I

UNlTED STATES DEPARTMENT OF EDUCATION Studeft FnanciaI Assistanca

SdlodI a.nneI/c..e .... lIIg8IliII1I & ~ Cae ManagemenI TeIn. SouIwwest-Sen FI'MCIICD Ta.n

50 UniIIiId ..... PIuII, SUb 261 San Francisco. CeIIomIe 94102-4987

Voat (415)556-t295 FAX: (415)437~

PROGRAM REVIEW REPORT PRCN 2003409m54

University of Phoenix, OPEID 020988 00 Site Visit of 811812003 - 812212003

PROGRAM REVIEW REPORT I PRCN 20D'0Z225t ~ ofPhoelllx" PhoenIx, Mzaaa Program ~.II1IfZOO3-1122fS)3

TABlE OF CONTENTS

1 INS1I1lITIONAL REVIEW DATA SHEET • 2

Z BAa(GROUHD____ _--5

2. f EnlIly ......................... _ .......................... _ ........... _ ...................... _ ........................... .5.. 2.2 1'nJgntnIa._._ ................. _ ...................................... _ ....... _ ....... _ ..................... _ ............ .5.. 2.3 ~ st.Jdants. ................................................ _ .................................................. 5. 2.4 GrofIIIIh 01 EntoIItnetrIa .. ~ ..... _ ........ _ ........... : .................... _ .............. _ ......... ..5

3 SCOPEOFREVIEW ______ -..;.- _. __ • __ .-8

.. DISCI..AI~__ . __ ..... ._. ____ 7

5 FINDINGS AND REQUIREIENTS_ "'!!-_. ___ . __ :T

6.1 Rectullereorr.,.,JSatfon S}Isf8In .................. - ............... - ............................................... Z 5.1.1 ~ HImQ~. UOfI PRmses S\lbtWdIII ~1AIion _ ••• ____ 1 5.1.2 UOP SIudd RIIcr\IIJng SyQem .. FGaa on the Numberw. ____ ...... __ . __ ..... a

6.' 2.1 s... Tf1IIInng - "'Smoke .. Mtn:n'" __ • ___ .. _ ._ ..... ___ ....... 8 5.'.2.2 T~ ~ SaIeo;.nd s.Iea ~man(,. __ ._. _.11 5.1.2.3 ~ .eaive Sales MaIfor.Iban sy,tem _ __ • _ .. _ • _____ 12 5.12 " b6,Ikktu, T~_ - ______ .. ___ .... _____ .15

5 U ReaurW Evl!IuaiIan ~ Rel ..... & Ranb .... ~ .. _ .. ___ 11 5.1.4 SaIarteIIV:Jw/Iy Baeed on au.!Itty at RIIc:ru!tIrtg AcI'IrtIee __ ... __ ........ _-..... 20

5.2 lJonu$ Intc8nIiY&s Awarded on 88Ss d ~ n SBcu/Ing Enrolments and CJuaf*Iy d Rec:ruItIg ~ .. _._ .... _ .. _ .. __ ................................. _ .................... 22 5.2.1 Spd1g QuIt T.1w.Irds ____ "_ .. __ .. ___ ._._ .... _. ___ .. _ . _ ... 22 5.2 2 PdEies. GIIIa ... BanuIes ~. _ • _______ ._ ._._ • __ ."" ... _ • ___ 23

5.3 1latnItictIIIon I ~ 01 S)I3tBtn it f"t8cIjoe __ ... .... ... ....... . __ ...... .... ......................... 24 5.3.1 PNMure II) EmlIIlkIquared Students __ .. _. __ • _ __ ........ __ .•. 24 53.2 Foc:a.. on 0btIIInIng Credllilor e. ... , ...... Not ~"EdJC8bon _ ....... ___ ._ 24 5.3.3 ~ .. alTJIIaIV FLn2s as SeIsI Tad I CuIln ot~ _ _ . ___ ._ 25

5.4 ~ UOP ViOMIed InoenIiIIfI ~ P.mNbIIIott$ and 8t&eched b FIiducIery Duty ...................................... _ ................ __ ............. _ ................. _ ....... .25 5.4.t ~PracIces "'......,nePnr-II ... ----- ___ . _ .. _ .... _25 5.4.2 eov.- Up Durfng ~ • • ..... __ ._. _______ • _.,,_ .: ....... 2IS

• REfEREHCES_._. ____ ._u __ .-; ______ . ____ --ZI 7 ~ ___________ _ ________ • _____ ...;30 ...

AppendIx It: u.t of Rec:I16ra ldeiltified In AIport App.tdx B: Ustof~ for Whom ~ Recorda are to be ProvIded

Progi _ .. RevIew Report, PRCN 2OO34Ot22254 UnIwrsIy of PhoenIx. PhoenIx. Ari.wma Page 2

REVIEW DATA Sf£ET

SCOPE OF REVIEW:

'b)[BJ b)(6)

PJogr-.n ReYtew Report, PRCN 200340922254 Unlvenlty of Phoenix, Phoenix. Artmn. Pago3

PJOgIWR Rfttew RIIpcwt. PRCN 2OO34Ot22254 Un ... ......, Oil PhoenIx. Phoenk. AltDna Page 4

The ~ aIIo .... Aaved I:lnn. UOP 8':PC,-, dI_ • weI.,addtd_CUTWII"I~"'" do not ·wmt I'IM ~ I'I!M!IflIed for rear oIloct1g their JcbL

Sectioo <t87(a)(2D) of rille rv d .. ~ EducaIIon Ad 0( 1965. as amended (HEA). 20 U.S.c.. §1094{a)(20). prohIbtts the payment of Btrf ocmrrissioI:I. bonusor' oCher IncentMt payment based directly or indirecdy 00 succ:ess In securing el RIments.

2 BACKGROUND

2.1 Entity

The UnIwnIty of PhoenIx (UoP) was esfablstled In 1978 by John 5periJog 10 proyIde higher education bwoddng adutts. In 1981. Mr. Spedng nctxpcr.Md Apollo ~.Inc. (ApoIo). now Ihe parent cocpuealotl of The ~ 01 Phoer1bt. Inc. ApoDo~. Inc. operata& Ihrot.9lIts subsidlade .. The lJrw.sIy at Phoenix; InduIIt fDr PI of¥sblal ~menI; The Coftege for FNndaI PIaIlqlnstlluta CorpuiaUon; 8nd Wes1em tntema60naJ UnNetsi:Iy, Inc. As d August 31.2002. UOP aperaIed at 17610C3110115 In 37 states, Puef1D RJc:o and Canada. In Its 2002 Annual RepoIt, Apollo boasted Ih8t • was Ile Bgest prtya. pnMder of higher edllcalion In the UnIed States. kI. ..

In the ear1y 1990s. UOP issued an initial ptMc otfemg (IPO). Its debut on the pubic AJdc martel yielded an IniJsIon d over $34 milan In December 1994, and Apollo doubling Its 10IaI enroItnents between 1998 and 2002. lis svowth fueled Its stock prioa, resulIIng In • share of stock - priced at SO.72 at Ita IntIiaI pubic oframg (adjJstBd for stock spits) - soling at $63.38 by !he dose of Its 2003 ftscal year, August 31.2003.

In 0dDber 2000, Apollo issued another class of steck to tradt he eoonorric petfcnnance of Its online dMsion. UnIYer$Ity d PhoenIx Online (UOPX). UOPX 5toc:* InitIaIy sdng at $6.98 per share. sold for $64.50 per share as of Ihe dose of the 2003 fiscal year.

2.2 Profpnu

UOP ofter.i degree programs and related areas of speciaItzatJon, Induamg AssodaI8 01 Arts In General Studies, BacheJor of Sdenc:e ., Business, Sactaor 01 Science in cminaI Justice Adrninfsfraffon 8achefor 0( Sdance In Human SeMces, Badlalor d Science In HeaItI Cant 5ef\Iit:es and Bachelor of Sdenc:e In hlbmallon Techaogy. UOP also oCI'efs Master of Arts In Education, 0I'g:anIzati00a Management. BusIness Ad ... liAalon, CounaeIng and tUsing. It abo «rens oonItIuIng oducalotr for fIeachefs, aJStDm training for oolponlllOll5 and various CNtIIIcate pt'ogI ams.

In 1993. UOP began ononng dlstancB education (00 Uno prngams) and in 2001, UOP Wa$

act .... ID the Oepattment's Distance Educalon Oemonsttation Progtall aspilft d the second oahort d partIdpanIs. UOP refefs 10 its on Ina operation as tho On line Campus. The On tile ~ op8I1IIion Is located In PhoenIx, Mzoraa.

U Admission ~

1Iiab1caly, UOP required students 10 bbl23 years d age and have at least two years of pradIcaf WOft( uperienc8 and descJi)ed I1s rissiorl as the pnwision of acurent. ~ educaIona 10 'MlItdng adults.. As d appi<lOcin..-ly two years ago, hcwevar, UOP Iowwed 11\8 age requirement 10 21 and eImInafed U. wcrtc experiaIlaI raquiramanl

2.4 Growth 01 Enrollments & Rwenues

ApoIo'. toIaI degraed enroIImenIs in 1991 of 17,5111J8W to 200,100 In 2003. RawnJes grew ronespandV1gty, from $69 maon In 1991 to $1.3 bIIon In 2003. The On Une opeallun, uopx. began s\owty In 1993, but began nutloornklQ In 2000. on l.tte students Iunberad only 1,114 In 1993, but gew 10 79,400 by 2003. The toIIcMIng chart depIcIs the aW'Olmenl. IWeOOeS and sb* price hbtay of bo(h Apollo (APOl) and !he On LhlIracIdng stock. UOPX:

'r_I~ OnLN APOL UOP'X v .... Studenta ......... ... ~ S1odI$" StDdlt 1991 17.57 $ 68,112,000

1992 21,t6:l S 1111,88$,000 1DDl 24,~ 1114 S 97,.545,000 1894 ~,2OIl 1.80(1$ 12.0472.000 S (In 1985 36~ 2.4OIl S 163,429,000 I 2.113 1096 .e,93S 3,~ I 214,z15J1OO $ 7.5S ... 1997 51,382 4. $ 21i.195,.OOO $ 10.51 1008 71.4OCJ 7,201] S J84.877,ooo S 1522 lQ!J9 8B)JOC 10,100 $ 498.848.000 • 9..15 2000 100,900 18,001] S 6(»,997.000 $ 1S.U $ 11.18 2001 124,800 29,2O(l S 769,474,000 $ 26.25 S 21 .00 2D02 151~ 49.1!OCl S 1,009,455.000 S 41.83 , 2L18 2003 2OO.1oq 79.~ S 1,340,000.000 $ 63.30 S 64.50

• Stock price ~ for stock splits. Scuce; Annual Reports Anun ID SectIon 13 or 1S(d) of !he ~ ElIdIcw1ge kJ. 011934 (Form 1~ f!om 19961twuugh 2002.

ApoIo's past aggressive growth is maglilfied In its goals for !he fuUo. The UOP 2002 c:opcr.U goal was "'5-5-5"': FMt Years. FNa Milan Students Mel five Billion ~.

The dynamics of public ownership. expectations of Investors and IucratiYe stock options 10 UOP omcers era Integral aspeds of the UOP system. ~ at every level .... made awcn of the imporlallOG of meeting the enrolment numbens and nMnJe expectations ofWai S1rae1 on a quarterty basis. Fu rec::JUt!n of studeots. OOP s1rosses Ihe enrolment .,..,..... on • c:Wy, weeIdy, monthly Mod quar1efty basis. UOP 8"r.11t1a1e9 itS reauIet.s' pedormances and provtdes for uIoary 110 81!. foIowill91nifia1 f1!ICIUIIer InD*1g. '!With ..... aaIary~, Cbareafter' (at the end of ead1 tscaI year).' •

3 SCOPE Of REVIEW

A program revtew was cooducled of UOP on August 18, 200311Yough August 22. 2003 to d8tennN UOP'a CXWllpiallc:e will §487la)(20) oIlhe Higher Educatiorl /4D. of 1965. as •• ended. 20 U.S.c. §§10'f(1,.!!~ (HEA) and 34 C.F.R. §668.14(b)(22}. The review consisted 01, but was not ImIed 10. an examilation of UOP's policies and pmceclns reganIng

'UnlI t. 2DOO fIIcII Y_, UOP ~ lie IIIIiIIr1u. d"""'" ftWJ *INWIIIiI, ... ably m be ~ .~down __ "18 on t.~peob._ .... n..AdmIab.~PDIq c...-~orItb ..... ...., ~......,.,.. dora ........... ...... f1I..r.y. UOP'e Ad'IIIIIIbw Cal . d· PoIc:y

MlnUllleIIopnMcll"~ecllaDnm",,,,,,,-.y""'far""""'.IIIIIq"""'''''''i_ ...... nwrv.

admissJoos practices and rec:ruIten' oompensaIIon. The nMeMrs ~ lie per1i1el1t forms, policies and proc:edLns and peBOI.taI documentation at UOP reWng 10 1lde rv ad". "II allon, ald c:onduc:ted InteMews with appropriate InstiIuaonaI per1OMeI.

Prior to antvaI at OOP, noIIce d the progam review was pnMded by IeIephoIIe and fax.

