s UNIVERSITY

COMMITTEE ON FACULTY AFFAIRS

MICHIGAN STATE UNIVERSITY

Michigan State University 321 Administrative Building

East Lansing, Ml 48824-1046

517/355·9271

March 31, 2015

MEMORANDUM

TO: Dr. June Youatt, Provost .

FROM: · Dr. Phylis Floyd, Chai~~ SUBJECT: Recommendation for 2015-16 Faculty Merit and Market

Pool Increase

The University Committee on Faculty Affairs (UCFA) recommendation for the faculty merit and market pool increase in the 2015-16 academic year continues to be developed on the basis of the following principles:

• recruitment and retention of high quality faculty; • maintenance of the quality and integrity of our academic program; • recognition of faculty productivity as enrollments and competitive

pressure for grants escalate; • maintain and increase faculty morale.

There is also a concern about the long-term impact on faculty compensation with the ongoing· erosion of university-funded health benefits, including:

• for all faculty, as of July 2002, initiation of health care premium sharing; • for new hires as of July 2005, elimination of funded post-retirement

health care coverage for spouses; • for new hires as of July 2010, elimination of funded post-retirement

health care coverage; • the substantial increase in additional premiums for Community Blue

and long-term care premium; • long-term implications of the Affordable Care Act which increase the

importance of salary as .opposed to compensation benefits.

Over the past decade, UCFA has used our relative position among Big Ten universities as a key indicator of the university's performance in upholding principles identified above. In 2014, UCFA recommended only a 4.0 percent increase in the general merit pool, and a 1.25 percent increase in the market adjustment pool. The actual average point in time increase of 1.9 percent ended up below the average increase among the Big Ten (Table 1).

MSU is an atfirmalive·action. eqwl-opporlunity inslitulion.

UCFA March 31, 2015 Page 2

As of 2014-15, MSU faculty salaries rank 13th (of 14 institutions) in the Big Ten, three positions lower than it occupied in 2003-2004. In the interim years, MSU was able to rank as high as gth in the Big Ten, but was unable to sustain that position due to adverse financial circumstances (Table 2). These same circumstances, however, would have also affected our peer institutions in varying degrees. By matching the anticipated Big Ten average increase, and adding a catch-up allocation, our goal was and continues to be to reach the middle of the Big Ten. Due to financial circumstances, over the past decade, this goal has not been achieved.

Significant environmental and programmatic changes also impacted compensation variables over this period. As noted on page one, post­retirement healthcare was eliminated for new employees in 2010. This change now impacts 22 percent of the faculty diminishing MSU's total compensation increases. Also Maryland and Rutgers were added to the Big Ten. In both instances, salaries are higher but lag cost-of-living differentials.

With stabilization of financial conditions, we recommend a 4-percent increase for the 2015-16 general merit pool. Based upon the two previous years, average Big Ten salaries have increased between 2 to 3 percent. The narrow salary differences between MSU and Big Ten, peers just above and below it, suggests that a 1 to 2 percent increase above the Big Ten will at least maintain our position at 13th out of 14, and perhaps allow us to move up slightly.

Given that the faculty has steered the university through difficult economic times with increased productivity in teaching, service, outreach and administrative demands while maintaining the institution's academic quality, the committee believes these efforts should be acknowledged by merit increases near the norm for a majority of the faculty. Thus, UCFA recommends that for the 2015-16 year the MSU funding pool, entitled "College Market Increase" of previous years, be discontinued in order to free up funding for wider faculty support.

UCFA also recommends a Provost's Market Adjustment Pool increase of approximately 1.25 percent. Market guidelines should be similar to previous years, focused on retaining and rewarding our excellent faculty. It is also understood that central university support will be made available to ensure that promotional increments are commensurate with previous years.

UCFA March 31 , 2015 Page 3

Increased state appropriations in this coming year, while smaller than in the previous years, should be used to increase MSU's competitiveness in terms of attracting and retaining faculty excellence, as well as to increase faculty morale.

Attachments

Table 1: Big Ten Faculty Salary Rankings for 2014-15 by Faculty Rank with MSU rank over time.

Table 2: MSU Rank in AAUP Big 10 Institutions for Faculty Salary with MSU rank over time.

TABLE 1: FACULTY SALARY COMPARISON Big Ten Institutions Fall 2014

Professor Associate Assistant Wght'd I I Avg Avg Change IHC Avg Comp Rank HC Rank HC Rank IAvg Comp Rank Institution Comp Como Prior Yr.:

