaries: External Comparisons
Average Penn Faculty Salaries (i.e., academic year base salaries) are compared with three external indicators in the following sections: growth in the Consumer Price Index (CPI), a survey of faculty salaries at about 25 public and private research universities in the United States conducted annually by the Massachusetts Institute of Technology (MIT), and a sample of 17 public and private research universities selected as comparable to Penn from among those included in the "Annual Report on the Economic Status of the Profession" issued by the American Association of University Professors (AAUP). As a methodological note, all faculty salary information discussed in this report refers to the aggregated "academic year base salary" of individual faculty members whether salaries are paid from General Operating Funds and/or from Designated Funds. In addition, all salary data reported exclude members of the Faculty of Medicine and all standing faculty members who are appointed as Clinician Educators from four other schools that have such positions (Dental Medicine, Veterinary Medicine, Nursing, and Social Work).
A. Comparisons with Growth in the Consumer Price Index (CPI)
Faculty salary increments by rank, averaged for all schools except Medicine, for FY 1998, FY 1999, and compound cumulative for FY 1986-98, are shown in Table 2 in comparison with comparable data for the CPI (UScityaverage) and Penn budget guidelines. Even though the nation is in a period of low inflation, it is still reassuring to observe that median faculty salary increments for all three ranks for FY 1998 exceeded the percentage growth in the CPI and Penn's budget guidelines for both 1998 and 1999.
As noted in last year's report, the most impressive salary increase percentages were the cumulative compound salary increments over the 13-year period from FY 1986 to FY 1999 as seen in Table 2. On the whole (all ranks combined), cumulative mean Penn faculty salary increments were well over twice the growth in the CPI (Uscityaverage). Obviously, much of the faculty salary decline relative to inflation during the 1970s has been regained in recent years. [footnote 4]
Furthermore, the mean compound cumulative growth in faculty salaries over the 13-year period exceeded Penn's budget guidelines by a wide margin. These guidelines refer to the centrally-recommended salary pool percentage. What has happened is that many (perhaps all) of the Deans of Penn's schools have added considerable additional school resources to the recommended cumulative base pool for salary increments. If we estimate the compound cumulative increase over the 13-year period for all ranks combined to be 112% (the exact number is not available), the cumulative compound additional contribution of schools to the salary pool must have approximated 38% (112% minus the recommended budget guideline of 74%). Thus, it is apparent that both Penn's central and school administrations have made substantial joint efforts to raise the level of faculty salaries well in excess of the rate of inflation in the CPI during the past 13 years. [footnote 5]
Percentage of continuing Penn standing faculty members awarded percentage salary increases exceeding the percentage growth in the consumer price index (CPI) for Philadelphia for the twelve-month period ending June 1998
Percentage of Faculty with Salary Increases Exceeding Growth in the CPI (Phil.) Schools and Disciplinary Areas All Standing Faculty For FY 1999 Continuing Full Profs: Cumulative For FYs 1993-99 Annenberg 93% 100% Dental Medicine 96% 100% Engineering & Applied Science 95% 93% Grad Education 97% 100% Grad Fine Arts 100% 100% Humanities (A&S) 96% 100% Law 97% 94% Natural Science (A&S) 88% 94% Nursing 88% 100% Social Science (A&S) 95% 87% Social Work 76% 100% Veterinary Med 89% 100% Wharton 94% 97% NOTE: Academic base salary increases pertain to all Penn standing faculty members who continued in the same rank during the periods of time reported. Excluded were all members of the Faculty of Medicine, all Clinician Educators from four schools (Dental Medicine, Veterinary Medicine, Nursing, and Social Work) that have such positions, and faculty members who were promoted or entered Penn employment during the periods of time reported.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
The overall increases in faculty salary by rank in comparison with growth in the CPI, as seen in Table 2, are reported by school (including three disciplinary areas of SAS) in Table 3. A high percentage of faculty members in all of these schools/areas was awarded salary increments for FY 1999 that exceeded growth in the CPI (Phil.) for the twelve-month period ending June 1998. Given the low percentage level of inflation in Philadelphia (1.14%) and the fact that aggregate salary increases for the continuing professorate ranged from a low of 3.77% (Social Work) to a high of 13.04% (Annenberg) for FY 1999, it is puzzling to see that 6 of 13 schools/areas awarded a salary increase below the CPI growth percentage to more than five percent of all continuing standing faculty members. It is also disappointing because an increase of less than the CPI growth percentage for an individual faculty member represents an effective reduction in the purchasing power of a salary.
At a time when the School offering the lowest average salary increase percentage (3.77%) for the current year that was over three times the CPI growth percentage in Philadelphia (1.14%), it appears that recent salary increases in the case of some individual faculty members might have been inequitably low. Since salary increases are based principally on merit [footnote 6], the data of Table 3 for FY 1999 imply that about 7% of standing faculty members at Penn performed at less than a satisfactory level. We draw this inference because it does not seem reasonable that, under prevailing conditions, some faculty members performing at a satisfactory level would receive a salary increase of less than the growth in the CPI. Alternative explanations (for which we have no evidence) are that: (a) there was an unspoken policy to reduce the purchasing power of the salaries of selected faculty members for reasons other than merit, or (b) the salary levels of some highly paid faculty members were judged to be inequitably high in relation to merit, and a low percentage increase was therefore awarded to bring them more in line with their merit ratings.
By contrast, the vast majority of full professors of all schools/areas received cumulative salary increments that exceeded growth in the CPI (Phil.) over the six years from 1993 though 1999. On this indicator, 8 of 13 schools/areas awarded cumulative salary increases exceeding growth in the CPI to 100% of its continuing full professors, while only the social science area of SAS was below 90%. The high percentages for most schools/areas indicate that only a small minority of full professors have fallen behind growth in the CPI over the most recent seven year period. Nonetheless, the relatively low percentage (87%) seen in the social sciences area is cause for concern.
SCESF recognizes that there are legitimate reasons for individual faculty members to be awarded increments less that the growth in the CPI. For example, in a particular year, the salary increment pool may only approximate, or even be less than, the rate of growth in the CPI. Furthermore, in a small department or school, a few promotions or market adjustments needed to retain a valued faculty member could obligate a disproportionate share of an existing increment pool, thereby leaving little to award to other faculty members in the unit. Finally, some faculty members may be sufficiently lacking in merit to justify an increment exceeding the CPI growth. However, when a salary increment pool is available well in excess of CPI growth (as it has been in recent years), it is difficult to imagine that circumstances such as these would limit salary increments to less than CPI growth for more than 10% of the faculty in a school/area. It therefore seems possible that the cumulative salary increments received by some of the full professors in the social science area have been inequitably low, at least in part.
B. Comparisons with Peer Universities Using MIT Survey Data
The best available salary data from other institutions of higher education are provided by the MIT annual survey of an elite group of approximately 25 private and public research universities (the sample size varies somewhat from year to year). The sample includes major private universities, as well as a number of highly regarded public research universities and one or two colleges. For 1997-98 salary data (the most recent available), the MIT sample included 24 institutions: the California Institute of Technology, Carnegie-Mellon, Columbia, Cornell, Georgia Institute of Technology, Harvard, Massachusetts Institute of Technology, Princeton, Purdue, Rice, Stanford, California (Berkeley), California (Los Angeles), California (San Diego), California (Santa Barbara), Illinois, Michigan, North Carolina, Pennsylvania, Rochester, Texas, Wisconsin, Williams College, and Yale.
