UCLA Faculty
Association Newsletter, Fall 2006

UC SHADOW SALARY
SCALE

 

The UC Academic Personnel
Manual states:

In order to preserve the significance and
values of the salary scales, salaries should be on-scale to the greatest
extent feasible. Nevertheless, when properly justified, appointment or
advancement to a position with an off-scale salary may be approved in
exceptional situations… (APM 620-0-a).

 

In Oct. 2005, at UCLA,
Letters & Sciences, 97% of Assistant Professors were Off Scale; 94% of
Associates; and 82% of Full Professors were Off Scale.
In 2004-5, UCLA made 49 new faculty
appointments, with 46 receiving Off Scale and 3 Above Scale.  UCLA is not
alone among UC campuses in using Off Scale for other than “exceptional
situations.” With inadequate salary increases over the past decade, UC
campuses are scrambling to develop policies that work in the background of the
UC Salary Scale to maintain competitive salaries. These campus policies are
sometimes called “Shadow Salary Scales,” but the true Shadow Scale is now the
UC Salary Scale itself.

 

State Compact and
UC Salaries

For the past two years,
the state has honored its Compact with UC and funded an increase for employee
salaries. This year the Governor funded 4% or 1% more than UC expected. But UC
awarded only a 2% COLA to faculty, while giving 4% total salary increase to
covered staff and upper level managers. Even though increased state funding to
UC for salaries has followed or exceeded the Compact funding for the last two
years, UC has allocated the Compact funding in lesser amounts to faculty than
to some staff and upper level managers.

 

Compact funding is far
lower than the state calculates UC faculty need to maintain competitive
salaries with comparison institutions. And there are no catch-up provisions in
the Compact for UC faculty to regain competitive salaries in the next ten
years. In 2005-6

UC faculty salaries were
about 14.5% below those of their peer institutions, and it has been about 12
years since salaries were at the target level (the midpoint between 4 private
and 4 public comparison institutions). During this 12 year period, state
funding for higher education has declined in favor of higher funding for state
services to the poor, for K-12 education, and for the prison system. Student
fees have risen but not in proportion to the cost of providing a UC education,
and the state has kept student fees low in favor of increased access in
keeping with the California Master Plan for Higher Education. Low student fees
also means a lower cost to the state to buyout any increases, which is also
bad news for those who believe higher student fees would fund parity in
faculty salaries. In the period 1985-2005, the proportion of the overall UC
budget from the state general fund was cut in half, from about 50% to about
25% of the overall university budget.

 

UC Salary
Methodology: Steps & Ladders

The state’s Compact and
UC’s recent funding decisions disregard the salary methodology for UC faculty
approved by the state several decades ago.  This methodology has at its core
salary ladders with higher salary levels at each higher step.  Some colleges
and professional schools have their own ladders: L&S; Business & Engineering;
law; and medicine. In the UC system when faculty receive merit advances and
promotions, they climb up the salary ladder. The only way the dollar amounts
of the actual steps of the ladder are increased is with a general COLA; each
step in the ladder is increased by the same amount (excepting some minor
variations at different ranks and steps). The amount of that COLA–the CPEC
lag–is calculated annually in Sacramento by the California Post Secondary
Education Commission (CPEC) by comparing UC faculty salaries with the faculty
salary increases of 8 comparison institutions.

 

Ideally all faculty would
receive competitive salaries for their position on the Salary Ladder and a
market lag increase every year, which would mean that UC salaries and the
Salary Ladder stay at their target level. Merit would be rewarded with market
level increases, and the salary methodology and funding would be transparent.
But for the past 12 years, the UC COLAs have been less than the CPEC lag.
When there is no COLA or faculty parity increase, then the CPEC lag increases
for the next year, and the Scale falls further behind. Yet, every year UC
average salaries have increased not with COLAs or increases to the Scale but
with Off-Scale increments. Because UC Ladder Salaries are not at competitive
levels, to remain competitive, UC campuses have had to resort to Off-Scale
increments to bring salaries to market level. Even including Off-Scale
increments in the average salaries, which CPEC does in calculating the lag, UC
average salaries are still about 15%

 below comparison
institutions. If there were no Off-Scale supplements, the UC average salaries
would be about 30% or more below market level.