The 0CHI8 nMew eI~ vIsfts to Ac:do 00IpCA_ heIIdquartIn. hi PhoenIx Can1Jus. .. 0nIne ~ as wei as IIYe ~ In UOP's Norhm CaIIfcmIa DIvi&Ion- 0aIdIwld. San Jose. San FI3Odsm, PIessatrbl and lJvennora

DwkIg"", armsrl nonaJIf1IlImce went ....... The fPIilg cI non<IIAlPiara ls ..... 1Ced to .. " ......, regdatioos. The ~ apeciIies hi actions 10 be taII8n by UOP 10 triIg operab_ ollhe ~ aid P'9al6in1o c::arplanD9 WIIh ~ auIhority.

4 DISCLAIMER

ThIs pn:vam nMew was Jocused and Ihorough wi1h regard 10 lie Issuas of oonoom. • camot be asswred to be~, The'absence of ~ in Ihe repat. OOIddlQ apedk: pracIJct6 end JWOCedlRS d UOP roost not lie construed as~ ~ or ~d lhasa spedfic prac:tica; and ~ Furthermore,' does not IeIew UOP dill obIgItion 10 CD1lIIY ~ III elite sfatuIofyor ~ provisions goverring lie Tille IV progiMIIS.

5 ANDINGS AND REQUIREMENTS

ANDING #1: Use of Incentive Compans_aon Baed on ~ for ThoM Involved In Recnaltlng cw Admtulon Activities In VlOIatioI\ of ntle rv Requlremenb

5..1 ReavIW Compensaflon Sysfam

5..1.1 When HIrIng Recrv .... UOP PronIIses SubsWItW Cclrnpeftqdon

The nrviewen IntsMewed mere thai 00 present and former AJCruIBrs d etudenIs (ailed -er roIment GOOnSdors" by UOP) prior CO, during and after Ile site... WhIe on .,1he retOOwets asked spedficaIy 10 speak to Itose hYdYed In erlll'Olllg students. both -on grcuId" as .... as "on h.· UOP amciaIs chose certain reauIters to be InI8Mewed. The revIeIMn abo, however, rar!domy chose other rec:rufters, aid InteMewed those referTad by oIher UOP eqIIoyees.

Most d the reauIters said that when hnd, UOP told 'them ChaI the Job had b~ Idou! tnandaI polenUaI, and Ihalllay -ccUd make _ let cI money.- UOP PQllised 10 doltJh or ...., !heir salary i'l1tr'ee 10 six mont. f by lllOCeSIfUIy pedorm .. dulles. f.fany cit. e .. ~ left a higIw payWJg Job to work for UOP because d the promise of Che Increase In salay In such a short period 0( .....

Drawn by !he lure 01 a large salary poIenIIaI, UOP ~ In other posISons lransfer 10 jobs as~. In partJajar •• nurrber'oI aeademic ~ and 8IMscts ."'Ied to ... higher paying remater position. Had Ihesa acaderic 8IMsots not ... 1IIfeIMd to _ racruJIng poosMon, they knew !hat their acNry woUd not only be lower. but that ....... salary ina8811!

woutI be "*"'naI. genefaIy odf 2-8%.

Progralti Rrnew RaporI, PRCN 2003409Z2254 Unlvlnly of PI1oen~ PhoInt.. AItmna Page 8

UOP's rec:ruhs soon find out Ihat UOP bases IheIr salaries solely on Ih8 runber d students lheyenrol.

5.1.2 UOP Student Recrultfna Sys1em - Focus on the Numbers

$.1.2.1 s.Ies r...",,-"'SmoIIe &.",.",...

UOP considers recrutIers to be "counselors i'I hInir'ISf or "fi'eshmen" for their first 13 weeks of ernpIoyrned.. OwIng "lime, 1hey receive CJrHhe.job IrBIr*1g at the location .. which they WOItt Soon lifter ~ hired, reaufters altend a oneoweek "Sales Atadefrrt" provided by regional and c:orpcnte malaagement at hi regional omce. The AdmIssIons Counselor PnIk:y Guida fo( AdrnIssbw .....,. and 0Vec:t.0r$ d Er.rolmerd~ IIfs 13 week-period b be I -devoIopIlleI'ItaI prt93l1l."' ~ learn the system for traddng leads, oontad5, appointments. enrolh1ants and other f8CI'\JiIing adIYfItea, .auch as the conversion d .. appoIntmenllD an 8ptlIcalbL Allhe SaIes.Academr, reI::ruJteB Ieem I8Ies tadics designed CO pIcpIlh8 InI«est of potential students through !he progIassion of ... aIIment activiIies. such as probing need, ~flO InJ'St. aedlg urgency ... OYercomilig objeclloll5. These I8Ies lessons arQ re.WJfon:ed by one-on-one InilrucIIon at the schoaIlocatIan. ReauItt1fs also rocelve .. ortelltjalio .. In the \.lOP meIhockIIogy and hIstory,learn about the programs of UOP and the UOP model of provIdhg educallonal programs for WOfIdng adults.

Reauit8Is are ortenIed to the personnel poIIdes d UOP and are provided an EnroIImont Counselor Policy GuIde. Updated annuaIy, the GUde details the recruter salaly teveIs, evaluation procedures, and ruleS pertairing to the aedlling of ennlllrnellis to reaullefs for pwposes of reau/ters' performance. The Guide for 2002 establishes the foIowing salary lewis:

Freshnwn AdrrissioIIS Counsetor AdmIssIcns Carlselor I (EO) Admlssious Counselor II (ECU) Admissions Coun:se/a (SenIor Ee ) ExecutIve AdmIssIons CoooseIor {Exec. Eel

526,000 - $36,000 $26,000 - $40,000 $38,000 - $65,000 $65,000·- $100,000 $75,000 - $120,000

EIther <bing, or shortly after. 1M int6a/ 13-week period, the new recrutter also at1ends a one week ~ Advisement Woritshos:f {SAW) at UOP heaIfqlJarteIs in Pboerix, Ariz:cna. The SAW Is an InIense hinlng on traditioIlBf Ales ted-riques: pobklg and deYoloplog the ~ a.tomefa need for .. product, aeaUng urgency and gaining CXJI'I'InItmer( fnxn the paCBnlIaI custorner, ... dosing the deal. Typical of sales 1rairW1Q, SAW .. one of"tho kJds UOP UfIeS to motivata Is sales force.. Reauilers said Chat ~ spite crt !he nama of !he traInirig. the SAW deals onty wilt! sales ~ and has little or ncIhing b do with acadeInicaIy advising students.

Freshmen f8CI'UilIIrs adv;n:e to the tiIIa of "ErwoIrrMri CotneIor r (Eet) upon con1pfetlon 01 IleIr 13-week daYllCfjiioentai pic.y dill L ~ 10 Eel rmy orIt be • change In job tille, but f the new reauIIer enrols enough students dtrllg Ile 13 weeks, Ihe advaIlCIII1lef11. -.0 Include a raise. Promotion to higher IINeIs is delDrnined on flo basis d wheIher the CXlU1SeIor -meets", .~ or -always BlU28ds" expectBDons'. Under- Ihe 2002 GuIde. In order to be promoIed 10 .. title d -Enrollment ecu.seIor II" (ECIf). a rucn.iIer must have ttvee couslslant

~ Undar .. 2003 Ad ........ a..-IDr GlMe, ... EO IIUIt ~ 8C:1CU'1d111d ...... _ quMn 01 0IIIIn or Con .W! lilt ...... EJcpediIi)lIl'" C8IInIlt '-11ft .......... Nt orwpilb ..... does _III .... "Meet EIIped_ •• :

quonn where perfom IalICe "often or coosIstenIy exmeds expedations.. Pron don to the tide d"'Senl'of Enrolment CounseIo(' (SeniorEC) raquIra& four ~ quarters where perbmance "often« c:onsIsIentIy exceeds expedaIIons: A SenIor EC may be p omclaf to Ihe _ of '&ecuIve EJItOImenl CcxnseIor" by haYIng eight COl ...... quartets where peIfonnancB often or corisIstantfy exceeds eJCpedatioIlS.

Earty In a recmws 1raInInQ. UOP leaches a racniIer how UOP meaues success ttvough lie use of • -matrix.. The maIrix Ists specI'IC ~ adfvIIIes, Ihe runbers Olq)eded for each adIYIy, and how lhasa numbers !'eta.., 10 an 0\I'InII radng cI eIIhef -meet! expedatfOls;-otten 8IIceeds eJqlIeCIatbW: or -atways IDaIedI upeda!Ions" - a raIIrlg that deb!nrines fi8Iary. Freshmen rec:ruIers IeCIIve a matrb: for each 0I1he 13 W8eb of lralnlng and they are evalualed weekly on .. ~ rumers. The Jdy 2003 SAW Ir**'9 ooached CCIU'1MIora 10 refer to tlllI'OImeIlis as '1eveI one shJdent information cards..· AA this baInlnV. UOP es1ablished Ihat at .. end ofllle 13wMt~ . .. foIowlng~ ~ deUm'Itle #1e reauiWs 0WIfaI rating and salary: •

30-43 level one InformatiOn cards C •• oIIlleI1Is) • Meets 44-S91eve1 one ll'lfonnatlon cards (ellrolment&) = ~ 60+ Ievet one IlIbm.loll c;ards (lI.clinenlS) = IWtay$ -..me no more than a 20% tlake- (drop-out rate)

At SAW. UOP urges reaUIers to use the matrix as a guide 10 reach their desired "level of ~1COeSS - .•

The maIrix sets for1h 1he rabng rmeets.· etc.) associated with lie runber fA enrollments. and It is I1eso aieria Ihal supen:ede at oChers and aduaIy deb!m*'oe salary. Reauiters ant keenly aware dhow Ihe matrix tunben estIbIish 1heIr lMliaries. AI OM Ume. the matrix had the salary printed on !he mabix Ilseff so that a recn.ifef' 00ukI readily determine the number of enroImenfs . needed 10 make a spedk $Glary JeIIeI.. ()n(f f8Q'UIer said IhrIt if was WI.,lClt knowIedg8 among recniIers ht each ... oII1'ln Is wor1h abod $750 WI annual salary. In recent years, the matrtx (contailling the enrdIment expecIalons) and ~ ~ 8SSOCIafed with the ma1rtJt In S8pIII'at8d We two doctInents such that recruiters have 10 simply put the two documents toge1her ~ detennkle ttle aaiaIy Icirwis associated will efllOlmenl numbers.

UOP repeatedly Ibii 1M (h$ the ~ of enroiIment rumer.; IhroughouI its orientation and ~ of AICflitenI.. Among the dcxunenCs provtded 10 newly Nred recNtiets is a document entitled 1M Psyd1dogy 01 Enrolment SlICCeSS lit the l.JnMnfty of Phoenix.. ThIs document 1Duts the llenBlb and rewards d beIf1I a sales pdessionaI a1 UQP, Indu~ assertklns such as:

• $$$ - No limit on Income • Highest paid people In the wOOd are salespeople • Never have 10 worry about $$$ again • Top 20% ElII'OIIment Counselors @ UOP = ave. $75,000 +/yr

-oCher' 80% ave. $25,000 +/yr. • Top 20% = rMMW worry about $$$

The Winning Edge

CounseIor'1 Counselor 112

•

100 ~ntaIf $65,000 79 activitiesIhalf $36.000

529,000

3.5 addiUonaI activities I month = $29.000

In .. case dOn Une ntcNters. several recaun&ed .... 1heIr' .... 18QefS told Chem Ihal uoP caIaIIites 1heIr ...... an .. basis d one hal of the IUJ1ber of SIudents each recruIIer enrols In a &Ix monIh period; e.g., 90 IIudents enroIed In de monIas equals $45.000 In saIafy. On Une reaUI8rI saIcI ,l'1aI even though IMt matrix Ists II ,...... d sIeps In !he n!a'Uftment pror;ess. sud'! as lI!IcphoIae caIs., CXlfMf'SIcns. etc.. the raaIly Il Ihat none fA these tackn actually dect rac:nMer saIafy -~ Ihe ,...... of students enoIed. Some at the reauiWs ca_taAty eo ceded .. f1IldJeB for al steps ~ enrolments, ~ reoeIYed ., CMnII tMIUIdon 01 "neecb ~r unpIy twa". ~ faJIed 10 hi the requisite ruttier. MoRt ... one reauIer said Ihat ~ ~ IaI6;iIied IhtJ runbers on the vadous fadots 10 mUe ... CMnII avaUaIIon match lie .. 1fOIIment runber and thai rniIII18geI$ told Chern that.1hay get ... endrnants, .. naager eM make the otwr numbers maida. For exarJ1'le. one manager told II recrUIer. '"You get the e..cJli1ienls and we" take care d !he matr\X. We can lIdge Che rumecs on the matriX.-

AI reauiefs Indladed that they were not shewn the matrix. or Iotd at how enrnIments related k> salary. untI after they were Iftd. Rec:rulters who had not yet 00IT1pWed their first satary eYaIuaIIon were ....... Ihrd their salary wotJd be based on anything but runbers d I8aUiIIng acIvIIes. New reauiIIn tcnew Ihat runbcn detennIned their salary, and generaIy knew that If they cId -make .. ,...... hy add get a Agood ~,-but' they cId not make their ~ they wcUd not get .. raise they had upecied when theywtn tnd. Many oonwnented hi the boItom Ina WIIS: if the enroImanIs are not there. don' exped a raise.