In short, the MIT sample includes most public and private universities that Penn can consider to be peers. Mean faculty salaries by rank (professor, associate professor, assistant professor) and discipline have been made available to the SCESF as of the Fall Semesters for the years 1982 through 1997. These salary data are reported for the following disciplinary areas:
- Science (at Penn, represented by SAS departments)
- Humanities and Social Sciences (at Penn, represented by SAS departments)
- Engineering (at Penn, represented by SEAS)
- Architecture (at Penn, represented by GSFA [footnote 7])
- Management (at Penn, represented by Wharton)
The most meaningful comparisons of Penn faculty salaries with those at other institutions in the sample are broken out by academic field and rank. However, as a broad overall generalization, it is fair to conclude that Penn's mean faculty salaries as of the Fall 1997 (for the four schools included in this analysis as weighted by faculty size) were well above average in the MIT sample. By rank, full professor salaries were at the 68th percentile; associate professor salaries were at the 70th percentile, and assistant professor salaries were at the 54th percentile. Thus, Penn faculty salaries (for the four schools included) in comparison with a substantial group of research universities are certainly at a competitive level. However, there is clearly room for improvement in Penn's competitive position because salaries in some categories have lagged behind the 70th percentile level, especially assistant professor salaries.
Percentile Ranks of mean salary levels of Penn faculty members by five academic fields in comparison with selected public and private research universities as of the Fall Terms 1986, 1991, 1996, and 1997
Percentile Ranks by Year # Institutions Sampled 97-98 Academic Fields 86-87 91-92 96-97 97-98 Full Professor Sciences 60 54 63 60 24 Soc Sci/Human 73 58 71 69 24 Engineering 64 55 59 66 22 Architecture 68 81 75 74 17 Management 68 63 76 75 18 Weighted Mean
68 58 69 68 24 Associate Professor
Sciences 27 46 67 52 24 Soc Sci/Human 56 70 79 81 24 Engineering 69 55 67 75 22 Architecture 72 79 --- --- 17 Management 73 58 66 64 18 Weighted Mean
57 61 72 70 24 Assistant Professor
Sciences 15 34 63 69 24 Soc Sci/Human 48 50 60 44 24 Engineering 69 55 33 40 22 Architecture - 28 32 30 17 Management 93 53 55 64 18 Weighted Mean
56 49 57 54 24 NOTE: Salary percentile ranks pertain to the mean academic base salary levels of Penn standing faculty members from the Sciences (of SAS) and Social Sciences and Humanities (of SAS), and the Schools of Engineering and Applied Science (for engineering), Graduate Fine Arts (for architecture), and Wharton (for management). Percentile ranks are reported only if the number of faculty members is four or more.
Data source: MIT Salary Survey.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
In our 1998 report, SCESF provided information about salary levels for each academic field included in the MIT survey for the most recent year for which data were available (Fall 1996). This information is now updated for Fall 1997 in Table 4. In addition, comparable data are shown in Table 4 for every five years since 1986-87. Some of the major trends seen in Table 4 are as follows:
- There has been remarkable consistency over the 16-year period in the competitive level (about the 70th percentile) of full professor salaries, with both the Graduate School of Fine Arts and Wharton showing moderate gains. Only salaries in the natural science departments of the School of Arts and Sciences have lagged behind noticeably.
- As with full professors, average salaries of Penn's associate professors were competitive at about the 70th percentile level by the Fall of 1997. Salaries in both areas of Penn's School of Arts and Sciences (the natural sciences, and the social sciences/humanities combined) became considerably more competitive during the past 16 years, though the competitiveness of salaries in the natural sciences still lag well behind those in Penn's other academic fields included in the MIT survey.
- By contrast, the competitiveness of average salaries of assistant professors in the natural sciences have increased dramatically during the past 16 years (from the 27th to the 69th percentiles), surpassing those in the social sciences/humanities which have lagged behind at about the 50th percentile level. The competitiveness of assistant professor salaries in Engineering and Applied Science has declined to below the 50th percentile, while such salaries in the Graduate School of Fine Arts have remained even lower at the 30th percentile level. Overall, assistant professor salaries in five academic fields combined have remained well below the 60th percentile--a level much less than that of Penn's full and associate professors.
Of greatest interest and concern, therefore, is the current competitiveness of Penn faculty salaries by rank and academic field included in the MIT survey. [footnote 8] In sum, while none of Penn's four schools ranked first or second within its relevant academic field in the survey sample, none of Penn's Schools ranked below the average of the other institutions except at the assistant professor level. Though the percentile ranks seen in Table 4 provide important information about the competitiveness of Penn's faculty salaries by rank within five academic fields, these data do not reveal how far Penn is behind the most competitive universities. To gain perspective on this issue, the percentage difference between a mean faculty salary at Penn and the mean faculty salary at the university ranked second in the MIT survey was computed. The results are shown in Table 5 in terms of the percentage that a mean Penn salary that would have to be increased to attain the level established by the university ranked second within each rank and academic field.
Percentage differencesa between mean salary levels of Penn faculty members and the mean faculty salary levels in rank order number two at comparison universities included in the MIT Salary Survey: Percentage differences (a) presented by professorial rank for five academic fields as of the Fall Term 1997
Percentage Salary Level Ranked Two was Higher Than Penn Salary Level (a) # Institutions Sampled Academic Fields Full Associate Assistant Sciences 17.7% 15.4% 10.9% 24
Soc Sci/Human 7.4% 12.2% 16.5% 24
Engineering 8.9% 5.6% 12.8% 22
Architecture 6.1% --- 28.2% 17
Management 11.2% 14.1% 5.9% 18
Weighted Mean
10.8% 12.3% 12.0% 24
NOTE: Salary percentage differences pertain to academic base salary levels of Penn standing faculty members from the Sciences (of SAS) and Social Sciences and Humanities (of SAS), and the Schools of Engineering and Applied Science (for engineering), Graduate Fine Arts (for architecture), and Wharton (for management). Percentile ranks are reported only if the number of faculty members is four or more. Data source: MIT Salary Survey.
(a) In all comparisons by rank by field, a mean Penn salary level was lower than the relevant contrasting salary level ranked number two. The monetary difference between such salary levels was computed as a percentage of the mean Penn salary level. This percentage difference gives the percentage increment that would be required to increase a mean Penn salary level to rank order number two in the comparison group of institutions surveyed.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
As seen in Table 5 with respect to the weighted means, the salary levels of institutions ranked second in the MIT survey are about 11-12% higher than Penn salary levels for each of the three ranks. In contrast with the percentile rankings of Table 4 which show Penn assistant professor salaries to be less competitive than salaries of its full and associate professors, the data of Table 5 provide an additional perspective. They show that assistant professor salaries are as competitive as full and associate professor salaries in terms of how far they lag behind the mean salary ranked second. Both these perspectives are valid. The implication is that the mean salaries of assistant professors from institutions included in the MIT survey are more tightly bunched than the mean salaries of full and associate professors. [footnote 9]
Nonetheless, the data of Table 5 show that some Penn salary levels are far from competitive within their respective sectors (e.g., full professor salaries in the natural sciences and assistant professor salaries in architecture as represented by Penn's Graduate School of Fine Arts). On the other hand, salary levels for Penn's full professors in architecture, associate professors in engineering, and assistant professors in management (as represented by Penn's Wharton School) are not far behind those established by universities ranked second. Overall, Penn's faculty salaries are fairly competitive with the best paying universities but there is considerable room for improvement, particularly in several fields.