 

Off Scale
Rebalances Sagging Salaries

The results of the
current situation are clear. In the absence of market level salary increases
and a Salary Scale that has not reflected market conditions for over 12 years,
pressure is on to use other kinds of non-salary resources to offer necessary
increases. Deans and chairs are forced to use Off Scale to make up for no
salary increases. They have turned into compensation specialists whose time
and energy are increasingly taken up with the allocation of scarce non salary
resources to over 85% of the faculty on the basis of recruitment and
retention, basic equity, and other financial and merit factors.

 

In some instances, Off
Scale has been used to rebalance salary inequities between those who receive
large Off-Scale increases with those who only move up the Salary Scale.
Another strategy to cope with a stagnant Salary Scale is to use one year
accelerations. Some chairs put faculty forward to the next step on the ladder
on the grounds of merit but with the understanding that lack of any range
increase is also a contributing factor in approving this one year
acceleration. Without this advance up the Scale, a professor might have to
wait 2-3 years between merit reviews, during which time s/he would have
received no COLA or inflation adjustment. If inflation were 2% for each of
those years, the loss is equivalent to 6% of the value of his or her salary
during the period between reviews. Therefore, a short step up the Scale
compensates for no Scale increases.

 

How much to award faculty
in Off-Scale increments varies by chairs at the department level and by deans
at the division level. There is no generally accepted policy. If a faculty
member is being promoted from one rank to another, some deans might calculate
the percentage that faculty member is Off Scale and preserve that same
percentage Off Scale at the next rank. Such a policy results in preserving the
level of Off Scale throughout a career. Another dean might calculate the
amount between the current step and the next step on the ladder and increase a
faculty member’s salary by that amount. With a stagnant Salary Scale, this
policy would result in disappointment for the faculty member. If the Scale
were adequate, this policy would eventually lead to the faculty member
returning to scale since the amount between steps is generally much less than
maintaining an Off-Scale percentage.

 

UC Campus Salary
Policies

Campuses are beginning to
act individually to address their own salary needs. They vary in their
academic reputations and hence in the salaries and Off-Scale increments
required for recruitment and retention in the absence of adequate increases in
the UC Salary Scales.  For example, September 2005 salary data shows that UC
Irvine offers Off-Scale increments to the largest number of faculty across all
ranks (76%) and UC Davis the smallest (64%). UCLA offers the highest average
dollar amount across all ranks ($21,639), while UCSC offers the lowest
($6,630). (www.universityofcalifornia.edu/
senate/underreview/ucap.merit.0806.pdf. )

 

As noted in the winter
2005 FA newsletter, Berkeley has instituted a number of programs to address
the failure of the Salary Ladder to reflect market conditions, including a
separate comparative scale based on Berkeley’s actual comparison institutions,
a promotion increment of $6,000 awarded to assistant professors upon receiving
tenure, and additional research funds for older faculty as an incentive to
retire. UC Irvine’s salary policy is based on the actual median salary at each
rank and step on the ladder to determine the amount of the Off-Scale increment
needed to bring those faculty whose salaries fall below the median up to the
median.  Such a policy ignores the published UC steps and scales and
concentrates on the actual median salaries, including both On Scale and Off
Scale.

 

Funding Off Scale

The funding for Off-Scale
comes from a variety of areas, but mainly from state allocated 19900 FTE
funding for new student enrollment. Instead of hiring more faculty to teach
new students, UC employs adjuncts, part-time lecturers or just lets the
classes get larger and larger. This year, some of the 2% salary increase that
the faculty were not given may be used to hire these other academics to teach
those new students and provide further funding for Off Scale. This funding
policy results in a higher student faculty ratio, which in 2005-6 was 19.5.
The UC Regents have set a goal to return to 17.6:1, but the Compact

does not provide funding
for any such improvement.

 

What Should UCLA
Faculty Do? 