In addIUon ID Ihese b ..... ~1ionaJ methods. UOP'$ Corporate DlredDr of Enrollment Yi:9lIs the various UOP Ioc:alIons 10 provide additional training and moIIvaIion 10 recnnn. Thls tIOrpOIalil 0I'II0er is Mown b ,. abIIfy to motJvaI.e IlfIouClng the ftnandal rewards at mailing lie numbers. IIWIn bJugh nsc:rUIers are aware that basing salary on enrolments Is against 1he law. Thh DIrecb at Erwdlmenfo. howIMlr, was quoIed _1IAIg rec::ruIbn: .. ra all about the numbers. It wit always be ab<U the runbefs. Blj we need k> show the DepaItmenI of Ecb:a6on what ... wanlio &ee..- FOft)'-four out d 61, «72%, oflhe reauIIIn in. wtawed stated hit It wu iiIIMIyI abed the numbers - aft abed "bulls In seats- Of -asses In cIaaes --10 ... the wmaa.dar commonly heard at lJ()ft. One recrulW' sfat8d Ihat. .... c:uItan In the arVlltlizalb, ~ iMfIY from qulOty .ctucadon and quaIty counRllng. b geCIIf}g bodiel In .. door. "The rum. at •• oall8lU IS what ooums..

AccoRIIIgID some recruDets. whle the Corporate DIredor at Enrolment stresses !he big doII8rS I\aI ccma wiIh ~ eCI'OInlMls, he charactertZ86 h compensaDon plan fer raauiIers _ ..... and mmn- 80 I\al UOP can "ft)I under the ~ oIlhe IJe:par:rrMn. More thm one J9a1JIer staled hit they also hoan1 the 0Ired0r or t.Iarketing say. when dIsa ossIng the saay OOi'ipe1 ..... pian for rec;nJIIen. "We're IIytng under .. radar of the Depai"'''' - Boll managers and reauIIefs f'dm'ed to the matx as a "srnolesmIen- or '"smob and rrirTors.9

~ ... ,.,... UCF '- aMIled YWIout ~ '> cWne .. ,..,.01 ........ . iWCMW 8IiIOIII .... 'en... UOP ~ _"'1l'OId".IIIAi . .,.("or 0dvty." As~ " ..... -.d.cbq 2003 SAW~8nd 011 ... 2U0311i11n1. UOP _ .. phi.- '\ewell on. SUIenI tlibn .. '"'' c.d."

~ R.M.w Report. PRCH 2OO34O!iZ2254 UnIwrdy d Phoen&" PboanIx. Mzona Page 11

One reauIIer, who racaIed Ihe CorpcnIa IJhctor at e.oImeIll saying "wen, IIying under " radarollhe Dep8illi .. i. - beUeves tlM .. -mecruc Is a way to deaIIYe .. Oepartment..-

!-1.2.1 TfiICIdng Commission'" $flies IIId s.Ies PeIfotrrwtce

In order to Iradt Ihe nuriJers on hlnlllbc. UOP uses .. eIabonIte traddng system 10 foIow hi AJdeors CIMlIIrTled ~ nllD hdt which nMJUIIer Is gJyen M!dit for bJ I!IWdn.nt. The ~ &ystam c:aIed ~ trac:ks hn •• ", caIs, ouIgoing cab, teeds kJ aqxAntmenls. COI1II'eII'5iDn clappoilllmenlS to apfAk::doIlIS, ~ appoillbllel'lts. ac1uaI appointments, reterrafs, appa"'l4. a.olkueuts and -aaar.es- (\IIIIhcIr;IWat). UOP Reb ht&e AICNting 8CIMIies daly. RecruIIIn rneeI wiIh &he; ~ on • dilly, weekly and roontttIy basts to go over 1he rurf)ers and dIsaIss bow to ilCl'! ass them In order 10 raad'l1he desift!dsataty. sauetJmes J1Ifarn!d loa'" -cIesirad kMII d .'C"e"'S • . ReaUIers maillltidt • manJallst or each studenllhey t{aye emIIed when the appIcation is COIltplekd. They two send .. 1st to. regionaIlliabtil", aupport ooortW1ab. On a monI1Iy basis. Ihe regIonat ~ Sl.WOrt c:oon1i1ator ~ a ~ d aI new enrolees and deteinilles which studenb haVe aIIenSed at least bee ~ - the poird in time at wt1Ich Ite reauIer may receive aedit for salary pwposes - and also Ihe point at YItlIdl UOP can chatge 100% or 1he IuKIan for !he cotne and no longer rrust FlY a refund. 1)19 matketlng support CIOOI'dinator then compi1es what UOP has Iracitiorgly caIed a ~ Starts Repcxr for ead\ ~ for Cran$('''' to UOP headqUilRer$.. lJ()p then c:hedcs wheCher each new enrolee has made sa6sfaclory payment 8i I "1geI'I'IefIl:s. If the sUfent has met the aUendance and finandaI arra.1IJeIlleOl a"eria.. UOP lentattYety gives hi ~ aedit tor Ihe enrollment.. and the studant will be on lie ~ Starts RepQt 01 the raauIIer for Ihe month. UOP then ClCqJIes .. COlIIl'IIlsslollabl8 Start Report for fN«'/ recruiter at each location and sends them to the CUporate Opeo alb IS Manager at UOP headquar1ers In Phoenix. Ar1zona..

The ptmary PI» or lie CorporaI8 Operalions Manager is to tradt et.~,iOOIS to assmt Ilat each recnJIIer ftC8Ms the appropriIte enrollment ~ tor. -quafity enroIImenl"' (an enrolment that has met boIh a8tIIdaia and Mancial81T311geIlleI" ateria) end to pn!pQI'8 a ~ report that Isis ....... It!nb by carf1lUS and by ec oroImaIIt ocunseIor. Upon reoeipC of fie ~ scarts Report lor each roaWCer, the Corpcxae OperatIons MtMlager again chec:b whether ..... ~,1OIlf meets Ihe abo"" listed adBlidencB and financial aiIaria. For enI ........ fBI to meetlhese aterfa. she __ ... ,....trom !he Commlssionable S1art5 Report 101 PlPIfa _ tnaI.approyecI ist of Iduderds b 'fIiUch each recruiter'" be cncited. The Corpora" OpeI.lbiS Manager Ihen prepares a iM!!p8IaIe Ii£t for" each rec:ruiIer. The fin;II 8ppRM'd CI'I'OIment 1st. togeIler wi'Illhe CommIssionabIe Starts Report showing Ihe ~ 6tudents, are thea bocnd by location In a fmI report referred to as !he -orange Book..­UOP bin sends lie bound repoft to eadllocaIIcn ThIs ftnII bound report shows total ....... bf IocaCIon as wei as .. final enroImenIs ct.-ed 10 each rec::ruiter as wei as each rac:nMe(. nIjedad eIIildments.

The CorpoI .... ()peialbiS Manager then also ~ a manually prepa'ed Excel spreadsheet. matetaIned on a tIsCIII ye.- basis. Ihat Ists aI rec:NtIn .. their ftnaf ero&oIImeIlts for each month. ThIs spreadsheet ranks .. UOP reeNters from allocaIIalS by Ile nta"I'ber 01 eI.~ lis aediIed kl dato. ThIs spleadsheet is known as the -stadt Ririings •• which UOP

4 For ~ .. AIPDI1 .... c...,....,. to iii. ~ SbI1I RIIporr Ind ec. rwI\IImId III I. ad\. 11Ie ,....... 11.,.-...,.10 •• "Coi ............ St3rts AIpxf' ~ ... 1nIlndon 1MnUII1Dr ... ~!haC ~ It. '" __ ~ UOP ___ CIt III .......... 10 .. ~ tD'O'CClO1 ElIidIrIId Repoct.-

PrcIQIIan ~ RIIpwt, PRCH~ \.WwnIty of PhoeIU. PhoenIJC.Art2ona Pag812

3ends monthly 10 lhe tnaMg8f'5 who generally cIDbIIa I( to I8Cf'UiIIn. The COIpora18 Opendb. ~ mal11ta*~ . tie on each recnfter In the cqarizaIon 1hat c:onIam .. ca,., issb table SWb RIIports and altha montNy Stack Rartilgs.

In addition 10 the abcMt procedans. at the local anpus level, .. MartcdIng CoonInaCors ~ ~ and CQn1JiIe. maooalty prepared montiy tepOft. enIIIed ~ StICC8l$ Recap. This RIpQCt capbnlhl eliolmeni adnIfIes of each recniIer at Ihe IocaIIon. The I1IpOrl desaIJes !he "Meets ~Uor.· stanitards of ead'l lIiI'OIment acNty coi .bllllI!d wi'*' .. rec::ruller"s IJ18IrIIc (Outbound cats, SdieduIed ...... Ib, .. .ts. Rafen_ Corpcrale .ibnlillloi. Cards. Sbftd WonnaIIon cards..ad ElicA. __ ) and .. 8Clual1Unbers acIiIeved bJ the counaeIor. The rapcrt abo c:apIun!s .. CXJIMII1IIon nrtas 01 eedi reaUt8r from ........,. One SUIant Info. Cards· (Jr1IIIII.us.nt eI .... lletil) eo lIu.I~.l1lenl for whicJt Ihe recruIer wi receMi aedI (I1ree classes and tNnaal., •• ments). ThIs ftIpOrt has been Id ... llfted bJ many of ht ~ as hit .... ~ the n!ICnAn'lhIINIg8f8 u.eln Iieir rnonIhty. quarterty and UVIUaI~. UOP requhs each I'1'IIlINV« to fonrIen:I .. report _ .. dad1menIeo UOP'8 Caponde fmlIIment omc:e each mon1h. no later Ulan Iwllli clht fDIkNmg monCh.

5.1.2.3 IJOIPs A"..sNe s.Ies IIoIN.tJon Sysf.t

UOP's nt.ense foals on nunbers and eomIments per rec.nMIer penneeIes !he WOIidng day d eadl recruiter. ~ bonlbant the reauif8rs will emaiIs daily - 1sti1g !he lop perblilels based on enroImenb, appicabons. caIs and oIher ~ adMIas. with lie pace of emals pustq llUPlber$ escaIaIng at .., end d each fis(af )'eM as I1e annual report deadIne nears.

Each campus holds a daily -.nanling huddle.· fonnaIy c:aIIad an "OSIRA rnee6lsf at whid1 each recruiter RUSt report the IU1'Iber of e.t Irolmer4 ~ aa:xwnpIshed the day befonL AI. these rneetqs, the reauIars also report It1eIr goats for U'!e diIY, pcojedlrlg. based on their sc:hecUe, the nunD!r of <JUI)omd cats. the ltUIOOet"aI apPoillfhl8f'lCs sc:hecWad and at. reaUIIng actIvIIes they expect to perbm. These maetl • ..w to· n ...... or huI1ilJaIe Ole raaUtets based on Ihefr acIMGes. ManageB go r:Ner the rumers and eIher praise or cha&1ise eac;h reauIar In 61lnt oflle gRq). The managef$1hen stes:s the weeIdy fPIII and appIkaIIcr_ UOP ~ by Ihe end of lie Met. The recruftmenlnwnagers use a large boE¥d on which the staadcs of adIwIIes of MdI AIa'UIW SAt 1Isfed. EJCCep( ~ -vtsIIors" ant expected, UOP managers pI'OI'nhNlIfy post tha board Iiat isis lhasa staIi5tics

On Mondays, !he I1IOI'1*'g huddles also k1cIude a recap of the prior week. On a monthly basis, tho meetings InYdve 8 monHy assessment and 1Ien1izalol. 01 goals not mal, and Issues IIat need '" be rasc:Wed n CI"dtlr tc meet 1he goals. ManagerS mso U8e 1heM mee.vo eo ~ amouncementa ,egadliiSllhe CI"I'InII per1'onnanoo.. Foroxahlple, one EnmIIment OIredor,In a WticXli iftII"8nce wah HoJUIllm ~ b;ilCbas ~ an OSIRA meeting In .. F ... of 2002 said:

My job Is an Ihe Ine. Md I need you gup b perform. Md there wi! be no ucepIIoIli. If)'OU'ra no( doing your Job. you"re going Ie) bse your job. And if you're not hilling your goaJs. I1al's how we_ going to rneastn If you',. titg the job. And by the way. I don' mean aWlc.allons In. I mean star1s:

UOP used these frequent rneeting$ Ie) drive home I1e message that a recrul8r's success In 8eaft1g •• 01 ......... wwId 8CIU* to suoc:ess in reachlllg his or her $IIary goal For example. one recNtnait manager wcdd hquenIIy say. -X is gdng 10 maIGe • lot d money at h end of tis ~ because he has X 8I1f'OImertts." h was CXlIrIIl 1M tor ",. ageB to remk1d a rec:ruIIar

.. v

Program Revs.. Report. PRCH 2OO3409Z2254 Unhwlly d PhoenIx. Phoenr.. AItmna Page 13

how many more enroIIrnQs WIn needed 10 get his (S her stated salary goal. Fat campIe, one recruft« told the program nMeMn ... his manage(s 1aCtk: was 10 say: -w-Iow /ruCh money do you wanllo make? Wei, hen! are how many studenb )'011 have to register to make that mudl'-

UOP also freqJenUy runs sales proIl'lfJtioIlS, targetIr,g 1he Increase d en~ds at the end d each ftscaI quarter. Soc:h pa,lClCIoIas may Incfude the waNer ~ fees « the cost of books b" $tUdertt cus1omen. ReJerred ro as '"bitzes: pralldioills are peoeraIy offered around the end ~ each quarter. oumg some ~ .. UOP managers mandate that recruItIn worit ~ overbme by wortdng e'tIet II!IIS and SaUdays.