If we assume that the competitiveness of Penn faculty salaries in the five academic fields included in the MIT survey is representative of the competitiveness of all Penn faculty salaries [footnote 10], we have computed that a gap of about 11% (or 10 million dollars) separates the average faculty salary within all academic fields from the number two salary ranking nationwide. To place this 11% (or 10 million dollars) gap in perspective, it represents an amount that is just over twice the 5.0% mean increase in salaries of Penn's continuing faculty members from 1997-98 to 1998-99.
As reviewed in the previous section, the compound cumulative faculty salary increases at Penn were over twice the growth in the national CPI from 1986 through 1998 (see Table 2). By contrast, the MIT data show no gain in the relative standing of Penn's average faculty salaries for full and assistant professors during the period 1986 through 1998, and some gain for associate professors (see Table 4). It seems clear that our peer universities in recent years have likewise increased faculty salaries well in excess of growth in the CPI. Therefore, the substantial increase in faculty salaries that has been attained at Penn during a recent 12-year period has been necessary just to maintain our generally favorable competitive position.
A major limitation of the MIT salary survey is that it does not provide salary data for seven of Penn's eleven schools. Since no such school-level data are now available from other sources, SCESF initiated a comparative study of mean salaries aggregated at the university level. The results are reported in the following section.
C. Comparisons with Peer Universities Using AAUP Survey Data
In the absence of salary data for seven of Penn's schools, a comparison of the mean salaries of all full professors at Penn was made with those at a small select group of research universities based on data published annually by the American Association of University Professors (AAUP) in the April/May issues of Academe. To make meaningful and fair comparisons of Penn salaries with those at other Universities, five criteria for selection of comparison universities were first defined: (a) be included in the Research I category of the Carnegie Classification System, (b) offer a broad array Ph.D. programs in arts and sciences disciplines, (c) include at least two of three major professional schools (law, business, engineering), (d) not include a school of agriculture, and (e) have a composite academic reputation rating greater than 4.0 (on a five point scale) [footnote 11] in a rating system reported by U.S. News and Report. The 17 research universities meeting all five of these criteria are identified in the first column of Table 6.
Full professor salary comparisons: Percentage differences in mean academic base salary levels of Penn full professors in comparison with salary levels of full professors at a sample of comparable research universities for Academic Years 1986-87, 1991-92, 1996-97, and 1997-98
Full Professor Salaries: Percentage Differences by Year
University [a] 1986-87
1991-92
1996-97
1997-98
Harvard 16.9% 14.7% 12.2% 11.7% Stanford 12.8% 7.6% 6.4% 6.1% Yale 6.7% 7.1% 4.7% 3.6% Chicago -0.3% 3.6% 1.6% 1.3% Pennsylvania $59.6K $80.4K $100.0K $104.6K MIT 4.7% 4.4% 0.1% -0.4% Columbia 3.2% 2.0% 1.2% -1.0% Northwestern -4.9% -1.6% -3.9% -3.1% Duke -3.7% -1.0% -4.2% -3.5% Carnegie-Mellon 0.8% -1.9% -8.9% -10.2% U.C. (Berkeley) 7.4% -2.9% -13.0% -11.4% UCLA 4.5% -5.0% -13.9% -11.5% Michigan -6.2% -8.8% -12.0% -12.1% Virginia -1.0% -12.1% -15.8% -13.1% N.C. (Chapel Hill) -10.7% -18.8% -17.8% -17.8% Texas (Austin) -16.6% -15.0% -20.4% -21.2% MN (Twin Cities) -15.8% -21.6% -25.2% -22.6% NOTE: Penn academic base mean salaries are based on standing faculty members at the rank of professor. Excluded are all members of the Faculty of Medicine and all standing faculty members who are appointed as Clinician Educators from four other schools that have such positions (Dental Medicine, Veterinary Medicine, Nursing, and Social Work).
Data source: AAUP Salary Surveys.
[a] Universities are ordered from highest to lowest mean salaries for full professors as of 1997-98. For each year reported, the difference between the Penn mean salary and the mean salary for a comparison university was computed as a percentage of the Penn salary.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
The relative standings of mean salaries of Penn full professors are presented in Table 6 for the same four years used in Table 4 to report MIT salary survey data. The order of listing of universities in Table 6 was determined by the magnitude of mean salaries of full professors (from high to low) for the most recent year for which data have been published (academic year 1997-98). Next, the difference between a comparison university's mean salary and Penn's mean salary was computed as a percentage of Penn's mean salary. For example as seen in Table 6, the mean salary of Harvard full professors in 1986-87 was 16.9% higher than Penn's mean salary that year ($59,600), while the mean salary at Northwestern was 4.9% below Penn's mean salary.
The data of Table 6 show that the mean salaries for full professors at Penn gradually became more competitive during a recent 12-year period. For example, seven universities provided mean salaries more that 2% higher than Penn in 1986-87, while the mean salaries at only three universities (Harvard, Stanford, and Yale) exceed Penn by more than 2% in 1997-98. In addition, the percentage advantage of salaries at Harvard, Stanford, and Yale over Penn decreased substantially during this period of time.
Based on the data of Table 6, it is clear that mean salaries of full professors at Penn, on the average, have become much more competitive with the very highest salaries elsewhere during the past 12 years, and are now at a level among the top few universities in the nation (and probably in the world, for that matter). [footnote 12] Though Penn's competitive position in this respect is strong in general, aggregated salary data such as these do not reveal which schools, and departments within schools, may pay mean salaries that are particularly competitive or that may lag behind their competition. Therefore, SCESF is seeking comparative salary data that is specific to each of Penn's schools that are not included in the MIT sample.
Even though SCESF was careful to select universities for overall mean salary comparisons that were similar to Penn on several important criteria and made comparisons separately for each academic rank, AAUP salary data did not permit the SCESF to control for the specific schools sponsored by each university and the number of full professors appointed to each school. Such controls are desirable because mean salary levels vary by school, as do the number of professors appointed to the faculty of each school on which the means are based. Nonetheless, the 1997-98 salary data for full professors from the AAUP survey (of Table 6) appear to be reasonably consistent with the salary data for full professors from the MIT survey (of Table 4), and are therefore sufficiently valid to include in this report. In addition, tables similar to that of Table 6 (for full professors) were constructed for associate and assistant professors. They show that salary data from the AAUP survey are not reasonably consistent with data from the MIT survey of Table 4. Therefore, no comparative salary data from AAUP surveys are presented for associate and assistant professors.
IV. Penn Faculty Benefits: External Comparisons Using AAUP Data
For the first time in recent years, SCESF has examined comparative faculty benefits data, as well as salary data (the sum of salary and benefits is termed compensation). The mean salary data for full professors shown in Table 6 for 1997-98 are reproduced in the first column of Table 7, and shown alongside mean benefits data in the second column and compensation in the third. The same type of analysis is reported in Table 7 as in Table 6. Specifically, the degree to which salary, benefits, and compensation at comparison universities differ from Penn is reported in percentage terms. For example, the mean salary at Harvard was 11.7% higher than at Penn, while the mean benefits at Harvard was 13.5% lower than at Penn (i.e., Harvard's benefits percentage of 21.6 is 13.5% below Penn's benefits percentage of 24.9). As a result of Harvard offering a lower benefits percentage than Penn, Harvard's mean compensation for full professors was only 8.7% higher than Penn's compensation (while Harvard's salary was 11.7% higher).