Northwestern U 595 $187,395 1 283 $120,598 1 237 $106,863 1 $153,323 1 4.0% U Michigan-Ann Arbor 1076 $160,871 2 569 $106,762 3 540 $91,351 4 $129,599 2 2.6% U Maryland-College Park 673 $154,210 4 464 $107,595 2 332 $92,578 2 $125,557 3 8.5% Rutgers St U-New Brunswick 806 $154,527 3 534 $102,278 4 480 $80,726 11 $119,733 4 -1.5% U Illinois-Urbana-Champaign 806 $149,139 5 555 $99,318 5 457 $91 ,928 3 $119,548 5 1.9% Penn St U-Main 844 $146,998 6 • 524 $99,191 6 395 $87,247 6 $11 9,402 6 4.0% Ohio St U-Main 965 $142,213 7 756 $96,135 7 506 $85,180 7 $113,612 7 2.1% U Wisconsin-Madison 755 $128,125 13 251 $95,781 8 360 $84,869 8 $110,782 8 3.7% Indiana U-Bloomington 669 $134,971 11 512 ·$92,386 12 341 $87,692 5 $110,053 9 2.4% U Minnesota-Twin Cities 674 $135,290 10 524 $93,622 10 432 $84,864 9 $108,531 10 -0.4% Purdue U-Main 852 $130,326 12 576 $92,497 11 498 $81,511 10 $106,391 11 0.2% U Iowa 484 $136,656 9 421 $91 ,681 13 321 $78,854 13 $106,078 12 1.4% Michigan St U 824 $139,515 8 606 $93,742 9 634 $74,174 14 $106,005 13 1.9% U Nebraska-Lincoln 463 $120,841 14 301 $83,566 14 238 $80,085 12 $99,963 14 1.7%

Average w/out MSU $144,363 $98,225 $86,280 $116,327

MSU Rank in AAUP BIG10 Institutions for Faculty Salary

Rank 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13·14 14-15 Professor 11 10 9 9 10 10 8 9 9 11 10 8 Associate Professor 7 7 8 8 7 7 5 8 6 9 9 9 Assistant Professor 13 13 13 14 14 13 14 13 14 14 14 14 All Ranks Average 10 10 10 · 11 11 11 9 12 12 13 13 13

Note:

1) Rankings over time have been recalculated to include Rutgers and Maryland's addition to Big 10.

2} Recall the AAU study is based upon a point-in-time comparison of the eligible faculty and thus omits

retirees from the previous year and includes new appointees. For MSU, if a constant population

was analyzed, a 3.48 percent increase would be reflected.

Source: OPB and AAUP faculty salary survey data obtained through AAUDE warehouse .

TABLE 2: FACULTY COMPENSATION COMPARISON Big Ten Institutions Fall 2014

Professor Associate Assistant Wght'd I I I I Avg Avg Change

HC Avg Comp Rank I HC HC IAvg Comp RankRank II Rank Institution Comp Comp Prior Yr.

Northwestern U 595 $236,761 1 283 $158,270 1 237 $141,066 1 $196,499 1 3.9% U Michigan-Ann Arbor 1076 $196,099 3 569 $135,205 . 3 540 $117,126 5 $160,724 2 2.6% Rutgers St U-New Brunswick 806 $199,618 2 534 $141,179 2 480 ' $116,988 6 $160,679 3 6.4% U Maryland-College Park 673 $187,012 5 464 $134,504 4 332 $117,663 3 $154,754 4 6.9% U Illinois-Urbana-Champaign 806 $188,001 4 555 $131,055 5 457 $122,594 2 $154,175 5 2.9% Penn St U-Main 844 $184,715 6 524 $127,747 7 395 $111,975 7 $151,486 6 4.0% U Minnesota-Twin Cities 674 $178,180 8 524 $129,197 6 432 $117,512 4 $146,354 7 0.1% Ohio St U-Main . · 965 $176,494 9 756 $122,866 10 506 $109,848 10 $143,146 8 2.6% U Wisconsin-Madison 755 $160,337 13 251 $124,051 9 360 $111,567 8 $140,817 9 3.4% Michigan St U 824 $178,701 7 606 $126,355 8 634 $99,967 14 $139,147 10 0.6% Indiana U-Bloomington 669 $167,012 11 512 $116,091 13 341 $109,916 9 $137,090 11 1.7% U Iowa 484 $175,348 10 421 $118,685 12 321 $102,157 13 $136,727 12 1.3% Purdue U-Main 852 $162,505 12 576 $121,031 11 498 $107,048 11 $135,762 13 -0.4% U Nebraska-Lincoln 463 $151,752 14 301 $109,459 14 238 $104,466 12 $127,816 14 1.9%

Average w/out MSU $181,833 $128,411 $114,610 $149,694

MSU Rank in AAUP BIG1 OInstitutions for Faculty Compensation

Rank 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Professor 8 9 9 9 9 8 6 8 11 9 8 7 Associate Professor 4 4 3 5 4 6 6 7 6 5 6 8 ' Assistant Professor 6 7 9 10 10 10 10 10 11 12 12 14 All Ranks Average 6 7 6 7 7 7 6 10 13 9 9 10

Note:

1) Rankings over time have been recalculated to include Rutgers and Maryland's addition to Big 10.

2) As of Fall 2014, average compensation is adjusted to include only faculty eligible for post-retirement health,

resulting in a constrained percentage change.

Source: OPB and AAUP faculty salary survey data obtained through AAUDE warehouse.