In addt60n to Ihe frequent f.lc.HHace ~. manaoers bsTage remiters wi1h emaDs 10 rembI them whent !hoy are on a ~ basis with resped 10 other UOP ~ and ~ the taJget number d studenr enroIfmenfs.. Examples ~ such emais seot 10 recruIt8C'S on en On Une team read· •

• From a Dlrecfor of Amn'ss/ons on July 23, 2003 to ECs, ~tJtled .. JuIyIAugu$f Goals":

Now you know what is at stake and the reWards available at the end of the month at August. please teO me what your own personal goal is ror July/August combined and what your goal is for your next 6 -month review. 1401 1301 How much you would like to see your salary increase?

• Ftom VI Enrollment ltIaMger fo EC$, April 24, 2002. entl1led -ream ~ this AM"

Make sure that if you didn' hit your matrix • lor MEETS n June, that you do it in

July. EC111at means 14. EC21s 16 ... any questions?

Program RftiN R8port. PRCN 200340922254 Unhe(dy d Phoenix. Phoenix, ArbDna Page 14

• From In Enrollment IfIanllger to EC$, June 28. 2D02. entitled "'Back to

Your job. as Adrrisslons Counselors, and sales profes5IonaIs is 10 get In touch with fNer1 one of !hem as soon as possible 10 evaiJale thew needs and match Ihe benefits of UOP wi1b those needs, thefI dose !he sale.

The expeaatlon for EC2 t. that you meet Ibt criteria of rour mIIrtx. and enroll 11 new sb.Id«Its udI month..

The eJCpeCOtwUon fw EC1 Is u.t you .tso meet the GIttoria of your mntx. and enroll 14 ..... .tudent ~ month.

,... CIT, youn --.ane tor ~ Exateet. on ~ rnatr1x, .... 3D MW .......... 1n r-r fht ctne monttt. on the noo....

These number.s and CIjIeria 8~ measured on a quartefly bafis. so know what

your evaluation quarters are, and what your goals and runnilg totals ant. This is

your process to manage. You can use vacation tine when its made available Co

you, but make sura that you- students are takeo care of. and Ihat you stili meet yow

expec:tabons. " )'011 produc:fion levels can't be maintained becau$e d vacatlon time ....

you have planned. )"OU need 10 ~ extra before, and after the lime off 10 make it a non-

issue.

• Nom an Enrollment Manager to ECs. AprlI25, 2002, entitled -Plen 41 Reply to Me .. Lunches"

We've regged 17 new studenb In the last 2 cbya, and 11 of thoM we ... on Tuesday. WAY TO GOIII A8 of Jut ni9ht we· ... at S1 REG .net 3e APIH, moAI combined that either March Of' AprIl •• nd we've only been prospectfng for 5 dayalill

. Whens are you In relation .., your goal?? Right nt:NI you &hoIjd plan on being lit haIr-way (REGIAPIN (1)1,0. led) when yvu W3It In tho door next WedlleSday (May 1).A. • tNm ..... lit .amoct uxtfy 33% of our promlMd 275111

If you think d It, I ~ the RE<J.O.METERon O'rf door, and I've been updating " fQr !he iast couple days.. Feel free to add your own v.tlen you put 'em In REGU

One eli .... , .. II manager puts a spreadsheet on her reeNters' computer desktops Ilat shows heM many enrolments each recruiter needs lD reaCh the next salary level. The lJIortMg is _ ~:

Program .... RIIIpott. PRCH 200340122254 Un.Wraiy d PhoeoIJr. A .... 1ix. MzDna Page 15

The NQ'\iW who proytded us h aboYe apreadIheet ~ that her manager pIIIcad It on .. desIdcp ... tw end (If JJ.i1. It shows .... 1hB reauiler heel 71",JRlImerta. bf" end floUt. The August hOugh November runberw raIIect .. ,..,... d "ct8erect' • .oII •• 1b (~ withcbw*) hit lael'8lCltlllllrwll nMd In 0RIet'., t... 90 enror.n.a .... ac-manlh pertod - .. _1fOImeI1i number that wcxM .... ln .. f8CtUIII(l duhd $45.000 -.y. TypbIy, the .....ager kMIpa theIe IpI'8IIdshe8Is updated 8nd dNItw viIbt on thl l8CfUIarI' 00II1pIMr ~. CUrtng the oep.tI,1enI'1 III llilit.11oweww. the n.18Q« deIICed lheae 1pfMdIt .... from lie Na\IIIn' deIIciops (The mtewwa 0l*Il .... QlPJ c:A" apreec2IheeI! fRIm al8mkMiD had aaved Ile ... before hi managa dIt8t8ct I frmIlhe ~ deIIdDp.)

Just .. remitera ant rewarded for meeting 0( ~ ..... oIment runbera, 1hey .. 1IIso penaized for not meeting flit ewldment rurmer.. Under UOP'I Nay ~. UOP eIso pays nalIIgE!d Inf dIrec:kn on 118 basis 0( h runber oIec.rollmera -=and by the raauitIn U'lder theIr.upenrlsion. RecniIars '* I\IIt IhM" ~ ware under a lot d preuure 110m UOP'I c:orporate oIIk;e to meet .. ~nei1t lUI'ItIeta. When teerUiIwI· ... 10 meet IMt •• oIInl8l1l epA set by UOP. the managers made It dear ..... rem-. .. aMIng 118 rnanagarllo tal. MMy rec;n.iWa stMad Ilat .. managers "'Irled to mab thai' lives nilerabla° when their enrollment runbers ... not high 8flOUIta.

A IUI1ber d recNtars stated Ihal UOP did ncI heSbIe ta tnaten them witlloa c:A their job45 r they filled to meet 1Ie~. Sewr1If reaultms irdc:aIed hit .ame managerrI' styles ... 10 oppntaiVe that ewn though one Rilly be a lop p8fbmer one·weeJt end pralaed as the 0gre_st, ° the same peIWlI1 II being 1lI __ ted WiIh fIIInnInIdion fie nexf W'IJUk. "You 818

COIlStafiy InaIaned I you don' meet Ile runbers."

Many rec:Nitera ~ concern aboullosing I1eir Wion benefb I they failed 10 meet ~ 1lIIIiMn. Some ntcnMIwI who .,. aauderD IncIc*ed 118l..., 0I'Iy '*' Ided to my long ~ "finIIh..". degr'MI. UOP. 8nd ht IIey had to do wt18IoYer'MI necesaary to meal .. endmenl runbers to allan thIt goal

AI .. On Lne c.np.. 8VWl mont twsh meIlods WIIftI used to "JUlilh" fIOJII8 'MlO faled 10 milt 8Imm.1l rmara.. Most On lila recnII8rIl1IiIIId 1l8I1fleIr rna"iIQ8I'I UI8d heIvy­taldad i .... 'idIdIut tIdicI to turiIIM IJem Irm ~ .... rurtJen... For eurnpIe. one 1IdI.1iIIIui. cIIredDr (one ~ kMI ebove #lI1KhIIIkIOI ... ~ Is Irinc7IWIID til recruIan, Wa\ they fat 10 make .. ~ enrollments, .. hIy ... ".' [III from Brian ........ (CEO of UOP On Iile).

WelIcnoIowl M100Q lie reauiIIIn ... fie "Red Room" -. place viewed wIh fNr and drud by reauiIIrs .. whom the ~ spoke. Sbde.en 01 h On-l.kle recNtIn who W8r8 ........ WwecI COI .... "_ knowfedge dlle Red ROom. and.ver1illWMt aduIIIy sanl liOthe Red Room, as pi.I1iIhment for not meeting IMt runber d •• oImai ... recpred indio( ecpectad by malillg l ll ... "

Progi_ .. R.-w RIpoIt, PRCN 2OO3QZ?254 UnIvwdy 01 Phoenix. PhoenIx, Arbon. Page 18

The Red Room was a large room i1 which tables were &ned up In I.e middle of lie room. The room. was encased In glass so that .. i1 the area 0Ddd see who was .... Banks «1eIaphones Mre on .. table, around whIdl lhc I.Ildefperfonning recruaers MIn! crowded to maIaa taIephone c:aIs. WIres td'9 from Iha oei'flg tJ prcMde poww" the ~ ~ on tho tables. SenIor r8CNters and managers hawered CM!f' Ile lIlfoftunate 1'8a'UIIIeB. IsteMlg to 1heIr c::aIs ... doeeIy manllortng 1hem. Those who ... 8ent tJ the Red RDc:wn ware slowed no YIIC8IIoI.1ime and were eIowed no braaks other !han Ihose spedftcally set ~ those WOftdng IhenL A. rec:ruIIer 88ft 10 the Red Room was requk"ed 10 lrrvnediatIefy IeaYe tis « her desk and taka .. (If' her CXJn1IUIar there. ReauIIn WIn rwquIred Ie wOOl; In the Red Room .... they had atIaNd .. requhd'number d ellfOImenIs. R.oc:JUIets indicate that UOP ceased ustJg the Red Room In IaI8 2002.

AI balta .. on Gnuld Md on line C3fI1)USeS, • runber d recNtefs staled Itat the aIIocallcn « ..... felda and tIoar time was bo4h .. 1nIIIridatIan .... ,..,-cI1ooI tJ manipulate Ihem ir*)

mont IQJessIve andIor uneticalladlcs. RecruIIIn viewed leads as the souroe of abtalllII'II .1nIII ...... and saIary~. When. raauiter was UldeIpeItaIllilng. menavers Mdd deer. lSI the leads pnMded 10 the AIaUIar. Also. Wten • nKnfter left UOP. 1he m3ll1ager would dMde up the former reaUfte(s enrolments. The granIing «leadIand aadiI ~. former reauiler'a et.a.IIIMb was ... to each manager. Those who had high 811fU1ha1t runbars receI'Ied meN leads, enrolment aedils and saIary~" Those wIh less ... loIInerlfs had leads I8Icen awtI/f, receMd no erct6"er( credits tom tbnnIIr rec:ruiII8rs, received no salary Inaeases and oouId have poCeoUatIy sulrcnd a pay cut. A runber« the reauIerI noIed bit 1hose who did not -meet the 1WI'Ilben;- 01 ef.rolmenls ~ be deprived of leads and Iocr time. A day of floor lime means that the reaufter gets ~ leads I\at come in as waIc~, as Inlemet rerum.Is, or caI-Ins. These fresh leads are cherished by recrubets.

This was <XIi_iied by some 0( the new cecruII8rs as wei. Some reauIIers were given veKY lillie tIoar time, which prevented IIem fran meeting lie runber 0( tltrOIIments upecIed by UOP. As one reaUIer said, "UOP" make yoo soa:essIuI if they want Io-Ilhey don't want 10 make you euccessU, they force you out..

Same Northem CaIifonU rec:Ntan incIcated !hal in 2002.. namgers became YfIfY inIImIdating becallSe the enrolment turbef'S were net up 10 par. San Jc:l5e reauftefs were Idd that ttar -r.eads wcUd be on 8 ~ bIod( l!hey did not tvt their I'lUTtJers. UOP abo ~ I8Cf\IIbn tJ cneet their ~ et IIUImet It ~ ~ 01 wheltler they had vac:atklns. honeymoor-. a death ... Cha f'a'I1Iy. 'ness or ofher evenm fha( ntenupted !her wert 8C:ItecfuIes. As one manager stII8d:

The ~, wit be tf1a( If you ateo't at yos goal by 318 (b Uardt) and ~(b ApII). you and I wli plan what adcitlooalllmo you1 be In I1e oftIat on weekdays and on waekendl io get Ihe job done and get bade m Iradc.. We need to qulllInking fA thb as .40 hrlweek job, and l1'UI8I,b:tr!hal we're getting JladID _least maetapedaCions (me Induded).

One reauIter r'IICOt.dad how her manager IespoIIded when Ihe IOId him that .,. nay need 10 go to New York for her grallctnolher's funeral. He said: -You cal' afford lie time IMaf from Ihe phone. You can' affard lYe days beraaYement leave. And r you go, you have to proo;e1hal you went to ... funeral and tal she Is dead:

A. recNIer who misses the runbers for arrJ monIh receIYes immediate notIIcation from UOP. Managers doseIy supervise d activIIIes of f'8a\Aw's. sc:ruIirimg ",*Ikne as 1racIc.ed In ht

Progi .... ~ R8poft, PRCH 20CN0922:254-UnMraIly 01 Phoenbc, Phoenix. Art,p,. Page 17

mqMer system. ReauIers who do not enroft suIIicfeft oombens mc:eIve hanih emalls from Ihefr ~ c:hastIsfng them.

1M bmaI procec:I«R for di:sdp&la of ~ Is set forth In the UOP perSOIll8I hardboak and Is ClOIllmOIIIy caled -going on pIait.. The~ b gfYen 8 wrIttan~. set b1h In a "Wnr,g l..eti8r" or "O;salSSlon MemoIllwbn.· These wamilgs foUow an established UOP bmIIt ~ ~ They begin by .... that .. nta\IItef has faIed to meet the ~ d 1he posIIIcn dan EI.uI,.1I Ccx.neIor. and epedry 1he iUfIbers hit hl8ClUlter roost meal In Older to"" his or Iw job. T~ the ~ sets bI\ a table such as .. foIowlnG. showing the -weeIdy Goals'" and .. rec:nJIer's adUalperfonuallca for. Ih ..... mo".,. period:

Of OCU'S8, of Ihese adMIIes, 0Iiy enroIImenIs possess atrr'f real significance.