Full professor compensation comparisons: Percentage differences in (a) mean academic base salary levels, (b) mean employee benefits percentages received, and (c) mean compensation levels of Penn full professors in comparison with full professors at comparable research universities for Academic Year 1997-98
University [a] Full Professor Compensation: Percentage Differences for 1997-98
Mean Salary
Mean Benefits
Mean Compensation
Harvard 11.7% -13.5% 8.7% Stanford 6.1% -25.0% 0.8% Yale 3.6% -19.5% -0.4% Chicago 1.3% -19.9% -2.7% Pennsylvania $104.6K 24.9% $130.6K MIT -0.4% -3.1% -1.0% Columbia -1.0% -14.2% -3.8% Northwestern -3.1% -17.5% -6.4% Duke -3.5% -5.1% -4.5% Carnegie-Mellon -10.2% -24.2% -14.5% U.C. (Berkeley) -11.4% 7.6% -10.0% UCLA -11.5% 8.2% -10.0% Michigan -12.1% -15.9% -14.9% Virginia -13.1% -17.2% -16.1% N.C. (Chapel Hill) -17.8% -27.0% -22.2% Texas (Austin) -21.2% -26.3% -25.3% MN (Twin Cities) -22.6% 5.3% -21.7% NOTE: Compensation is defined as the sum of salary and employee benefits received, while employee benefits are computed as a percentage of salary. Penn compensation data are based on standing faculty members at the rank of professor. Excluded are all members of the Faculty of Medicine and all standing faculty members who are appointed as Clinician Educators from four other schools that have such positions (Dental Medicine, Veterinary Medicine, Nursing, and Social Work).
Data source: AAUP Salary Survey.
[a] Universities are ordered from highest to lowest mean salaries for full professors as of 1997-98. The difference between the Penn mean salary and the mean salary for a comparison university was computed as a percentage of the Penn salary. The differences between Penn mean employee benefits percentages received, and Penn mean compensation levels were likewise computed.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
Thus as shown in Table 7, the level of compensation Penn provides for its full professors is greater than, or equivalent to, that at all comparison universities except Harvard. Considered in this light, the economic status of full professors at Penn is very good, and, we suspect, the economic status of associate and assistant professors is not far behind.
The SCESF is in the process of securing more detailed information about Penn's strong competitive position in faculty benefits. More specifically, we seek information about components of the benefits package to determine which ones, if any, are much more generous at Penn than at comparable universities. We hope to present a fuller analysis of faculty benefits in subsequent reports.
V. Penn Faculty Salaries: Internal Comparisons
As previous reports of the SCESF have highlighted, there is a great deal of inequality (e.g., variability) in faculty salaries at Penn attributable to several recognized factors: differences in individual merit, rank, time in rank, external labor market forces, the relative wealth of Schools, and perhaps differences among Schools in principles and practices for allocating salary increments.
One of SCESF's concerns has been that, among all the existing variability in faculty salaries, there might be some significant element of inequity (i.e., salary setting based on incomplete or inaccurate information about merit, or bias that could be involved in the process of deciding salary increments). However, it is not possible for the SCESF to pinpoint any instance of individual, or group, inequity without individual faculty salaries and associated information about individual merit, labor market forces, etc. What we can do is review many facets of salary variability and raise questions about the possibility that inequity might be responsible for some degree of the observed variability. These questions might lead to further review and action by senior academic administrators (Department Chairs, Deans, and the Provost) with a view to correcting any inequities that might be identified.
We turn next to a description and analysis of several dimensions of faculty salary variability at Penn. As with the external salary comparisons reviewed above, all salary data reviewed in this section exclude the School of Medicine and all standing faculty members who are appointed as Clinician Educators from four other schools that have such positions (Dental Medicine, Veterinary Medicine, Nursing, and Social Work).
A. Variability in Average Salary Increases by Rank and School/Area
As reported in Table 2, median faculty salary increments by rank for all of Penn's schools combined substantially exceeded the growth in the CPI for the most recent full year (FY 1998) for which data are available and exceeded Penn's budget guidelines in both FY 1998 and FY 1999. These salary increases are broken out by school in Table 8 where it can be seen that all Schools awarded median salary increases that exceed the budget guideline in all three professorial ranks for FY 1998. However, there was considerably more variability in median salary increases for FY 1999, also as shown in Table 8 along with the first and third quartiles (Q1 and Q3, respectively).
Median academic base salary percentage increases of continuing Penn standing faculty members by rank for FY 1998 and 1999, along with the first and third quartile salary increases for FY 1999 Median (Md.) [a], First Quartile (Q1), and Third Quartile (Q3) Percentage Salary Increases by Professorial Rank and Year
School/Area
Full
Associate
Assistant
97-98
98-99
97-98
98-99
97-98
98-99
Md. Md. Q1 Q3 Md. Md. Q1 Q3 Md. Md. Q1 Q3 All Schools 4.3 3.5 4.0 3.5 4.3 4.4 Annenberg 5.0 11.5 4.1 15.4 --- --- --- --- --- --- --- --- Dental Med 4.3 4.5 3.5 5.0 4.0 3.5 3.5 5.0 3.9 3.5 3.5 4.3 Eng & App Sci 4.6 3.6 2.5 4.5 4.3 4.0 3.7 5.6 5.2 4.5 4.0 5.0 Grad Ed 4.8 4.0 3.8 5.0 5.1 5.0 --- --- --- 5.0 --- --- Grad Fine Arts 4.1 3.0 3.0 5.0 --- --- --- --- 3.8 5.0 --- --- Hum. (A&S) 3.8 2.9 2.7 3.5 3.5 2.9 2.9 3.9 3.2 3.1 2.5 4.4 Law 4.3 5.7 3.5 9.0 7.0 8.6 --- --- Nat. Sci's (A&S) 3.3 2.9 2.0 4.0 4.4 3.6 2.3 5.4 4.2 4.5 3.8 5.3 Nursing 4.2 2.9 --- --- 4.4 3.1 2.1 4.2 3.4 2.6 --- --- Soc. Sci's (A&S) 4.0 3.0 2.5 3.8 3.7 3.0 2.5 4.7 3.3 3.1 2.9 4.4 Social Work 4.8 5.9 --- --- 4.0 3.5 --- --- 4.2 --- --- --- Vet Med 4.3 3.5 2.5 4.0 4.0 3.5 3.5 5.0 8.2 3.5 3.5 6.0 Wharton 5.0 4.1 3.5 8.0 4.9 4.1 2.5 10.2 6.8 9.1 4.3 10.9 Budget Guideline 3.5 3.5 3.5 3.5 3.5 3.5 NOTE 1: The Budget Guideline shown under each rank is for comparison purposes. As per Penn policy, it is a guideline for a salary increment pool for all standing faculty members in each school, but not specifically for each rank.
NOTE 2: Academic base salary percentage increases pertain to all Penn standing faculty members who continued in the same rank during the periods of time reported. Excluded were all members of the Faculty of Medicine, all Clinician Educators from four other schools (Dental Medicine, Veterinary Medicine, Nursing, and Social Work) that have such positions, and faculty members who were promoted or entered Penn employment during the years reported.