The first step is to
become better educated about what it means for faculty salaries to fall so far
behind market level. Last fall, the
Faculty Association requested from the Office of the President the complete
salaries of all senate faculty, breaking out Off-Scale and On-Scale
components, excluding health sciences and pre-clinical, at all of the UC
campuses as of Oct. 2005 (we increased the Sept. 2005 data by 2% to reflect
the COLA awarded Oct. 1) and Oct 2000. In this newsletter, we concentrate on
2005 UCLA salary data for Letters & Sciences, but similar salary data is also
supplied for Business & Engineering in the Appendix so that we cover the
greatest number of faculty. It is the goal of the Faculty Association to
present information about how Off Scale functions so that faculty can discuss
the current Salary Scale and Off-Scale policy in campus and systemwide Senate
committees with some of the necessary information and overview.

 

The FA is interested in
the reactions of the faculty to this information (email us at

ucfa@eathlink.net). We would also urge faculty to join the Faculty
Association, an independent association of senate faculty in existence since
1973, which collects and shares information about wages, benefits, and other
working conditions at the University of California with FA members, Senate
faculty, the Regents, UC administrators, and California legislators. An
application to join the Faculty Association is on the back page of this
newsletter or visit our website at

www.uclafaculty.org.

On Scale vs Off
Scale L&S 2000 & 2005

Let’s look more closely
at UCLA salaries. We begin with a profile of faculty salaries in the Division
of Letters & Sciences at UCLA in the fall of 2005, just after a 2% COLA
effective October 2005.

Please refer to Table 1
below.

 

The percentage of faculty
who receive Off-Scale increments is high, hovering above the 90% range for
Assistant and Associate Professors and above the 80% range for Full
Professors. The weighted average salaries for faculty at every rank in L&S are
Assistant Professors $70,203, Associates $82,544, and Full Professors
$119,030. If all faculty were On Scale, the averages would be about $16,000
lower for each rank: $54,313 for Assistants, $63,016 for Associates, and
$98,252 for Full Professors. The difference between actual Salary Averages and
Scale Averages indicates how low the Scale has fallen, and even these actual
Salary Averages are about 14.5% below the market for UC faculty. With so many
faculty Off Scale, the issue is no longer On Scale versus Off Scale; it is the
ad hoc way Off Scale is allotted.

 

In the FA data shown in
Table 1, about $4,000 separates the weighted average amounts Off Scale at each
rank. For Assist. Profs the weighted average Off Scale is $16,331 (or 30% of
Scale), for Associates $20,871 (or 33% of Scale), for Full Profs, $25,444 (or
26% of Scale), and Above-Scale faculty $29,876 (or 23% of Scale). Although the
%s of faculty Off Scale are in the 90% range for Assistants and Associates,
the average amounts Off Scale as a percentage of Scale at all ranks range from
28% to 33%, with Above Scale at 23%. To some, that could look like almost a
third of the salary is in some form of bonus or extra. As a % of actual salary
the Off-Scale percentages would be lower.

 

The Average Salaries and
Average Off-Scale amounts vary considerably by Division. The Humanities, Life
Sciences, and Physical Sciences are generally fairly close together in both
Average Salaries and average amounts Off Scale at every rank. The Humanities
may offer the lowest Average Salary for Assistants, but Life Sciences offers
the lowest for Associate and Full Professors, while

  

Table 1: Letters &
Sciences, October 2005

 

 

			#		Av Salary		# On		# Off		Avrg $Off
Assist. Prof	Humanities		28		$63,874		3		25		$10,696
	PhysicalSci		25		$66,643		0		25		$12,023
	Life Sci		22		$66,727		0		22		$12,381
	Soc Sci		36		$79,722		0		36		$25,649
			111				3		108
Wtd avrg					$70,203						$16,331
% Off/scale									97.30%		30.21%
Assoc. Prof	Life Sci		13		$73,605		3		10		$14,408
	Humanities		45		$76,779		4		41		$14,428
	PhysicalSci		24		$77,333		0		24		$15,100
	Soc Sci		58		$91,178		2		56		$29,217
			140				9		131
Wtd avrg					$82,544						$20,871
% Off/scale									93.57%		33.12%
Full Professors
	Life Sci		60		$108,771		16		44		$16,531
	Humanities		121		$110,086		35		86		$16,648
	PhysicalSci		87		$110,900		20		67		$15,976
	Soc Sci		125		$138,271		1		124		$39,830
			393				72		321
wtd avrg					$119,030						$25,444
% Off/scale									81.68%		25.90%
Above							84		560
	PhysicalSci		53		$151,990						$21,090
	Humanities		19		$160,140						$29,240
	Life Sci		14		$165,333						$34,433
	Soc Sci		32		$173,712						$42,812
			118						118
wtd avrg					$160,776						$29,876
% Off/scale			762								22.82%

*weighted averages are
calculated by multiplying the number of faculty by the average salary

at that rank for each
division and then dividing by the total number of faculty at that rank in all
divisions.