If the reauitef" fails 10 meet these numbers, UOP pI8ces him or her on "decisionaIleaYe- - one day during which the mauler Is 10 dec:ide whether he or she -wishes to be suocessf\J at UOP'" Dlmg -dedsbaallea¥8". 1he recruiIer is not Ibved to engage r. eI~118fit activities and Is reqLftd 10 set bth a plan 01 pefformailC18 ~ 10 praanllD his or her manager. If the f'8C2UiB's pab .. &1C& faIs to -.neer expecIaIons, UOP fnId hkn or her.

5.1.3 RecndtIr Evaluation ~ .. fWat'cJrces & Ranks .... QuantltaUw

More Ihan 70% of the raaWWs reported that they went 00BW8I'8 01 atrr'f basis for ooo.,ensation other than enrollment ....... and ~ adMtIes. lis nnatcabIe that the only reauillefs who said .. their salary also IncUIed quallalNv taacn. IUCh 85 wstomer seMCa. were reaUIers chosen by UOP to be .... wtewad by" nMewers. LJtwnIIy ewwy reauIter "*'."..." nncIomfy III .... tIl e. Mri premises said"..,,,.. number of enroImMb defelrlrlMtl __ aIaty, Some reported !hat 'IIIhIIe I1ey were aware that Iheir evaluation form IncUded ... -qualllative, ~ sdljecIIIe" fadDrs. thK managers always asand 1hem hit UOP Included .... tadcrs *" to deceiIIe the Depannent and that UOP ac.UIIy based salary raises solely on flo runber 01 afUdenC:s • r8CIUIIar enrolls.

DurIng .. cputIIIIIy evaIuatic:m with reaUIiers. rnanagefS ~ focused on the qua ...... fadors, ~ ervtlIImerds. The evaluation fonns. hooweYer. also list certain qllall •••• factors at the boaum. Such facb1i i1<:bie "Job Peffulma 1Ge; "Wortdng fWaIb ... • ~ and "'Customer SaMce.. These quafIIaCMt fac::Itlts, acoon:Iilg 10 mosIl1JCIUiIIn, .. sin1lIY conversions of the quantIIaIve factors and ant hn simply to deoeNe the Departrnent.

One raauIIBr f8CDriad that he had asked his manager how these factors W8Ie detef'INned rnf was told: .... s "Iolinents. You IcncM ... eniC.......... It wII always be .iRlIIli8nIs.- Ndrer recruiter queried his manager ddfng his evaluallon abed .m 0( Ihese qualitative factors a'ld

Program RNew RIpM. PACN 2OOMO'nZ54 lJnMrsIIy 01 PhoeI" Phoeulx. AtfmM Page 18

. hew they .. datarnftld. .... mwnager tokf Nm that-Job pelforlilauc:e- equaIa to Ite runber d new .. dllll .... ~ ....... ntI"ItIerd aJIMnIions. "Cwbner SeMce~ ...... fie ntIIIber rlleadtlo contact. "WcniIg ReIaIoI ...... ...- resoII.q IIudenI Issue.t " 0Y8ft0m8 otJjectIaIlS and cots1adeS and -Judgmenr naant getdng studerD ... dass. TlIis IWCIUbrwrole Ns fTJdIege(a • .,..._ on his pedonnance evalwtion form. The bin was then signed by boll .. nal8geI' and tD 11 • ...,.... supeMIor.

On LN campus rec:ruIn atIII8d &hat even !hough !he rnatrbt Isb a number cI fac:bs. such as IBh~~ile c:eIIs. COII'tWISbIl. etc.. none of these facDs aduaIy affect the salary leYeI- orIy ... dIIl." Some d 1he f8CI\IIIer1J culSislentty eJCI08eded Ihe nOOlbers for alareas exoepI ... cA ........ ,. receNad 80 CMnI evaluation cI"'needs ~. ~ becald81heir enrol", __ faIed 10 hit U. ~ ~. Thus, , Iwy did exceed 8Iq)8daIions In aI.mas .apt 81 IRlInI8l ds. hlf8 wcuId be no PfOf'iUIOea. Men Chan one reauIIer said ht I1I8I tager.I simply fIIIHied the I1l.IRbn on the various fid:n to ""Jke Ihe CMWaI ~ match the ... Cllrnentnumber. Managers tad Chern Ilat Irlhe nKnJilergets!he etlolmenl5, Ihe manager can make the oIher IUI1befs mIiIIk;h.

Reauners were generally aware I\8lIhent was 8 Oepnnent potllJlllaef against ktoenIIYa oompensdon tor enrolk.nls. 1l1Is. it was widely known hit Ile evalJdon forms Up( In hi persoIVlflI files were meaningless. ~ ~ l'8¥iewIn flat during ht program reWM, pOor IIJ In~ vrifh ~ some manageB ooacMd ~r empbyees to say that f1eIr ~ and salary .. based on .. quaIItI""'" tacton, not just efllftlilrneflls. One of Ilese nawgens said that it was III "Just srnoM a1d mirrors· when referring to the matriIt. Mont Ihan one racruiter said that "Ihe matrix ts Just • smoIcesc:n!en.- and !hal "eYef)008 knows thal lhe ~ Is a job. - Ano4her rec:ruiIef AIded thai. his IT1IIflI8U« told him that. -rcu maIrb: says tNt you haw 10 Ilring In 100 Iead6 a ~ Y<u pay and petbmaa nMew ant based on Ihat.­Anoaw rec:nMar said thai her manager ~ her that, "The mab1x doesn't maller, it's lie Regs 1maank1g mglsbalolls Of I!llYDlmerds~ We can ~ the maIrlx any way. You get lie RBgs and we'l take an of' !he rnafrlx. - Ardhef I8CI'Uiter said. 'The matrix Is a Jet d bologna. The matrbc tab about aasbner s«Wle. ~ juc9nent. but when you talt 1o)'OtK menagw, .. manager tails you" It Is the enRlIments. If you get 50 RegsIquar1er, then you can earn $SOI(..

Aocon:fW)g to one Dreaor d Enrolment (preYIousIy a reaUter).the quaItative ...... nMew 10 dIscusa pcAussb.a deooelopl,lMi Is )Jst the bJchy, feeIy"' revtew. "PromotioI1S" based on ~ nunara only. other faC*n ht .. ClOCISicIeIed for the arnsaI reWIw are: rapport will students; ....... etc.. n..e .. evakalad for .. small annual raise.- The toIowfng 0Ml'l1enlS abouI hi "quaIta1Jwe- rewrw weremad&by difYerenI recruIten .... VIIrious Ioc:alons w.Ited by" nMa u.s. •

• "The quIIIIati'I8 fan in the employee handbook are nat mantioned. My manager told me Ihal w.IIuaIIonI.nd salary are based oMt on the n1IlrIx. spedficaIy Info. cads- -awolmelils.

• "RevIews In really based on quanIitatNe fadcn: They make the Hngs match. but irs really the number d elmJnlMls you have.-

:il~lill·fil ~~lt:l~ ffllr!i~fjr Ilili!f · . " . I

Jlli~i 1111=~i1.1 il ~~15ilt i-­sJhf~ H~iHHH J n~j~! Jh fln~i H; H U F

i;lill "iiilll!!I ,jl i ![~!i~ II!illl:1 i ··

t f~!fll ri!!llil~ i ~ljt!il~l " Iflill !I J ~I

Pmgr.II RrMw Aaport. PRCN 2OO:J.4OI2225t ~ d Phoenix, Phoenlt,. ArtIDna Page 20

Iw a msUI or this Clnfusion by &Om8 I1"ICIIlag8tS. In lata 1W9 or ..", 2QOO. UOP's Corpor;M DIractor r:I EnroImeft came up witt 8 ~ ---e documeol lhal eIqIIaIned 10 dir8cIonI d eo! '"*'* I( how pnlp8Iiy to c:omoert quanbtafNe fadofs II*> qualitatlYe f'adors. ThIs bIy was a ~ f!Jpodudion of the qualltltlYe 1adDrs cit of UOP'. standar1t pei foil kIOOIJ evalJaIIon. !he cne ~ In !he -oftIc:isl' personnel file with a Ii1InstatIon of haw n_1iIydI'S should equaI8 ... fadors ... a naulIer'l quaillW .. enrolment numbers. For irt.st:.a, the key said hit r a tec:nAIr wasn' making enot9t ....... '" caIIs.1ha n.agar should c:hack the ~ ~ or Ifle ... • 'ICD'- box In caIBgoIy rv. <t. (rtI. "Wof1dng Rellllionshlps- • • "'Establlshes andproil106es CXIflRuc:IMI wortdng~.

5.1 A s.a.tes Ac:tuIII1y Based on au.ntJIy d Recrulling AdfvIIIM

The evaIuaIon ~ at UOP. designed to obIIlSccM the fad bit salary eYaIuiIUons tor reaUIers Is bnfed 80IeIy on .. number d studera. tec:nIIIer'" -.d. did. In fad. restjt In slgllIIan·1IrwIdaI rewards for .... .r.o rose 10 the fq) or the Slade RiMlldlyo. For ..... uop promIsecf one t8CIUIer. hired In AprI2000 at $32.000. thathar salary would double In nine monIhs if she ....... 118 stUdents - a runber Ihal fell in the -uceeds 6lIpfJCta1b'- cafegoIy on .. n1atrtx ti:Jr the he peI1od. AccordIng to ubP'. rnaIrtc. tholmera In UCBSI d 120 b six monIls rates as "always exceeds: Under lie UOP eJirolment Counselor Poky etr.dIve FIscal Y .. 1899, the" .. ~ salary IeYeIIs $76,000 - $110.000. This reauIler enroIed 148 s\Idents in her tin;t,.,. months, ~ In an -always exceeds- raIng In har first evakIaIIon. UOP haea:sed ,. 8l/laIy b •• 000. a Iaise 01 $58,000 per year. as of February 1. 2002. arIy len monIhs after UOP Nred her.

UOP's salary hlsDy data slbistantiates that the abcHB mampIe is no eJCC8P'bL SalarIes for ~ oonststemly trac:bd Ihe malJix I salary ~nes sot fOOh In a. uop EnicAlient Counsetor Poicies u-aa ,... sJnce August 1. 199Q. Thus, as In !he abcMI~. some new recrufters. hnd • $28.000 - $32,000. I80IJMtd phenomenal raises In IheIr trst year. such as:

Recruiter 'E1wIments SaIatyBebe Raise SaiaIy after 1n6 moaPoo- Evaluation Evaluation to EvalJafion

'1 . hAd 136 $28.000 611999

tf.2.,tWed 112 $32,000 147,700 6/1999

• tWed 1S' ,000 512000

M,hhd 121 312000

I6, Nmd 100 .000 $24.000 612001

l6, hRd 100 .fI2OCJ2

ProgI.n Rrtkw Repor1, PRCH 2M3409Z2254 Unlvenlty of PhoenIx. PhoenIx. Artmna Page 21

RecNaers who tel lower 00 !he StIc* RanIdngs- tho6e 'fIIho wemln the ........ range for new reauIers-genera 78 - 95 elwdlments tor sbc montI'IS~ rec::etYed no raise or my a smaI percsiliage Inans a (2% -10%) raise.

, 11/1999

110, hied 1flOOO

IE Is In 6 Mas prior 110 Evaksallon

96

19

93

!iT

n

Salary BefonI Raise EvaIua60n

$41,300

32.000

$3&.000

As a red d !he evaluations UOP performs quar1efty, the sdIooI ravIews reeNters' salaries annuaRy .• The evakJaIIon form se1s tonh the varous f2Ic::tm d Ile matm.. rdng each fader as "'Unsatisfadory, -Requires 1rnpro\Iemeri". "'Meets ExpedaIions", -often Exceeds ~ or -Always ExceedS ExpedaIIons. AI tfl8 bottom of the rann. the manager c::t18cks an 0Y8I'8I perfonnanc:e lev8f dlle recruiter, on 8 qu,.terfy basis. UOP Ihen eslabfi8hes the salary fA the reauitaI: based on ChIs botIon1 ftne rating (Meets, etc). If .. racnMar meals the perfolillililce I8qUIremeIIIs for promoUori, the manager ~ a PerIoI.18I Adfon Form recommeIlding a salary Increase or pllDI.lOIIorl 1m fum1 must then bo eppnwed by I10se In Ile c:hain d COl II nand at the local...,.. before being sent 110 lie CofpomIe Operationl Manager, Ile penon responsible for maintaining the S1ad: Rankings. who once again verifies that the enrolments aIIrIluted '" "" recruiter .. aoani!t 1M CorporatB Openrlions Manage(a approval was obtaiIled on at raises and promoIIocts of recruilers nMewed.