[a] A median (Md.) percentage salary increase is the mid-point of the increase within each school/area and rank (i.e., half of all increases were below the median and half were above). Variability of salary increase percentages is indicated by the first quartile (Q1) and third quartile (Q3) percentage increases. At the lower end of the salary increase percentages, 25% of all increases were below the Q1, while 75% were above. At the upper end, 75% of all increases were below the Q3, while 25% were above. Median increases are reported only if the number of faculty members is four or more. The quartile increases are reported only if the number of faculty members is ten or more.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
Before reviewing the salary increases for FY 1999, it should be recognized that the salary increase guideline of 3.5% is just that, a guideline, and pertains to an aggregate of all increases for all ranks combined for each of Penn's schools (i.e., merit increases for continuing faculty members, special increases for faculty members who have been promoted in rank, and market adjustments for faculty members with generous salary offers from other institutions). Schools may allocate more, or less, resources to faculty salary increments than the guideline, depending upon each school's financial circumstances (see Section II.B. above). Therefore, a comparison of the median increase awarded to faculty members of a particular rank and school with the salary guideline only gives an indication of the extent to which the guideline was implemented in that particular instance. Accordingly, a particular median increment of less than 3.5% should not be regarded as a specific failure of salary policy, since there is no policy for each rank and each school to be awarded at least that much on the average. Furthermore, the 3.5% guideline pertains to the mean increase, a measure of central tendency that is usually higher than the median salary increases shown in Table 2.
Nonetheless, the overall mean salary increase for all faculty members continuing in the same rank for FY 1999 was 5.0% (see Table 2), a number well above the guideline of 3.5%. Under this circumstance, the faculty should be able to expect, for the most part, that this substantial salary increase resource would be distributed sufficiently widely to lift the median salaries of all ranks in all schools/areas by at least the guideline amount.
In contrast with FY 1998, there was considerably more variability in median salary increases for the current year. With an overall salary increase mean of 5% and a guideline of 3.5% for FY 1999, we note from Table 8 that the median increase for full professors in 5 of 13 schools/areas was less than 3.5%, 3 of 10 schools/areas for associate professors, and 3 of 11 schools/areas for assistant professors.
The distribution of salary increase resources is shown much more clearly in the first and third quartile data of Table 8. It can be seen that none of the relatively low median increases (below 3.5%), as noted above by rank and school, were due to extremely high third quartile percentage increases (i.e., because unusually large increases were allocated to only 25% of faculty members in a rank/school group). Instead, it seems that the increases provided to faculty members in these particular schools/areas were generally low relative to the university-wide average. Therefore, the relatively low median increases are more a problem of inadequate resources than wide variation in the distribution of available salary increase resources.
We also note with concern that the median increases for all three ranks in the humanities and social sciences areas (of SAS) and the School of Nursing were below the 3.5% guideline. Again, the quartile data of Table 8 are helpful in revealing that both the first or third quartile raises did not diverge greatly from the median (i.e., the second quartile), thereby indicating that relatively low increases were common in these sectors of the University.
Overall as seen in Table 8, there is great variability for FY 1999 in salary increment percentages both among Schools within ranks, and among ranks within Schools. SCESF is not aware of specific information about merit and market factors that is available to department heads and deans, and how they weigh this information in deciding salary increments for individual faculty members. Without such information, it is not possible to determine whether any inequity is involved in the salary increase percentages reported in Table 8. Nonetheless, the greater variability of median salary increases in FY 1999, in comparison with the prior year, is sufficient to question about how well equity was served for many faculty members receiving the lowest percentage increases.
B. Variability in Average Salary Levels by Rank
Mean faculty salaries by rank are shown in Table 9 for all schools combined (except Medicine, of course). Such data give the crudest perspective on rank differences in salary, however, because of aggregation biases across schools. For example, one might expect a considerably larger difference between mean assistant and associate professor salaries. The modest difference might be accounted for by the facts that the Law School has no associate professors (a fact that might decrease the observed associate professor mean) and the Wharton School has a considerably higher percentage of assistant professors than is typical of other schools (a fact that could increase the observed assistant professor mean).
A more meaningful comparison of variation in faculty salaries by rank is made by computing the ratios for continuing faculty members for each school and then computing a mean weighted ratio (weighted for the number of continuing faculty members at each rank in each school). [footnote 13] The weighted ratios thus computed are also seen in Table 9. Viewed in this way, there is much greater spread in mean salary levels by rank.
Mean academic base salary levels of Penn standing faculty members by rank during FY 1999
Ratio to Asst. Prof.Salary Level
Rank
Mean Salary
Unweighted
Weighted
Full Professor $112,098 1.69 1.85 Associate Professor 74,129 1.12 1.27 Assistant Professor 66,438 1.00 1.00 NOTE: Mean academic base salary levels are based on all Penn standing faculty members who continued in the same rank from FY 1998 to FY 1999. Excluded were all members of the Faculty of Medicine, all Clinician Educators from -four other schools (Dental Medicine, Veterinary Medicine, Nursing, and Social Work) that have such positions, and faculty members who were promoted effective FY 1999.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
C. Variability in Average Salary Levels Within Ranks by School/Area
As reported by the SCESF last year by school, the mean salary of the best paid 20% of full professors was 72% higher than the mean salary of the lowest paid 20% of full professors. This 72% figure was based on the weighted mean of full professors from thirteen broad disciplinary areas--ten Schools (Annenberg, Dental, Education, Engineering, Fine Arts, Law, Nursing, Social Work, Veterinary Medicine and Wharton) and three disciplinary areas of SAS (humanities, natural sciences, and social sciences). We have monitored this index of variability of professorial salaries and found no substantial difference for FY 1999 (the mean salary of best paid 20% is now 74% higher than the mean of the 20% lowest paid). Similar to past years, the percentage by which the mean salary of the top 20% exceeds the mean salary of the bottom 20% ranges from a low of 38% for one school to a high of 104% for another. As reported by last year's SCESF, there continues to be considerable stability in these percentages (overall and by school) since FY 1993. For a fuller discussion of trends based on this indicator, the reader is referred SCESF's 1996-97 report (Almanac, May 13, 1997).
Given the stability over many years of this index of salary variability of full professors, SCESF plans to discontinue its computation in future years. Instead, information about salary variability within all three ranks by school will be discussed in terms of a statistical measure of variability termed the "interquartile range," a term that refers to the difference between the third and first quartiles of a distribution-in this case, the distributions of individual faculty salaries by rank and school. Though the index based on the difference between the mean of top and bottom 20% of salaries and the interquartile range are closely related, [footnote 14] use of the interquartile range is a more representative measure of variability. Furthermore, it is not affected by a few extremely high or low salaries that are included in the top or bottom 20% of a salary distribution.
Regardless of which measure of salary variability within ranks and schools is used, the fact remains that the amount of variability of individual faculty salary levels within a rank (such as full professors) differs greatly among schools/areas. For example, the interquartile range of salaries for full professors in one school/area is over three times that in another school/area. Since it is difficult to imagine that differences in faculty merit would vary that much among schools/areas, it suggests that other factors are partly responsible for wide school/area differences in this respect, such as differential market forces and different standards for setting salary levels and/or annual increases.
As with other indicators of salary variability, the wide differences between the salaries of the upper and lower 20% of full professors among schools/areas do not in themselves demonstrate inequity. However, it is possible that some of the gap between these two groups of professors is inequitable, and that the inequities become exacerbated over time as annual salary increment percentages are applied to the base salaries of these in the lowest 20% of professorial salaries.