 

Physical Sciences
allocates the lowest for Above-Scale faculty. The average Off-Scale awards in
the

Social Sciences Division
are significantly higher (double or more) at every rank than for the other
Divisions in L&S.  At Above Scale, the gap between the Social Sciences and the
other Divisions narrows somewhat, although Off-Scale supplements in Social
Sciences are still considerably higher.  Within Social Sciences, Economics
pays significantly higher amounts Off Scale for every rank than the other
departments. Economics may be the main driver for generally high Social
Sciences Off-Scale increments, but at many ranks and steps, Political Science
and Sociology offer just as high or higher Off-Scale increments than
Economics.

 

The FA data show Average
Salaries at rank quite a bit higher than the AAUP or CPEC figures published

in their annual survey
even though both of these surveys included faculty on higher Salary Scales in
Bus & Engr, while the FA data counted only professors on the L&S 9-month
academic Salary Scale.  With so many different surveys arriving at so many
different salary averages for so many different purposes it is no wonder that
reporters, legislators, and citizens are confused about UC compensation
practices because at the faculty level they don’t pay attention to or
understand the different categories of professors and the different Salary
Scales.

 

 

In 2005 the number of
faculty in L&S receiving Off-Scale increments may seem high, but it was also
high in 2000. Table 2 below gives a similar profile of L&S in 2000.

 

 

   

Table 2

Letters &
Sciences, October 2000

Rank/Step		Division		#		Avrg Salary			# On Scale	# Off  Scale			Avrg $Off   Scale
	Assistant		Humanities		23		$54,587	6				17		$4,712
			Phys Sci		19		$57,242	1				18		$6,711
			Life Sci		19		$57,316	2				17		$6,871
			Soc Sci		39		$62,926	0				39		$12,467
					100			9				91
	wtd avrg						$58,862							$8,834
	%Off/scale											91.00%		17.38%
	Associate		Life Sci		14		$67,829	3				11		$9,827
			Humanities		45		$64,193	15				30		$6,830
			Phys Sci		22		$66,309	1				21		$7,629
			Soc Sci		47		$73,811	6				41		$17,061
					128			25				103
	wtd avrg						$68,486							$11,386
	%Off/scale											80.47%		19.19%
	Full Prof		Life Sci		67		$96,105	31				36		$10,387
			Humanities		113		$92,099	56				57		$10,844
			Phys Sci		90		$101,488	39				51		$10,540
			Soc Sci		106		$107,131	15				91		$22,485
					376			141				235
	wtd avrg						$99,298							$15,216
	%Off/scale											62.50%		16.95%
	Above		Phys Sci		51		$137,483							$13,283
	Scale		Humanities		21		$137,614							$13,414
			Life Sci		9		$139,607							$15,407
			Soc Sci		28		$145,107							$20,907
					109
	wtd avrg						$139,642							$15,442
	% Off/Scale				713							100%		12.43%

About 91% of Assistant
Professors received an Off-Scale increment in 2000, 80% at the Associate
level, and a drop to 63% at the Full Professor rank.  The increase in numbers
of Off-Scale faculty in the higher ranks between 2000 and 2005 reflects
faculty with Off-Scale increments rising in rank during this time period.  The
same trend will continue in the future and the proportion of faculty with
Off-Scale increments will continue to increase.  The average amounts Off Scale
in 2000 are still about $4,000 between ranks, but Above-Scale faculty received
about the same Average Amount Off Scale as Full Professors.  The average
amounts Off Scale as a percentage of Scale increased about 40% from 2000 to
2005.  Also visible in 2000 is a big salary leap from the Associate rank to
Full Professor—about $36,000, similar to the difference in these ranks in
2005.