A. review or the salary histcIy or UOP recruiters, in aqunction wiUl1he Stack Ran1Ungs, demonsbates hi UOP oonsIsaanIy gr.If1Is enormous saIaIy Inaeeses to Chose wiIh high erllDllmaiit nurmers. Ge1Mn1y. ~ wIh (Net 200 ellrOImanIs per yf!M have salaries in the $80,000 - $100.000 range. rep d1es$ d hoW long IJey hive worIc8d lor UOP. Reauftans who J8ach this etlolneld !argef can be IlSSlnd that UOP wi reward tan wIIh ~ raise nec.saary 10 readt Ihis salary Iewl For example. UOP gave reauIIIr 11 • $58.000 raise. bmgIng his saiary ID $86,000 pet' year. n 200(h when he enrolled 239 sIudet* and was • out d 430 In 1M Sttck ~ UOP awarded roc:n.fter t3 a $511X1J .... Ina8amg her salary k) $85,000, in 2001 11When ... enroIed 280 sfudentI and was 18 out 01398 In lie Stack RanIdngs. UOP pnMded iecruIBr #4 a $50,000 raise, InaeaIIng her saIMy rrun $30.000 to $80,000 In 2001. a fiscal year In which she enrdIecf 210 students and nriced t33 out or_In h StIcK RanIdngs.

ProgJ_n AMew Rapoft. PRCN 2OO34CJI27254 University of Phodx. Phoenix, AIbDna Page 22

lktIII h year 2000, UOP hlsb k:aIy also deaeasecI reauIters" salaries Mat they failed to maInIaIn their IewI oIGI.oIIll8Il1s. The s*y hisby daD 01 UOP also Q)i ..... " .. 1hIs pntdice.

5.2 80nus ~ Aw.nted on 8UIs of~ In Securfng EntoIImenD Md Quantity at ReauItIng AdM1ies

5.2.1 s,.ra.1I Club Trip A ....

Named after ... UOP rOemer. John SparIng. UOP spclIlSOrS ~ Qj) T", Awards.· Spcd1g tJ1le .... 8Iq)8I1Se paid .. for the reauIer and his or her partner, b"a nIo8 location. Spertng Irfps cost UOP between $500 -$1,000 per~. lbter Ihe SpeItJng CkJb Tllp Award pnvam. reauIIers may win • SperIng r", by .1CCeSS(uIy enrtA1g a specific number d students ..... a gMIn period 01 lima. For ...... In one Spemg Tr1» promotion. UOP promised IhalI8CNlers who enrolled 71 s1udanII dJI1ng the monIh:s d .ble Ihrough August 2000 would receIYe • SpefIng Inp. One recNIer Mao MlR this award enrolled 7e s1udents. She IndIcaIed hd the ~ Included wD1g. dining. awards. Icudos. ... to UnIversal StudIos, alrophy and • plaque.. The. was al-expeoses paid, h:tudJng Ihe 8lIpenSeS of her husband. ThIs rac:ruIter liiio wOn • Spertng ~ to Las Vegas. end sinafshe Slgnlficallay exceeded the enrollment goal. UOP also gave her $100 WOfIh 01 gambI~ c:h/pI.

The majority 01 reauIers 1rItiar1.~ tOOmned knoNIedgo of the Spering C\b Trips. M conInned that the awards are based on sototy 00 !he number 01 students reaalers enrdIed. UOP management In PhoenIx InsisIed thai Sperling Club Awns are based on a number d fackn, not just enrollments. ~,WIRJIlment mafla9'WS and recruiters a' OOiillnl8d Chat SperIng Club Trips fer racruJIIn ware ..-cIed based aoIaIy on the ....mer 01 o wolmet Its. One enrolment n818Q1l1' rrtated: -spenng is defiuitel)' based on enrolments. There is a set goal and !he 00iRieI0r has 10 abIain It In order II) WI" ~ Club Trip Awards ant announced and promated by managers via email to reauiIers. For _ • .-, one emai receotty annomced Ihat 8 SpeI1wlg ~ II c:ornWtg up and mcpIaIned that In order to win. a reauiCer must get 50 new sCudenIs Ie) enrol and c:oR1JIete the first course. SeYanII recruiters CUIlIi", .. d that Ihey had won SperIng Club T~. SudlIrfps Included an al­expense paid trip for one ~. and her husband 10 Wasf*lgbI D.C., where UOP CCMnd the 005ts of acx:ommodatIons at the Watergate HotaL This I8CIUiIer said that her manager Ii IbnIOd her Ihat she had won by sending her Ile following emaI: -" " 1'5 oIficial E¥8rY rteW enrolment has been oonfinned and you have achieved president'aleYel oIChe ~ T~·

In the rec:ent past. managers have been more c:8I'8fd au aooounc:insJ the fIlM1'lbi!lr of enrdli • __ required for • Sperting aut» T~, AWat18 d .. DepaI1ment'a prohIbIIon agaNt tnoentIves based on r..auHfng adMtieI. ~ hIM typically masked the target ...... required to wtn.. For ~ one dlrettar of enrollment sen. al emal1hat statad: "You aI IInow hit. calabrMBd J'f't/ so" Ufthday. So~, you know how many orollments ere needed. You alknow what birthday • ce1ebrated IhIs month.. Rec:enIfy. hOwever. for the 2003 SepIIember Spfdlg T~ 10 San Frandsco, the dlrealr d ellrolrnent orally amounc:ed the requiremellis raIw '*' sending an emait EC2s and I8fIIor ECs WOlAd need 34 ... (not applcdolls) and fraihmen and EC1s would need 25. ThIs was announced at 8n OSIRA meeting attended by aI raauItBrs at the location.

5.2.2 Pras. Gifts and Bonnes

In adcItIon 10 awardng expens&-paId *fps b eunoftnents, UOP provides IncenIIve awards for secumg enrolment appIca60ns Of' numbers of oth« recruJdng adrvities. A runber 01 ~ COi.'irmed having receMId gift cer1fIIcates from Ilei" managers tor obIalwig a C8f1aIn nt.IOOerof eppiadIoI.s or otheIWIse winning a recruiting adMty contest .... a gNen period of lime. Such IncanIIYe awards Induded: .

• $100 Mac(s or oller gift certIIIcate • $100 elmer gift cenllcate • DVD player' • '$ 100 T O'JS R Us gift C8f!IIcaIa • EIedronIc tIgIIaI c:ament • Spa packages

• SJd tidIets • l..oItery tickets • A's BMeb8I tk:keIs • Cash . • Portable CO Player

UOP ran Ihese Qlf1Cests during months !hat tuolmenls were down or IQYlbers were behind. They generally focused aroLnd quar1erty or annuar reporting peOOds.

Enrolment managers and reaufters cxdlliiled thai UOP bases these awards ~ on the runbera d oertaIn raauiIment ac:tivI6es. .

A typical emal tor these awards Is the foIowv1g: .

From: Enrolme"t DIntctor Sent 1/1712003 To: NCAL ENROlJ.MENT Subject: MAKJNG PROOfII:SSICONTEST Thar« you fnr your (X)C,_, lei, lei • !his past week.. •• You have shown that Janay is nat out 01 mach ... And sitting In my hot _ hand, Is • $100.00 dollar Top R U! 111ft ~ AJSt wattfng to be IaIIen ttlm me and wed. HERFS THE DeAL. ••• You have tom Ioday 1117 ulllll 5:00 PM on 1124 10 wWt L . . HERJ:S HOW

1. WhoeYer takes .. mast APPUCATIONS FOR.lAHYARY 'ft'om 1111 to 1124 WINS. ••

NOTE: IT TAKES IAPPLICATlONS ......... 1'0 WIN

If each« US can Idd 3 ~IS between 1117 met 1/24 we wII be real dose 10 our goal in January whIch .. _ lie table b 8 SlFER febnay ... Regards.

At the On Une Caqlus, cxdesIs were run from IIrpe 10 ..... based on enrolments or appIicaUons wItin a given pertod « tifne. but such conIBsts ~ far less generous. Thef induded a he cInner at PF Qalgs or • sinliI8r pnza. In h quar1IIfty meeting at the end d the moat rac:anI ftsc:aI )'eIW'. encIng August 2003. UOP On Lne gIMt overnIgN hcC8I stays 10 reauitefs who had 25 euroltn1l!Wll:s or more

UOP'a On .... ~ IIso tequenIIy ran oonamltat awarded ... rAt - USIdy Fridays­.... ap(IIcaIon .8g11s .. mit wiItin .8f*A:IimeIN. On the cia' hand. where numbefI ...,. nat mal.1WCIUIIn mIrId .... an email fmm thai' manager lnbii*1Q them Ihat CMrtime or weaka1d tame. ....,. pay. would be NqUIred.

5.3 ~s I RMuICs of $y.sfWJI1n PnIcfIce

5.3.1 p......,. II» Enft)II UnquaIIIecI StIIdents

RecruItIer6 frequenIty menlJalled their cmoem for sIudent a.stomers far whom UOP was nat a good educa1ionaI option, suCh II customeR who, bec:aIse d IheIr family and tNnc:lallIuaIIon. could net ~ aped to ClOfI1IIefe a degree progr.,n at UOP and WICdI be bettar IIW8d by ott.. ~ ~ •• comrrulfty CXJIege. UOP mal..,. c:hasIee recruiIers who suggest anytNng oIher.., UOP. UOP makes It WIfY dear hit aeauIIers are to do ~. lakes to gat .. sIudenI to enrol. Some mallga laid reauIIers ... r. student drops after 1M Irst .... week exuae, it should ~ be their concern, because by then. lip recruHer and Ihe manageI will have l'8CleIved Ihe eII.or.,1Id a8dit.

RecruIIets at both On Ground and On Une staIad that Ihey ... presstnd by management to eprol students who .-e noI quaIfted. They Ind"eaded that managers chastise them tor faIng to pressIn students .,., 811l"0III lSI or IIaying In !heir first class. in spIe of the lack of fira1daI I'eSIOW'mS. UOP makes I clear thai racruItens are expedBd to IncI a way.to "CMK'CQI1'I8

objadioI .. - e.g., If the problem was tnsumcIenI funds. encourage 1* fV lJndkIg. If the objecllon was ~ 1lIe IV f\n1s, pressan the student to seek • private loan.

Some reauIters who were afso UOP students eacpressed concern that UOP kept SUIents in class even Ihough they Mn ..... 10 perform. Some mellIIoIl8d thai UOP press&nd Instndors to pass all s1udenls, .. RIess of perfa" .. IC8.

5.3.2 Focus on 0baIn1ng Credit for Enroll ......... Not Compldng education

From rts monthly COmmIs$lonable sales Reports. tJ itS MTIIsskMIS Ccu1seIor Poley Guide. to Its 18Ililalad n=mindera fi'om ~ UOP IWIfofces to nICIUIars flat UOP evaIuatM and pays them solely on .. basis d how many slJdenIs they enrol. RecnAn rec:ounIed hgw hy In careful to foIow students &I'Id they met .. crIEfIa that resuII8d In aedIllo 1he reatltel's ... dII .... CIOld tor pwposes of saIaIy spedfK:Ay." the student must attend 1I1ree ~ d the tnt ItIIe 'lTJeek CXQ1e d • brachebs' program or, for graduaIIt students, attend two nights r:J a gnIClIaID class and be tc:hedded to aIIInd a second c:IiIIsL Nt« llelCUdenC has mel .... aiIaria,lhe mallagaea do not..,. .. teaWIers to spend lime will a IlJdenl UOP reqtjres them to plnUe new 8I1RIIna1ls, nat ~.,.., .e.o have ~ ClO .. IIl .... d one CIOUfSe.

Many reauIIn IIOughI that HI sysCem of selling the student and then dloppItl9 hm once the .. wolntent a.- is a.nad, &nfersclares UOP"s Iedt fA c:oncem for Is students. Those who had been at UOP for ___ years ... str1IIss8II ihat at one ..... UOP had been more s1udenl and education CIIlenIed. AftB Its WaJ Streel debut. how8Yar, UOP elmllliIIIed the focus on SIUdents and boc:ame Inc::rusIngIy aggcesslwlln lis ~ with ruTiIefs:. new el'iloImenb, moeIng Wall streot expeddao IS. maII'ItaDlg proIiI maron ThIs is especiaIy acute In !he case rA UOP On lht. where In qI8terty rneeIngs wtIh rec:rUIIn. the Q1Iaf 0pera1II1g 0IIIcer has stated that

Prowain R8Ytew ~ PRCN 2fID'MOI2?254 UnMtslty of Phoenb. PhOIIIIbr,. AIbDna Page 25

he InIends for"UOP On line to be Iha Miaosoft of on Ina educaIIa1" and that "UOPX wi aush CapeIa~ or ather ~ "Ib a grape.-

5.3.3 1ntenM .... of TIle rv Funds .. Sales Tool I CuMIn of Duptldty

Rea'UIII!n at 1he On line ~ went awcn flatman)' ~ iwoM1g Title rv fundi1g and ... IRA,"'" pr'IaSS. oa:urad In order to I1!iCIeiwl cn!dIlor 8IrnI'nenIs. "'People do a 101 of sneaky tings to get regs (ell'OIments~· For~, ShIn was ~ who tTeaIDd an enh FAFSA and aI'J!pItied II tho forms for .. student. He aaaIed "login and pIIAWOfd for lteltudenl ..... studenI add not IMn get Into his accourj bera .. he cId not have his password. ReaUears aMo n!pf8SIIltBd thal lllla rv funds ~ pay II ms1:8. and flat sfudanIa would hwe no Cd of podtat upense for their UOP .ducalon, when,ln fact. TIle IV flnIng'doea not CXJVIW aI casts. These AICftIIIIn .. expressed conoem IlaI students reauited In tis manner went '-IIJ cIeaIIMId, '*-.. UOP ~ vigorous coIIec:tian etforts .. soon as • student wIIhdraws or COhlllletlll • pt'C91Im - ~ 8II8nI JharI caIc:hes many sIudenIs by surprise. One reader went 80 far as to U'f I1at he hears recn.JIters ... to AJdenIs WfIIY day .•