Even if some inequity is entailed in wide differences in salary variability among Penn's various schools/areas, it is not clear whether the highest paid professors in schools with low variability are paid inequitably low given their merit, or whether the lowest paid professors in schools with high variability are paid inequitably low given their merit, or even some of both. More generally, a question can be raised about whether the apparent wide differences among schools/areas in standards for setting faculty salaries are fully justified, and, if not, whether the standards used in some schools/areas yield some inequity in the different salary levels of individual faculty members.
D. Variability in Professorial Salaries by Years of Service
Except for Annenberg, Graduate Fine Arts, and Social Work, sufficient information was available to SCESF to compute the ratio of the mean salaries of full professors appointed to a Penn faculty during the past 18 years (i.e., since 1981) to the mean salary of professors appointed before 1982. Ordinarily, it might be expected that this ratio would be less than 1.00, which would mean that more years of service at the rank of full professor at Penn is associated with higher salaries. However, in 7 of 10 schools/areas for which data are available, the more recently appointed professors have higher salaries on the average (in five of these seven schools/areas, over 10% higher). Professors in the Law School are the major exception, where the more recently appointed professors have average salaries 11% less that the those who have held appointments for 19 years or more.
While data such as these on a dimension of variability of faculty salaries do not demonstrate inequity, it is possible that more recently-appointed full professors in some schools/areas have been placed on a higher salary scale, and justifiable upward adjustments in scale have not been made in the salaries of many of the more senior professors. It is also possible that many of the more recently appointed professors have a number of years of experience at the full professor level at other universities prior to being appointed to a Penn Faculty. This is an empirical question that could be analyzed if more complete information were available about the total years of experience as full professor, both at Penn and elsewhere.
Variability of academic base salary levels among schools/areas [a]:
First, second, and third quartile median salary levels by rank for FY 1999
Quartiles: Median Salaries
# Areas Rank
Q1
Q2
Q3
Full Professor $92.5K $99.9K $114.6K 13 Associate Professor $63.1K $73.0K $77.9K 10 Assistant Professor $49.4K $52.1K $66.9K 12 NOTE: Median academic base salary levels for Penn's schools/areas are based on standing faculty members who continued in the same rank from FY 1998 to FY 1999. Excluded were all members of the Faculty of Medicine, all Clinician Educators from four other schools (Dental Medicine, Veterinary Medicine, Nursing, and Social Work) that have such positions, and faculty members who were promoted effective FY 1999.
[a] The thirteen schools/areas used for this analysis at the full professor level are the same as those listed in Table 3. The number of schools used at the associate and assistant professor levels was slightly less because the numbers of faculty members within these ranks was very low for a few schools. [b] Variability of median salary levels among schools/areas is reported by quartile. At the lower end of the median salary level distribution, 25% of all schools/areas were below the first quartile (Q1), while 75% were above. In the middle, 50% of the median salary levels of all schools/areas were below the second quartile (Q2, also called the median), while the other 50% were above. At the upper end, 75% of all median salary levels were below the third quartile (Q3), while 25% were above.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
E. Variability of Average Salary Levels by School/Area
As described in previous SCESF reports, there is considerable variability in average faculty salary levels across Penn's 13 schools/areas (as identified in Table 3). Information about the extent of this cross-school variability is presented by rank in Table 10 in terms of the first quartile (Q1), second quartile (Q2, the same as the median), and the third quartile (Q3) of median faculty salary levels. For full professors, the interquartile range of median salaries based on the 13 schools/areas was $22,100 (i.e., the difference between the third quartile salary of $114,600 and the first quartile salary of $92,500). The interquartile range of median salary levels was less for associate professors ($14,800) and assistant professors ($17,500).
Mean academic base salary of standing faculty members at PennÕs highest paying school as a percentage of the mean salary at the lowest paying school by rank and fiscal year
Fiscal Year
Rank FY 1996
FY 1997
FY 1998
FY 1999
Full Professor 154% 160% 158% 161% Associate Professor 147% 155% 165% 166% Assistant Professor 204% 208% 213% 213% NOTE: The percentages of this table were based on the mean academic base salary levels of all standing faculty members who continued in the same rank from one fiscal year to the next. These mean salary levels were available by rank for each of 11 schools at Penn. Excluded were all members of the Faculty of Medicine, all Clinician Educators from four other schools (Dental Medicine, Veterinary Medicine, Nursing, and Social Work) that have such positions, and faculty members who were promoted in any one fiscal year.
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
Given the considerable variability in median faculty salaries across schools/areas shown in Table 10, SCESF examined available data to determine whether the degree of variability has been stable or changing. For the most recent four year period, the Committee compared the mean salary of faculty members continuing in the same rank at the highest paid school with the mean salary of those at the lowest paid school. [footnote 15] The results of this analysis, as shown in Table 11, reveal that the mean salaries of both associate and assistant professors in the highest paying school gradually become larger than the mean in the lowest paying school from FY 1996 through FY 1998, and then stabilized for FY 1999. For full professors, there was a substantial increase in this difference from FY 1996 to FY 1997, followed by a period of relative stability at about 60% during the following two years. The difference in the highest and lowest mean salaries by school was much greater for assistant professors than for associate or full professors. Overall, for all three ranks, the difference between the highest and lowest median salaries by school increased substantially during the four year period from FY 1996 to FY 1999.
The trend toward greater disparity across schools in mean salary levels of continuing full, associate, and assistant professors, as seen in Table 11, has occurred because of differential annual salary increases in the following two respects:
1. In respect to the monetary difference in salary increases, a phenomenon illustrated by a fixed percentage salary increase from FY 1998 to FY 1999 (e.g., 5%) in the median salaries of full professors from two schools at quite different salary levels (e.g., the median salary for one school of $120,000, the median salary for other school at 75% of the first of $90,000, representing a difference of $30,000). The 5.0% raise results in an increase of $6,000 in the median salary for the first school and an increase of $4,500 for the second school. Though the difference between the two median salaries increases by $1,500 from $30,000 to $31,500, the resulting second median salary of $94,500 remains 75% of the first median salary which increased to $126,000.
2. In respect to the percentage difference in salary increases, a phenomenon illustrated by a substantial correlation [footnote 16] between the median percentage salary increase for full professors for FY 1999 with the median salary level in FY 1999 across Penn's 13 schools/areas. Moreover, this correlation of the amount of salary increase with median salary levels is a more general trend. The median percentage salary increase of full professors from FY 1993 though FY 1999 was correlated highly [footnote 17] with the median salary in FY 1999 across the 13 schools/areas. Thus, the escalation of average salary differences across schools/areas is a multi-year trend that has continued into the current year.
In short, these statistical facts indicate that, in general, differences in average faculty salaries between lower paying schools/areas and higher paying schools/areas have been, and continue to be, increasing both in dollar amount and in percentage difference. As noted in prior SCESF reports, variability among schools/areas is no doubt a product, to a great extent, of market forces in the hiring of faculty members and in the relative wealth of schools. [footnote 18] The relative wealth of schools is, in major part, a function of how much income a school is able to earn and the level of non-faculty expenditures it regards as essential-all as discussed above in the section on the RCBS.
Whether variability in faculty salary levels among schools/areas represents some degree of inequity is controversial. Some argue that it is, while others argue that it is a natural outcome of the wealth inherent in various disciplines and professional fields that schools represent. Any effort to reduce such variability substantially by central university policy would no doubt require fundamental changes in the RCBS--a system that has become well entrenched during the past three decades.