 

Social Sciences also held
a dominant position in 2000 among L&S divisions in Off-Scale amounts. The
Average Salaries for Social Sciences faculty are higher at every rank, but the
difference between divisions has increased in 5 years mainly due to increased
use of Off Scale.  For example, in 2000, the average Off-Scale supplement in
Social Sciences for Full Professors was $22,485, whereas for the other
divisions it ranged between $10,387 and $10,844. By 2005, the difference in
Social Science Off Scale increments jumped to $39,830, whereas for the other
divisions ranged from $15,976 to $16,648.  During this period, while On-Scale
salaries were essentially flat, average salaries did increase because of
higher Off-Scale increments.  But this meant that additional resources that
otherwise would go to academic programs had to be diverted to provide funding
for ever increasing Off-Scale increments.

 

All divisions show a
significant shift in the numbers of faculty receiving Off-Scale increments.
For example, in 2000, in Humanities 17 out of 23 Assistant Professors were Off
Scale, but just about half of the faculty were Off Scale at the Associate and
Full Professor ranks. By 2005, 25 out of 28 Assistant Professors in Humanities
are Off Scale, 41 out of 45 at the Associate rank, and 86 out of 121 Full
Professors are Off Scale. Such a dramatic shift Off the Scale shows the
greater dependency on Off Scale supplements to support an inadequate Salary
Scale as faculty in lower ranks who already have Off-Scale increments move up
through the Ladder System. However, this shift is also a result of faculty
moving up steps and ranks over this 5 year period.

 

During this time period
the Scale was only increased three times–by 3% in 2000, 0.5% in 2001, and 2%
in 2005 for a total increase of 5.5% in Salaries. During this same period,
inflation increased in California about 17.2%. Faculty moving only up the
Scale lost about 12% of the value of their salary due to inflation. The
long-term consequences of this policy are to weaken the Salary Scale at least
by the annual rate of inflation and to increase the reliance on Off Scale to
make up the difference at every step.  When the Off-Scale increments are taken
into account for the time period from 2000 to 2005, Average Salaries for
Assistant Professors increased by 19%, Associate Professors by 21% and Full
Professors by 20% or slightly more than inflation for all ranks.

 

Sagging Salary
Ladder and Higher Average Salaries

The view of Letters &
Sciences in 2005 from ranks and steps reveals more clearly where Off-Scale
increments are being awarded. Table 3 combines all faculty in L&S and breaks
out the figures by ranks and steps according to the October 2005 Salary Scale,
Average Salaries, and Average Off-Scale increments. The right hand column
shows what happens to Off-Scale amounts and percentages when the top 13% of
salaries are removed.

 

Table 3

Letters & Sciences
by Rank and Step in October 2005

 

Assist	#	Scale	Av Salary		# On	# Off	$ Off	top13%	$ Off
1		$47,200						Less13%
2	10	$49,900	$ 73,430		0	10	$23,530	4	$9,294
3	32	$52,700	$ 67,151		2	30	$15,412	3	$11,498
4	69	$55,700	$ 71,150		1	68	$15,678	3	$14,211
5	0	$58,400			3	108		10
6	0	$61,300
	111
wtd avrg		$54,313	$ 70,203				$16,331		$13,163
%Off/Scale						97.30%	30.07%		24.33%
Assoc
1	23	$58,500	$ 86,026		0	23	$27,526	5	$17,422
2	32	$61,400	$ 78,763		2	30	$18,520	0	$18,520
3	84	$64,800	$ 82,941		7	77	$19,792	4	$16,564
4	1	$68,700	$ 90,168		0	1	$21,468	0	$21,468
5	0	$74,100			9	131		9
	140
wtd avrg		$63,016	$ 82,544				$20,871		$17,212
%Off/Scale						93.57%	33.12%		27.31%
Full
1	34	$68,800	$ 95,187		1	33	$27,185	4	$19,761
2	41	$74,200	101,022		2	39	$28,200	4	$22,269
3	37	$80,200	102,765		4	33	$25,304	2	$22,444
4	41	$87,000	116,539		3	38	$31,870	5	$20,007
5	71	$94,500	111,347		16	55	$21,761	2	$18,431
6	38	$102,400	116,905		8	30	$18,371	0	$18,371
7	34	$111,300	132,510		8	26	$27,742	0	$27,742
8	37	$120,500	142,377		7	30	$26,990	1	$25,042
9	60	$130,900	144,980		23	37	$22,854	0	$22,854
	393				72	321		18
wtd avrg		$98,252	119,030				$25,444		$21,550
%Off/Scale						81.68%	25.90%		21.93%
	644				85	560
Above	118	$130,900	$160,776				$29,876
	762						22.82%