A. runber of n!a'U~ at Ile on t.m Campus toVeCe 8WW1l 0( ilstal108S Where oCher reauiteB had forged oc "OJ! and pasted" slJdenI '9l3h1'es eIedroc IicaIIy arm masIer promissory nates and OCher emJIIrnoot documents in order to get !he application or .1I101r"enI credit by 8mCU1Ced deacIInes. ~ I'8CIOOOIed Ihat one reaUtet' was so good at forging student 61gna1ures. Ihat he was cUIbed "The Dodcr." One manager expected his reauIters 10 ~ papal Mlfk that the student is reqgn,d to complete. He went so ,. as 10 train new rec::ruiIn how 10 COfJ1IIeIa or modify a student's papetWOfk in order 10 expedite the aedit of an enrdIrnenl

AI. the On line Operation, recrt.IIt8r.i are I3ught how 10 use Ttlle nt funding as an effectiye IDol for dosing a sale. UOP On lbI provKIe$ Its reauters with tInandaI aid InsWdIon on how to use TIlle rv 10 "CMEII'tDlIe oIfItdbllS.· Tho InIining program and sales ~ tof reauitefS teaches him how to use InandaI aid ef'Iec:IIveIy as a sales tJoI. One of the strategies IS 10 ask the potential student "'You can alford $50 per monIh lor )"CU' bachelors. can't 'f04I7 The reauIIer then tails the prospec:tve atudent that allhey reaIy need to compfete fCK now Is the ftrst ftY8 week murse. TIle r/lnIIng CXJYefS the oosts d this course. Students can Chen wiIIdnIw. wart on gding a.EP cradds and return In • year or two at a higher grade and loan eIgibIIty IIMl students do not have to pay back any ... money ..... monIhs after wIhdrawaI and the leal paymaIts wi odIi be about $50 per month because the loan is only for the tIrst ... week COU"Se. 1Ns way. Ilere is no .t:U~ cost A. number of rec::n.IItefs mentioned ChIs sheegy as very ~' In ·~t'Of1.lg ob}edlollS:

5.4 CondiIsba: UOP ~ Incenllw ~ ProIJIbIIIons Mel BIeM:hed lis FItIuc8Iy Duty

5A.1 Dec:eptIye ~ to Mislead 11M o.p.tIMnt

The sales philosophy at uoP and pradica Is designed arould evasion and reIes l4Xl" euphemisms to avoid detedioIl by the Department. OOP syst.emk:aIy estabfished temWlO4ogy and procedtns to hide the fact that UOp pays dIstInCI and ~ ftraldaf IncenCi¥es soWy based on feaUIers' SUC08S$In sec:ulng enrolmentS. Sinoe evabItions and salarie$ based on

PrDgi _n !Wttew Report, PRCH 2OO34OW22S' lInIwnJIy d Phoelllix. PhoenIz.Mmu Page 26

..,.".,.... would be readIy dete~ by en MJdiIor or Department nMewer, uoP refers to enrolmenls as -KfMtIes or .,."., one student Infom,.""" cwds."

Sev'IInII reauIerIlDkt the revfewefs flit they had CDIfmIQd 1hefr managers cUfno evaluations about the fad IhIl e.ey were acIuaIy ~ evaluated on eI.roItnenIs. not the ."Iufrfada'S prtnted en .. evakJaIon tonns (lie Ujec:tMI factors: .JucIgmId. Customer $eMce, etc.). AI went tdd by UOP bt I wi always be ebouI.1RIImeI1ls. One recruIIBr quoIed his mal" as saying: -You know you .......... en I1e base of enrol ........ wew IIIwatp taIcIed abcU Ihal You know hit. Irs never f!N8I been 8 secrat 1Iat .... an ellI'OIIment runber thai you are eIIp8ded to til- M On Lht c.n.- rac:ruItIIm who went ..... uIewed, except for Ihose chosen fer ....... by UOP, a1iBIed ...... salary was based an ........ of sIiiJdents they enrol, a fact lhat rnanageG reIIaraIe hquenIIy on en oral ba*.1III1ough Ihey never put It In wrIIIng.

ReauIten also told rwvIewen that whenever "IrisIIors" (goyernrn..a vIsIIors. aocredItaIIon vIsIors) want upedad,l8CNIers In cceched by iMlaagBI'S on what to say. TypcaIy, accordiilg to these ...au .... ~ ellRJIrnent lW1dfar application nunprs are very visibly posted on the waIs and on desks. When -vIsIIors"' are ~. however, these ~ and desk 'u!nillders' are removed unbI the vfsitcrs are gone.

liCefaIIy WeIY CUfJWIf UOP en1JIaIee who has wartred longer I1an a year. elqlr8S.Sed arudety ewer possible retaliation by UOP. Many (lOITIII1efItecI on the fad that in Ile current eoortOI1l)' •• JObs are very diIIIcuII to find, ;m UOP never hesila1es 10 AIpface anyone that It 00I1SIdIn 10 be oCher than a loyal "'t8am pIayer.-

ReaUters CXlIlSi6tenIy rna .... the focus and pressure to Inc2ease enroIImen1s to repcxt to Wal Street. Many expressed hit while UOP at ooe Ime Iocmed an the student and shssed 8tt*:aI conduct, the aJIbn now Is one wher8 the emphasb is an increasing the numbens, the stadt price and meeting Wal SheI expectations. UOP's corporate ClAn. steeped In -smoke and rrin'm.. aeatas a ~ MMIf8 some can StnMt, ptU!IHr and get rewarded. Often ethics are set 8S4de.

5.4.2 Cover Up DurIng RevIew

UOP's behcMor cbfng Ile progtam review process furiher ~ the eIhIcaI mncems ~ by boIh amentand former~.

One of the On li1e recruIIeIs sad Iud her manager c:aIed her and one d her teammates aside when • was learned that the [)epaitmelll was I1IYIeWIng the IncenIIYe compensation ... and MUd visit the On Line opei.... The ... ager coached Ihem to uy that salaries went based an 8 runber of facbs, notpt enrolments. The manager .... insWcied them that Ihe1 went not 10 speak to." former UOP eq)1oyees abouI what goes on at UOP.

111M lie annomcement of the progam review, UOP illIormed Is recruIIers lIat.they were contacted by someone from .. Depa'tnenI for an 1nIeMew, they went finIt 10 Inbm management prior to .-Ing with him or her. Rec:ruIers wifonnIy stated that they felt very ildIndIIed by UOP clue to ... pronouncement.

On lie first day of the review. UOP oIIidals went told !hat the locus of the review was the compensation pat for Ihose motved In adliDsioiIS adMtIes. SId that the review would el lCCfr1P3SS both Northern Ca'ifomia and Phoenh.locaIioIas and InvofIIe inteMews wiIh UOP

ProgI .. ANew Report. PRCN 2G034OI22254 Unlvwslty d PhoenIx. Phoenllr. Artmna Page Xl

stall. Shorty aJW tis announoemect. UOP ~ tdd ICIm8 recnIIIln at the Norhm C8Ifumla IocaIIons that they shodd Iall8Ieave « aIIend some bldIon awrj from the pr8I11ises. YttIen COIIIacted by lie Department after .. site vIIHs, these ~ WcaIBd that Ihey WBnI absent iJr • .,. ¥taws because Ih8y had reputaIcns for being honest Rltr..1k.

H 1he San ffaldsco Ioc:atIoR prior to the announcemeJt ~ .. PI""-" nMew, UOP was q>era8r1Q. come.t for RICIUIIIIIrs .. nratded pdzBs based on 1he numb« d apsAk:a .... 1S. This confast (for the buIIasl monIh of August) ¥tCI$ oeiIbated by placing t.blopcIy mmey on • bulletin board fn Ihe ofIce wflh ~ (coliesponclllg ~ AppIc:aIIaI .. obtained). 0n08. recnater acHeved the reqUsItB number d AppIk::ations.1hey aQd . lie ....-r and find tha prtzIt undemeaIh. The IowIIr IUI1bers COIJSIsIed d IoCtMy tIdc.ets. but some d the __ Pftms raac:had ~ .. hInhds oIdo1in 1ft cash. Upon announcemanI 01 .. program nwIew, howe.".-, UOP nwnoved Ihe Monopoly game.

, . .

At the On IiIe ~ UOP gefltlf'llly posta age bamefs rritng .. nte:niIIr3 by .. IUlIber d .. .mImems deared. UOP ~ these baMet$ shortly bebe 1he arrival of I1e nMewers iJr i .. w1aws fA On ~ petSOm8I. The UOP ~ ~ on 1VCIUaefs' oomputer cIesktoIls that showed .. salary I enrolment egoaa._ W8f8 alsO ramoved the day or the nMewers' .mvat at .. On LN CaqJus.

The adIons of UOP and .. system It has es1ab1ished cuIIMdes and maintains a corporate c:uhIn In de4Iance of UOP"s fidudary duty. UOP has aeeted an enWonmeot lhat ptts !he strong moCIvation of individual gain against Its fiduciary duty 10 !he Departmont tt;, 000 that ftaunIs the Departmenrs ~ and I1e ptOhibIIon agUlsIlnc:entNe ~ based on enrdlrnents

6 REFERENCES

Sections ~7(8) and .1(a)(20) of the Higher Educalion /Ad requk'a that

In order to be an eligible InsbIution fof !he purposes of BI't'f program authoriZed tnfer Ills DUe an ins6lUtIon ... shill ... enter /nIO a Pft98tn participation agreement with the Seaatary. The agreement shall condHIon the Intiaf and conmuing eigibIity of Che instiIution 10 partlapalBln a pr19ant UpOn oon~DI with /he bIowIni ~:

... The fnsIiIution will not provide aI'i comrnIsskIn, tmus. or OCher InoentiYe paymenI based dif8diy or indlredly 00 success In secu1ng elloIhenIs 0I1nanda1 aid to any pefSOf'I 01 enaties engaged In any sUJent rvaUUng or ..,~ adWitIes Ol in making docisions IUQlMdlrlQ lie award of student jhn:jaI ~. . . • •

From July 1994 ootI NoYemb« 200'2. Ile General ProYWans ~ at 34 C.F.R §668.1<4(b)(22) oodIfted this pcohibitklu of ~ or Inc:anIIw5 based on securing tlllrollments rn Ihe section retaang to PlCy_n Par1k:IpaIIon Agleemenls, as foIows:

By aIIerfng into Ihb prognifJl partJdpaUon ~ ~ In5IIutIon awees Iha( . . . it wII naI PfO¥Ide, nor mntrad WIIh any entity !hat pn:Mdes, any commI:sston, bonus. ()( other Ince .. ltve p&ymenb based dIndy or Indndty on SOCCI!IISO In ~ enrollments or financial aid 10 any persons or enIties eng89Bd In IDJ slIdenI recruIIing or adI,issb, actMtIes or in mamg decisions f998nIng Ile __ dlllg d student tinancIaI assistance ••

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The Oepaitailiri amended the pn:wision fa specly 12 -safe ~ CDlilpeusatian and payment plans. These ..... tabors- went designed 10 Blow InstIIuIIons tg maintain WiliplCllllSdtiun plans that pnMde far Ina eases to 1ixed c:ompensaIIM wNe rarnaIrli1g k'/ ~ with the HEA and ~Ig ~ 67 Fed. Reg. 51723 (Aug. 8, 2002). These -sara harbors" incbSad:

• 34 CfR §888.14(b)(22)(I)(A): Adjustments kJ fixBd emPayee 001 11* asafion' • 34 CfR §668. 14{b )(22)(1XB): Enrolments., p!0QI alliS flat h noc eigI)Ie for TIle rI • 34 CfR §668.1~)(22)(iXC): ConIrads wtIh e~ • 34 em §668.14(bX22)(1XD}:- Pmfit-sharlng 01 botus payments 10 all ~ • 34 em §668.14{b)(22)(1)(E): Con~S1CIoo based upoo ~ «XX11JI8tIon • 34 CFR §668. f<4{b)(22)(l1)(F): CicIricaI pAHm)Irnent adMIJes • 34 em §668.14(b)(22)(i)(G): Managerial and ..-vl8Dly employees • 34 CFR §668.1-4{b)(22)(i)(H}; Token gifts to IIudiInIs or aUnni • 34 CFR §668.14(b)(22)(1)(t): ProIII dlstrbJllons based on ownership • 34 em §668.1~)(22)(I)(J): In~ adMIIas • 34 CFR §868.1~(b)(22)(i)(K): payments to I*d partJes b norHeal.itment actMtIes • 34 -em §868.14(b){22)(1I)(L): Payments 10 third parties b reauIIment actMIIes

As amended k'/2002. the regulation now provides • ., r9IevanI parts, that an Institutioo agrees Ihat

(I) .. will not provide ant oormlissicin, bonus. (II oCher IncenIve payment based directly or IndIredty upon success In sea.mg enrolments or maoaaI aid 10 any person or entity engaged In atrf student reaUitmg or adnllSSion ~ or in making decisions regarding the awaRlng of title rv. HEA progr..-. funds ••..

rl) AclMIies and anangements lhatan Instidon may cary out wItheM violating lie provisJoos at ~ (b)(22)(i) oI' tis section Indude. but 8R!J noIlmited 10:

(A) The paymen\ cI filted ~. such as a filed annual salary or a fixed hoOOy wage. as blg as that compensallon is not adIustBd up or down more than Iwica during my IwetYe month patod. and II1Y ~ Is not based solely on lie rumer ol $iI.denIs recruited. admIIIed, enrolled, or awarded InandaI aid. For Dis pwpose. an Inaaase In fbcad COI11*IS8ion raUtIng from a c:ost of lYIng IIK:188S0 that Is paid 10 all or ~ aI fuI..tine ~ Is rlOt oonsIdered and adjustment.