VI. Status of Committee Recommendations Submitted in 1997-98
The 1997-98 report of the SCESF included recommendations A through E. Short versions of these recommendations are presented below along with the responses of Interim Provost Wachter to whom the recommendations were made on May 21, 1998.
Recommendation A
1. At least to maintain Penn's current competitive level of faculty salaries.
Response: The Provost certainly accepted this recommendation.
2. To make substantial efforts to improve Penn's current competitive level of faculty salaries.
Response: The Provost partially accepted this recommendation. According to AAUP data, Penn faculty salaries are already very competitive, so the recommendation that Penn make substantial efforts to improve Penn's current competitive level. . . overstates the current situation in terms of the need to be competitive. However, if faculty salaries in certain fields begin to fall behind, there is concern about bringing them back to competitive level.
3. To seek, or compile, evidence about the competitiveness of faculty salaries at schools not included in the MIT survey.
Response: The Provost agreed to try to do this.
Recommendation B: To investigate further, by multiple means, possible inequities in individual faculty salaries.
Response: Agree to do this every five years, beginning with the last such inquiry in 1996. The Provost will also consider undertaking such an investigation more often than every five years and will look into it, though stated that a comprehensive investigation such as recommended should not be initiated every year.
Recommendation C: To establish a general principle for minimum (i.e., floor) annual faculty salary increments.
Response: Not accepted. The Provost observed that our average salary increments always exceed the CPI, so there is no need to establish such a general principle.
Recommendation D: To make efforts centrally to moderate some of the largest disparities in average faculty salaries among schools through the means of subvention allocation.
Response: Not accepted. The Provost stated that various strong pressures on subvention were forcing reconsideration of allocation principles, and, in addition, that SEC should consider further its recommended priorities in the use of subvention since multiple purposes have been advanced. Subvention decisions alone are not likely to correct the salary disparities among the Schools.
Recommendation E: To develop a comprehensive policy of faculty compensation (i.e., salary and benefits).
Response: Agreed to give this consideration on the next occasion of salary or benefits redesign. The Provost advised the SCESF to continue advocating this position because it is accepted in principle, but it is a timing question of when to proceed.
On the basis of these responses, the SCESF plans to follow up on these and other salary policy issues with the goals of improving Penn's competitive position in faculty salary levels with peer universities and of minimizing inequities that may exist in faculty salaries within Penn.
VII. Conclusions
A. Economic Status of the Faculty
1. External Competitiveness. In general, faculty salaries, benefits, and compensation (the sum of the two) at Penn are competitive with a small select group of universities that provide the highest levels of faculty compensation in the nation. Evidence for this conclusion comes from the following sources:
- The results of the annual MIT salary survey of about 25 major research universities place the weighted mean salaries of Penn full professors and associate professors (from SAS, SEAS, GSFA, and Wharton) at about the 70th percentile of their respective academic fields (see Table 4), while the weighted mean salaries of all three professorial ranks are 11-12% below the salary level ranked second in this survey (Table 5).
- The results of the annual AAUP salary survey for a group of 17 peer research universities place the mean salary of Penn full professors in rank order five as of academic year 1997-98. The highest mean salary in this group (at Harvard University) is 12% higher than the Penn mean (Table 6).
- Among this group of 17 peer research universities, Penn's employee benefits percentage for full professors is higher than that provided by all other nine private universities (Table 7).
- Among this group of 17 peer research universities, Penn's mean compensation (the sum of salary and benefits) for full professors is virtually tied for second place with that provided by Stanford University, and 9% below that of Harvard University, the institution providing the highest mean compensation (Table 7).
2. Internal Variability. There is great variability in the distribution of faculty salary resources among the three professorial ranks (see Table 9), among the eleven schools included in this report, and among individual faculty members by rank within schools. For example, salary increase resources for FY 1999 were distributed sufficiently widely that 93% of all standing faculty members received a salary increase exceeding growth in the consumer price index for the prior year (Table 3). In addition, the median salary increase for FY 1999, for each rank, approximated or exceeded the university guideline of 3.5% in 10 of Penn's 13 schools/areas (see Table 8).
Furthermore, a considerable portion of the variability in average faculty salaries across Penn's schools/areas is the product of market forces as evidenced by the roughly similar percentile rankings of each of the five schools/areas included in the MIT salary survey (see Table 4). That is, considerable variability in average faculty salaries among these schools/areas is required to maintain similar competitive standings within their separate academic fields.
B. Conditions of Concern
1. External Competitiveness. Although Penn faculty salaries are generally competitive with those provided by a select group of universities (as noted above), the following particular conditions are of concern about the external competitiveness of faculty salaries at Penn:
- As indicated above in Section VI (see Recommendation A.2), Penn is committed to bringing faculty salaries back to a competitive level "if faculty salaries in certain fields begin to fall behind." SCESF is concerned about two aspects of this commitment that are not clear, viz. the definitions of "a competitive level" and "certain fields." For academic fields for which specific competitive data are available from the MIT salary survey, it appears that Penn, at least in practice, has established a 70th percentile ranking as its competitive level (Table 4). If so, average faculty salaries at the full and associate professor ranks in the natural sciences area of the School of Arts and Sciences have clearly fallen behind, as have assistant professor salaries in three academic areas (architecture, engineering, and the social science/humanities areas of Arts and Sciences). Accordingly, there is concern about the average salaries in these areas that have fallen behind Penn's competitive level.
- SCESF is also concerned about the absence of data to make a judgment about the competitive level of average faculty salaries in each of the Penn's seven schools that are not included in the MIT salary survey. While available salary data suggest that average faculty salary levels in these seven schools, as a group, are competitive, it is possible that faculty salaries in one or more of these schools may have lagged behind Penn's general competitive level. As indicated also in section VI (see Recommendation A.3), the Provost is trying to secure comparative salary data for the seven schools in question.
2. Internal Equity. In the absence of data on individual faculty merit to compare with data on individual faculty salaries, SCESF is not able to identify any specific instance of inequity among all the dimensions of salary variability included in this report. However, there is concern that some of the wide variability in individual faculty salaries may entail more than a trivial element of inequity. Though we are not able to report specific instances of salary inequity among individual faculty members, ranks, departments, or schools, SCESF has identified the following conditions that give rise to equity concerns:
- In spite of low inflation in FY 1998 (CPI growth in Philadelphia of 1.14%) and substantial resources available for faculty salary increases (3.77% for the school providing the lowest average salary increase), 7% of Penn's standing faculty members received less than the CPI growth percentage--an effective reduction in salary (Table 3). Over 10% of faculty members in four schools/areas received increases less than the CPI growth percentage. Two alternative explanations for these percentages are: that over 10% of the faculty in these schools/areas performed at an unsatisfactory level, or that some of these effective salary reductions may have been inequitable.
- In spite of modest inflation since FY 1993 and substantial resources for faculty salary increases, only 87% of full professors in the social sciences area of the School of Arts and Sciences received cumulative salary increases during the period 1993-99 that exceeded the growth in the Philadelphia CPI (see Table 3). By comparison, at least 93% of full professors in other schools/areas received cumulative salary increases that exceeded CPI growth during this seven year period. Therefore, it seems possible that some of the effective salary reductions experienced by full professors in the social sciences area were inequitable.