 

In a robust compensation
environment where Scale Salaries reflect the market for faculty salaries of
the quality recruited by the UC system, one would expect

that the Average Salaries
at step and rank would be equal to or slightly higher than the Scale Salaries.
Since faculty progressing up the Scale would linger at a step for 2 or 3 years
before the normal review, there would be slightly downward pressure on the
Average Salary. Upward pressure would come from Off Scale increments for
recruitment and retention. The large difference between the Salary Scale
amount at each rank and step and the Average L&S Salaries at each rank at UCLA
show just how dysfunctional the Salary Scale has become. At the rank of
Assistant Professor Step 2, the Scale Salary is $49,900, while the Average
Salary is $73,430. At Full Professor, Step 1, the Scale Salary is $68,800,
while the Average Salary is $95,187.

 

A few individuals receive
high Off-Scale increments that skew the Off-Scale averages for all other
faculty at that rank and step. For example, Assistant Professors at Step 2
have average Off-Scale increments of $23,530 (or 47.15% of scale), but
removing 4 faculty (3 of whom are in Economics and 1 from Political Science),
reduces the average Off-Scale increments to $9,294 (or 17.71% of scale).  The
average Off-Scale increment for those 4 faculty is $44,884 (or 90% of scale).
A truer Average Salary might be calculated by dropping the top and bottom 13 %
of the salary range, but for our purposes here, the actual Average Salary will
be the average of all faculty in L&S at rank and step.

 

Actual average salaries
do not always rise with step. The average salary in L&S at the rank of
Assistant 2 is higher than the average at Assistant 3 and 4, even though the
UC salary scale is higher at each successive rank for Assistant Professors.
This is also true at the Associate Professor rank, with the average salary at
Step 1 higher than 2 or 3. The expected increase doesn’t come until Associate
Step 4, a virtually unused step. This anomaly is seen at the Full Professor
level as well, for example step 5 is lower than step 4, with steps 4 and 6
almost the same. The average amount Off-Scale at step 6 is a drop from step 5,
which is a drop from 4; a steep rise occurs between step 6 and 7. This same
trend can be seen in Business & Engineering (Appendix), where Assistant Step 2
is significantly higher than Step 3, and the Average Salary of Associate Step
1 is over $10,000 higher than Step 2. For Full Profs in Business &
Engineering, Average Salaries at steps 8 and 9 and even Above Scale are lower
than at Step 7. The discrepancy in Average Salaries dropping at higher steps
shows a high level of recruitment and retention activity at certain steps in
rank.

 

Salary Methodology
Options

In Fall 2006, UCLA finds
itself with a salary methodology where

 

• Off Scale is used on
  an ad hoc basis to rebalance salaries that have not been increased to market
  levels through yearly increases to the Salary Scale.

 

• Average Salaries are
  well below market.

 

• The UC Salary Scale is
  obsolete and misleading about average salaries, merits, and promotions.

 

1.    Current UC
Policy: low COLA and Off Scale Rebalancing

 

An occasional annual COLA
does little to affect the salary lag.
If both salaries and the Salary
Scale are increased by 2%, then there is no change in % or # Off Scale. UC’s
decision to grant faculty only a 2% salary increase in 2006-7 and not 4%,
further erodes the Salary Scale and keeps average faculty salaries
significantly below market. The cost is about $1.7m to offer a 2%COLA and
$3.4m for a 4% COLA.

 

The decision to give
faculty only a 2% increase endorses the current ad hoc system of using
Off-Scale increments to keep UC salaries competitive. It means using non
salary resources to supplement sagging salaries in awarding Off Scale case by
case. It also could mean that when the cost of benefits increases this year
and next, particularly with the resumption of contributions to UCRP, the 27%+
av. increases in health care premiums across all 4 income bands for 2007, as
well as the general cost of inflation, are all factored in, faculty will fall
further behind. The use of Off Scale could further expand to rebalance higher
benefit costs and inflation rates as well as under-funded salaries. This kind
of rebalancing of total compensation in the face of unequal salary increases
raises questions of basic equity across the salary and benefit landscape at UC.