(E) CompensatIon ttm Is based upon sturJMts sucr:essUy c:orqJWng .... educational PI DgI allIS. or one academic year of Iheir educa1lonal programs. wNdlever Is shor1er. For Ihis purpose. ~ COl pelion of., academic)'8iU" .... ltat" Ader4 has earned at least 24 semester or tnnester aecIt hour:s or 36 quarter aecII hours, or has IUCICleSSUy c:ompIeIed at 1east 800 dock hcus of instrudIon at the institution

(f) CompensatIon paid 10 ~ wtlO perform dertcaI "pre-eMJImenl' edtwIties. such as 8I1Swet'.ng1e!ephone calls. ref8rnng inquiries. or cIstrbAIng instiUIonaI materials.

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(G) ~ to managerial or SLpNisofy~ who do not dhdIy manage or supeMse en~ who are ~ IrMIMd in recn.dng or admIssb" ectivItIe&. or the 8WW~ IlJ d tide IV, HEA program funds.

(H) The awarding d IDken gifts to lie instIuIon's stUdents or aUmI, provided hit !he gills en nd In the lam d money. no more !han ana gift Is prcNided annual)' 10 an IndMduaf, and the cost d the gilt is not I1'1IQ '-' $100.

34 e .F.R §668.1-4(b)(22).

The Irst safe harbor, per1aiil-sa ~ SIISy ~ was designed ID aeace • "baIano8 beltteen the need of an Instiu60n ~ base its ""~' salaries 01 wages 0f'I marl, and c:oncem ... 8UCh ~ do noI make the s:taIutofy piot~1 agaIllSt I1e payment 01 comnrisslons bomse$, and oCher IncI!ntiw payments me8ningIess. - 01 Fed. Reg. 51723 (Aug. 8, 20(2). The Secretary cI Education stressed, In Ihe ~ 10 !he NaIIce of Proposed Adell "19. that wNW salay adIustments based on ment do not. per .. violate I1e prohIbiIIon; saIaIy adjustments based solely on fie runt. d studentll8CrUieed, ~ enroIed, or awarded fNOdal sid do not faI'withfn the" harbor.~. The ur. har1xw was net .1IBI1ded ID emude salary ~ hit ant ~ In a '¥I'f that circ:umv8nIa the sfatuIory prohlJltion agaklst IooBnUve payments.- ~.

When enacfJng §487(a)(20) of the HEA in 1992, Ihe CXlfIfenlnce report Incficated Ihat the drafters did nat mean to imply that k'lslitutions CDtJId not base ~ CX' taIary Incaases on cneril. The CoIlgiessiottai (DlO8fI1 addressed by §487(a)(20) was to pnMJnt .. Instllulon from ~ InoenIIYes to Us starr to enrol unquaified students.. 67 Fed. Reg. 87053 (Nov. 1. 20(2) .. The regulation was drafted til _ b1h speQtic anangements thaC CXlfJStIIute JegitIm3Io ~ practicas that did not support !he enroIrnenI of I.nruaIf\ed students..!f Thus. In disaJSSing the various saf8 hartJors, hJ Secretary repeated !he theme that. payment prac:tice wi! no( rail wiIhIn a safe haItIor when • is dud 10 studIIIM mcruifmenl For exanpe:

• salary adjustments based on success in sea.ing 8f1IoIImenb remain prohibited; • denial of cost of hing ina'e as 'I lied ao sIUdent Jea\iCrnenC RmiIIn pi 00ibif0d; • 8 thIn:f party marteting ftrm flat pays lCs employees on Ihe basis of adIvitIes IeIaIed to

recruIment. admissions. enroIJmenC or IInandaf aid alSo \ttoIates the prohibition

67 Fed. Reg. 67()56..87057 (Nov. 1. 20(2).

Applying this guidance to UOP's system or reauner salary c:ompensation, we find that ~:

• twas b RICtUifBrs with the promise of b:ratIw ~ for success in sec:umg 8111'D11man1s; .

• mallllall iS • racrulDr evaluation and say system hit pn:Mdes IncaiIIYe payments based ~ direcIty and InchdIy on succeSs In seamg enraIments;

• provides subttantiII h':enIIYes ~ lis stair ~ reauIt unquaIIIed .tudents and fIudents who cannot benefit from Ihe training oIrered;

• systemaIIcaI)' and IntIntioflaly operates In • ~ manner so as to violate lie Departmenfa prohibition against IncenIve oorr.,ensaion whIe evading detedioIL

~. UOP is In direct violation fA §487(a)(20) of the ~ Education Ad..

..

Progi ... " R.evt8w tt.pon. PRCN 200S40822254 ~ of Pbo.nb. Phoenbr. AttzanII Page 30

7 REQUIREMENTS

The I9qlinIments he4'ein apply kJ all UOP nstitutons. intUfng lJnIvfntty of Phoenix. UIWeraly d PhoenIx On line rnI Wostem IntematIooallJnhersity.

In response to Ihb Program Review Report. UOP Is required ~ make IUbs1antiaf and Wi'ipeheit3tY'8 changes 10 the 68I8Iy ~ 1ySW'n for its recn.itens and Ihc* dhct ~ It roost!*O PfO'I\de 1he spedflc doo.mants end ~tbll"lon specified below. OOPs respon6O n.s Induda:

• poIide$ and proc:edwes for notJryIog and IraIrIklg Its rec:nItIn. admIssklns managen and adnissians chctots 0( !he ~ rule pa:ll:llit!lil any cornmIa:sJoo, bonus, Of oIhef Inoemtve ~ basecl dlndy or IIICbc:t1y upon 5UOC8SS In sectmg enrolments Of ftnancfaf aid 10 any pe~ or entity engaged ~ My AIdent rocNt!ng or adrrWssion actMIies;

• poIIdes nd ~ fcf any ~ 01 UOP to notify Iht Deplwtrnent dindy and oouiidenlaly, by c::ontacting 1he San fr.Jndsoo Case ~nt Team of any plan Of ~ thai prtMdes any c:ommissIan. bonus or au- hc:entIYe payment based dIredIy ()( IndiredIy upon &UOCe$S il sec:urfrlIJ eMlIments or ftnandaI aid tl any person or entfty engaged WI any student reaufIIng or admission ~

• poIdes and procedwes specffically proyIdhg !hal ..., r'8IaIation shel be made against any such e~ who provides the noIific:Bticn wtrlf1ed ebove.

Doc:tIments md Infotrmtion to Be PrwIded.

1. Salary H"1SIary Report. UOP is 10 condud 8 rovIew of its salary re<X)f'ds fer all ~ (boCh UOP and WIU) eogaged In any student reaUting or admission adMIIes on or after SepI8i.m 1, 199810 1he data db ~ and ~ a salary history report lor aI sudi employees. Indudmg adirissions ~ and rren&gef&. Such report must be in either EJcceI or A.ccess fonnat and be provided eIedn:ri::aIy. ~ b1h the foIlcwtng information w\1h respect to each such ~

a laslName b. fbtName Co Soaal Security NurOOer d . Date of him and position for which tthId o. Begilu lillg salary f. Date and amour( d eadI salary d\cwlgB 9- Arnc:Mn of each &aaty change h. Each position held at UOP and .... begIi .......... nnl(j date for each posI6oo L ~'s c:urmrt status (a.rrenI ~ terrilated.. leave of abseooe) ~ For t.trn"*laled ~ the date of teI.i'lfJ6on

2. Monthly StartsIEwoIment Report for each recnfter empIo)'ecI by UOP or WIU for aI emptoy8e$ engaged In any student rocrUIng or ad! ,isalo' adIvftIes on or aft2r SepIem>er 1. 1998.. Such report rJJJS4 be ... eIIher Excel or AcJoess formal and be provited eIecIronIcaDy. ~ forth the fobmo I(lfofmstion with respect to each such 8f1ll1oyee:

: ..

Pn9wn RMIw fWpod, PRCH 211OU01222S4 Untv-dy at PhOll'lb. PhoenIx. ArbDna Page 31

a. last Name b. FntName c. Soda! Secultty ~ d. Month and Year e. NurriMlr r# erutJIIments for each month

3. ~~' Managers and Dft'eciors' Ooanentatlon uaed on Clf after SepterrDer 1, 1998 10 lhe presanC, kdJding traIOOg maIertaIs, Insfrudklns, menIOI-1Cfum" chafts or any oCher doaments !hat wete proytded 10, used by sndIor WIIf'8 k1 eIIed for the pwpose d gWding or lnstrudIng ~ dIrectas and Iaose InYoMd ~ naoagement as 10 how to evaUa18 any e~ In Ihe posi6on cI: ellor.'i8I1t 01 admissions counselor, academic CIOtI'JSeior. hndaI r.tab spedaist., re-enIry oounseIor, 1nc*Jdng, but nat Iinltod to thIt"kef and III iTll8fi'IOIailda ~ emallraIlSnllittilg Ile same used to Instruct manageB with respect to the rating of vartous fadors IstBd on any evaki9tion form. matrix and/or oIheI doaJrneri. used In ~ evalJations..

... Admissions Counselon> and Admissions NanagIn and Oiredont' Matrtxos k'I etJect on or after SeptentJer 1, 1998 to the present. ~

5. Student SlaWs R.epOO for III s1udents from ad after ~ 1. 1999 10 the present.. Such report &hoIJd set forth the following on a fiscal year basls by IocaIIon:

a. Toial enrdIments b. Total nurrber 01 slUdell'ts In each status tracked by UOP and W1U. indudIng

students who have the sIat1Js ~ ~ c. Total rumer of students enoIIed wt-o have not attendi!d to the stxty days prior

to your te:sponSe d. ToI.Id numbef" 01 studefrt:s who have not aueoded fur 180 days or mont prior to

ycur nJSpoflSQ

6. C<IpIes of any and all doa.ments, from 0( aft« Septembe( 1, 1998 to !he dale 01 your rnsponse. including emaiIs. memoranda, letters aod any ather ~ addressklg awards, boraJses or iloentive ~ provided 10 eny person 01 entity engaged In ent su:ient reauitilg Of admission adM1ies. k1ducIng, but not Itrit8d 10, SperI1g tr1J awards. gift cer1IfIc:ates, Ir\lS. hotel stays provkIed 10 On line recna'aets In 2003 and electronic equpmenl

7. ElcpIanatIon of and lJ listing of at "Iu~ 500( paymeoCs made hlm and aflllr Soptembor 1, 1998 til !he present. 10 8fP/ person « entity engaged In any studdnt rvouItIng or admissaon adlvlbes.

a. PIeaso spec:ifk:aIIy expQIn the ~ ~ Mm amcuIts paid 10 !he fbIowfng employees, se&lg bth In yow- eXJIIarIIIIIon Ih8 basis 01 such pII)'1'n8f'f. Piease atso ptOYide a Q)p)' of the full pensmnaI fila ror eadl of the ~ ClfI'1)k7yees:

~l~~ I b l(6) 1,,,,,61 - U b\(6' I

I I II I I II I

--IL--JL---J

Prey.,i Rftt.w ~ PRCH 2OQ3.4O!IZ7254 UnMftlty of I'howIb, PtIOeIIIx, Artzona Pag&32

[bHo) ~ . . . - - l~r-i II II I II II I II II I II II I

I. II II I .-~~~

9. AIIached to INs mport as Appendbc B is a 1st 01 UOP empIO)'ees_ In your response. pnMde • 00fJ'I d!he ful pononneI file. .. ~ and matrtxes and al documents

1ndNIduals'1Ies liI_rt • .., by .. COrpcnte OpeIaduils MIwlaget". Nc*I: aI ernpIayees ide! IIIiad h fill &bolla ant abo on Appeodix a'

spreadsheeIs.~ by Ihe CorporaIe OperatioilS MeNger, hit sets btl recruiter stJIaIy and evakJaIIon data fer each recruIIer, from 999 tIroogh h daJe of yaJf respcne. (Copies 01 two sudl spteadstleeJs.

coYemg ~ d.1ho 2003 FIscal Year, enIded "Onrne Rep Conl» 03.xIs' and "On Ground REPCOMP 3.JCb" were pnMded b !he nMewars dumg the site 1Iisjl)

Appendix B: Ust of Employees for When Personnel Records .... to be Provtct.d

UnlYarslty of Phoenix Prognm RevIew Report AppendIx B. Page 2

untvwslty of Phoentx Program R8'Mw Report AppendIx B. ".3

UnIversIty of PhoenIX Program Review ~ Appendix B. Page ..

Unlwraity of PhOCN1lx Pn9'am RaWM Report Appendix B. Page 5

UnIYerdy 01 Pboentx Pnlgiam ReYIew Report AppeftdIx B, Page II

UnIversIly 01 Phoenix Program R.m.w Report Appendix B, Page 7

Unlvarstty of Phoenix Progranl RevMrw Report Append1x B. Page'

Unlwrstty 01 PhoenIx Progrwn RevIew RIport Appendix B, Page 10

UrMnIty of Phoenix Progi .'1 RevIew Repoft AppendIx B, Page 11