- Aggregate salary increases of 5.0% were awarded for FY 1999 to continuing Penn standing faculty members. Nonetheless, the median increases for all three ranks in the humanities and social sciences areas (of SAS) and the School of Nursing were below the 3.5% guideline. There is concern about salaries of most faculty members in these areas lagging behind a competitive level in these areas with implications for collective inequity.
- There is, of course, considerable variability in individual faculty salary levels within ranks in each school/area. However, the amount of variability of such salary levels differs greatly across schools/areas. The implications of this fact, if any, for salary equity are not clear, but are of concern, at least until this phenomenon is better understood.
- In 7 of 10 schools/areas for which data are available, the average salary of full professors with less than 19 years of service in rank at Penn is higher than that of full professors with more than 18 years of service. There is concern that this phenomenon may reflect widespread inequity between those who have been recruited to Penn recently (perhaps including those who have been promoted to the rank of full professor recently) and those who have served at Penn for many years. The fact is that new faculty members can only be attracted if they are compensated at the current market salary in their academic field. On the other hand, there is reason to fear that, because of the relatively small percentage salary increases that faculty members have received in past years, the salaries of some of the continuing faculty members with many years of service at Penn have been allowed to fall behind the market. Of course, that may not be a problem for continuing faculty members who have been able to "test the market" by securing outside offers. There are, however, many continuing faculty whose academic achievements would have been better rewarded if they had tested the market, but who have chosen not to do so for reasons of loyalty or immobility.
- There are substantial differences across Penn's 13 schools/areas in median faculty salaries by rank. While much of these differences is necessitated by competitive market forces, there is general concern that such differences be only as large as required for Penn to remain competitive in recruiting and retaining distinguished faculty members in each school/area. Of specific concern is the current trend toward even greater differences in median faculty salary levels across Penn's schools/areas.
- Members of the Senate Committee on the Economic Status of the Faculty
- Jane Barnsteiner, Professor of Nursing
- Peter Cappelli, Professor of Management
- Peter Conn, Professor of English, Ex-Officio, Chair-Elect, Faculty Senate
- Erling E. Boe, Professor of Education, Committee Chair
- Richard E. Kihlstrom, Professor of Finance
- John C. Keene, Professor of City and Regional Planning, Ex-Officio, Chair, Faculty Senate
- Rebecca Maynard, University Trustee, Professor of Education
- Vivian C. Seltzer, Professor of Human Development and Behavior, Ex-Officio, Past Chair, Faculty Senate
- Bruce J. Shenker, Professor of Pathology
- Peter Cappelli, Professor of Management
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
Appendix B(reprinted from Almanac April 28, 1998) OF RECORD
Salary Guidelines for 1998-99The principle guiding our salary planning for fiscal year 1999 is to pay faculty and staff competitively, in relationship to the markets for their positions and prevailing economic conditions, including an inflation rate below two percent. Salary increases should acknowledge the valuable contributions of faculty and staff to the University, and should help Penn remain a strong and financially viable institution. With this in mind, the following guidelines are recommended. Faculty Increase GuidelinesAlthough individual faculty decisions are made at the school level, with Deans issuing to Department Chairs their own guidelines regarding available resources, certain standards have been established to which we ask all Deans to adhere:
The Provost will review the Deans' faculty salary recommendations prior to their release to insure that raises on average reflect market conditions in each discipline. Staff Increase GuidelinesThe University recently completed the Classification Redesign Project, implementing the project's recommendations on April 1, 1998. The salary structure has been realigned to reflect the competitive labor market in which the University competes for its staff. All departments have received the results of the classification study and copies of the new salary structure. The following guidelines should be followed when making staff salary increase decisions for the next fiscal year:
Salary decisions are among the most important that we make. We believe this year's salary guidelines will reward staff for their contributions to the overall accomplishment of the University's mission while helping it to remain a strong and financially viable institution.
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| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
Footnotes1 In addition, designated funds also provide the basis for salaries of standing faculty members appointed to endowed positions. Furthermore, the financial base for faculty salaries in the School of Medicine is so different that they are routinely excluded from SCESF's annual reports. 2 Included here are the wide array of faculty members appointed to various ranks in the standing faculty, associated faculty, and academic support staff, all as described in Penn's Handbook for Faculty and Academic Administrators. 3 In defining this range, the three schools receiving grants from the Commonwealth of Pennsylvania (Medicine, Veterinary Medicine, Dental Medicine) have been excluded. 4 For detailed information about long term trends in academic salaries generally, see the introductory sections of "The Annual Report on the Economic Status of the Profession, 1997-98", Academe: Bulletin of the American Association of University Professors, 1998, 84, 2 (March-April), pp. 11-106. 5 In making this observation, we realize that the centrally-recommended guideline of 3.5% for FY 1999 salary increments was stated as a maximum. Depending upon a schools's financial condition, a lower pool percentage could be awarded. In any event, all funds for annual salary increases must come from each school's operating budget. There is no central fund earmarked specifically for this purpose. 6 See Section II.B. above on "How Salary Increment Decisions Are Made." 7 GSFA also includes Departments of City and Regional Planning, Landscape Architecture and Regional Planning, and Fine Arts. 8 The percentile rankings of Table 4 show a noticeable decline from Fall 1996 to Fall 1997. However, this is an artifact of a change in the sample. Two institutions (University of Minnesota and Amherst College) with average salary levels well below Penn's dropped out of the survey for Fall 1997, thereby accounting for a 1-3 percentile reduction from Fall 1996 in Penn's percentile rankings. 9 In more precise statistical terms, the coefficient of variation (i.e., the ratio of the standard deviation to the mean) of assistant professor salaries is lower in the MIT assistant professor category than it is in the full and associate professor categories. 10 This assumption is reasonable because the five academic fields at Penn included in the MIT survey account for 74% of all Penn full professors, 67% of all associate professors, and 67% of all assistant professors. In addition, the mean salaries of Penn's full and associate professors not included in the MIT survey are very close to the mean salaries of those included in the survey. 11 A composite rating was constructed by computing the mean of three separate academic reputation ratings: a general rating, a mean rating of key Ph.D. programs, and a mean rating of key professional schools. 12 Of universities not included in our comparison group, only Princeton and the California Institute of Technology provided mean salaries for full professors in 1997-98 that were higher than Penn's (about 5% higher in the case of both Princeton and CIT). 13 Weighted ratios were based on all Schools except Annenberg which has only one assistant professor. Law was not included in the associate professor ratio since none of its faculty members are appointed at this rank. 14 In more precise statistical terms, the coefficient of correlation (r) was 0.75 for FY 1999 salary data. 15 In this section, average faculty salaries are sometimes presented as medians and at other times as means. This is due to the differential availability of the two different indices of average salaries for the various periods of time examined. 16 The coefficient of correlation (r) was 0.51. 17 The coefficient of correlation (r) was 0.62. 18 With respect to market forces, note again the percentile rankings of average salaries by academic field and rank of Table 4. Though average salary levels differed considerably among the four schools represented in this table (Arts and Sciences, Engineering and Applied Science, Graduate Fine Arts, and Wharton), the percentile rankings of their salary levels in their respective fields are roughly comparable-thereby indicating that different average salaries among Penn's schools are required to achieve comparable levels of competitiveness with those offered in the same academic fields by peer universities. |
| CONTENTS | APPENDIX A | APPENDIX B | Table 1 | Table 2 | Table 3 | Table 4 | Table 5 | Table 6 | Table 7 | Table 8 | Table 9 | Table 10 | Table 11 |
Almanac, Vol. 45, No. 32, May 11, 1999