 

2.      Adjust to
the Median

UC has reported that UC
Irvine follows a median salary policy as a reference to determine step and
rank increases. Table 4 below shows what a salary policy would look like if
UCLA used the median salary at every rank and step as the reference amount to
award Off-Scale increments. The cost is calculated as if all faculty below the
median were brought up to the median salary at rank and step by the use of
Off-Scale increments.

 

The median for each
salary step was calculated based on the Oct. 2005 UCLA salaries. Using a
Median policy brings down the number of faculty receiving Off-Scale increments
from 560 to 327, but still leaves 58% Off Scale, lowers the average amount
Off-Scale at each rank, and slightly increases the average salaries at each
rank. 

 

            Table
4: Faculty Salaries Increased to Median at Step, L&S, Oct. 2005

 

Rank/		Median	Avrg	# on	# off	Avrg
Step	#	at  step	Salary	Scale	Scale	$ Off	cost
Assistant Professors
1	0
2	10	65,790	77,438	5	5	23,297	40,086
3	32	62,730	69,315	16	16	13,171	69,258
4	69	68,850	73,798	35	34	9,483	182,682
	111			56	55		$292,026
wtd av		$66,810	$72,834			$11,812
% Off/scale					49.5%	16.81%
Associate Professors
1	23	79,560	90,128	12	11	22,097	94,350
2	32	74,562	80,947	16	16	12,769	69,870
3	84	79,866	87,047	41	43	13,670	344,913
4	1	90,168	90,168	0	1	21,468	0
	140			69	71		$509,133
wtd av		$78,033	$85,537			$14,580
% Off/scale					50.7%	18.68%
Rank/		Median	Avrg	# on	# off	Avrg
Step	#	at  step	Salary	Scale	Scale	$ Off	cost
Full Professors
1	34	88,434	98,937	17	17	21,006	127,500
2	41	96,900	107,110	22	19	22,032	249,594
3	37	99,450	109,071	20	17	20,940	233,315
4	41	107,100	123,057	19	22	29,738	267,240
5	71	102,000	113,855	36	35	23,734	178,092
6	48	111,180	119,541	21	27	11,768	100,164
7	34	127,500	138,324	18	16	23,002	197,676
8	37	137,700	147,672	19	18	20,499	195,942
9	60	136,680	147,528	30	30	16,600	152,898
	403			202	201		$1,702,421
wtd av		$123,267	$112,307			$20,743
% Off/scale					49.9%	19.93%
	654			327	327
Above	118	155,040	164,564		100%	19,564	$438,294
	772					12.62%	$2,941,874

 

 

The cost to bring all L&S
faculty at least up to the Median Scale is $2,941,874.  Bringing all faculty
up to the median salary would have the effect of rebalancing Off and On Scale
to about even at 50%. However, 50% of faculty still Off Scale is not an ideal
situation. A median policy targets On and Off-Scale faculty whose salaries
fall below the median at step and rank and would not affect Off-Scale faculty
whose salaries exceed the median.  For these faculty, more of their salary
would fall On Scale.

 

 

3.      The Fix:
Increase the Salary Scale to Market Level or by 30%

The market lag percentage
for UC Average Salaries in the Fall 2005 was 14.5%, which means that if UC
salaries were increased by 14.5% then they would fall in that target mid
position between its 4 public and private peer institutions. But the Salary
Scale is much lower than the Average Salaries.

 

If the UC Salary Scale
were increased by 30%, then how many faculty would still be Off Scale? How
much would the averages increase? Table 5 below gives some of the answers.

 

 

 

Table 5: Oct. 2005
Salary Scale Increased 30%

Rank/Step			#		Scale	Avrg.  Sal	# On Scale		# Off Scale		Avrg $ Off cost
	Assist 1
	2	10		64,870		77,019	4	6		20,249		35,896
	3	32		68,510		72,659	21	11		12,070		176,256
	4	69		72,410		75,755	42	27		8,548		317,728
	5	0					67	44				$529,880
		111
	wtd avrg			$70,606		$74,976				$11,025
	%Off/Scale							39.64%		15.61%
	Assoc 1	23		76,050		88,774	8	15		19510		63,210
	2	32		79,820		83,834	18	14		9175		162,270
	3	84		84,240		89,542	57	27		16495		554,502
	4	1		89,310		90,168	0	1		858		0
		140					83	57				$779,982
	wtd avrg			$81,283		$87,472				$15,201
	%Off/Scale							40.71%		18.70%
	Full 1	34		89,440		99,461	18	16		21,294		145,302
	2	41		96,460		106,895	20	21		20,374		240,794
	3	37		104,260		111,827	23	14		19,998		335,275
	4	41		113,100		126,561	26	15		36,792		410,898
	5	71		122,850		127,725	55	16		21,633		1,162,866
	6	38		133,120		134,877	32	6		11,125		682,904
	7	34		144,690		148,166	23	11		10,744		532,294
	8	37		156,650		160,525	29	8		17,923		671,494
	9	60		170,170		171,655	52	8		11,140		1,600,520
		393					278	115				$5,782,347
	wtd avrg			$127,728		$133,743				$20,556
	%Off/Scale							29.26%		16.09%
		644					428	216
	Above	118		$170,170		$174,124				$17,945		$1,575,078
		762								10.55%		$8,667,287

 

Increasing the Salary
Scale by 30% affects the averages differently by rank For example, in Oct.
2005, the average for Assistant Professors in L&S was $70,203; raising the
Scale by 30% increases the average to $74,976 or by 6.8%.  For Associate
Professors, the average in Oct. 2005 was $82,544; increasing the Scale by 30%
raises the average to $87,472 or by 5.97%. And finally increasing the Scale by
30% changes the average for full professors from $119,030 in Oct. 2005 to
$133,743 or by 12.36%. On the other hand, the amounts Off Scale are reduced
considerably: Assistant Professor Off Scale drops by 32.49%; 27.17% drop for
Associates; and Full Professor Off Scale drops by 19.21%. The number of
faculty receiving Off Scale drops to acceptable levels: from 97% to 40% at the
Assistant rank; 94% to 40% at the Associate rank; and 82% to 30% at the full
professor level.

 

In Table 5 above, the
cost is determined by the amount of money necessary to bring each faculty
member up the increased Scale on the next merit or promotion.  In this
scenario, some faculty who receive Off-Scale would not receive a salary
increase at their next merit or promotion because their combined On and
Off-Scale salary already meets or exceeds the 30% increased Scale, or the
amount they receive would be adjusted to move them closer to On Scale. The
main effect for them would be to have more of their total salary On Scale. The
costs would also be spread over 3 years since not all faculty would receive
merits or promotions annually—only about 1/3 in any year.

 

Costs of Salary
Methodology Options

The costs of these
different salary strategies can be compared in a broad sense in Table 6 below.
If we look at the salary amounts in the database provided by UC, excluding
health sciences and pre-clinical faculty, we can compare the cost of issuing a
COLA, raising all faculty to the median salary at rank and step, and raising
all faculty over a 3 year period to an increased salary scale.

 

The costs of increasing
all salaries by a 3.5% COLA, bringing all faculty to the median salary at step
and rank are not only remarkably close; they constitute a relatively small
percentage of annual salary costs. Increasing the Salary Scale by 30% or to
market and bringing faculty to market level over 3 years is still only 10.18%
of the total L&S salary expense for 2005-6 or 3.39% annually. By concentrating
on a limited population, 762 faculty in L&S in 2005, one can see that making a
significant improvement in faculty salaries—raising the Salary Scale to market
level—is not much more costly than following a COLA-Off-Scale Rebalancing
strategy.

 

Table 6:

Some Annual Salary
Costs at UC and UCLA calculated in Oct. 2005

 

		Rank	#		Salary cost
Total UC		Assistants	1333		$93,238,029
		Associates	1200		$94,737,288
		Full Professors	3230		$370,046,177
		Above Scale	542		$89,494,000
			6305		$647,515,494
Total UCLA		Assistants	140		$13,499,700
		Associates	213		$18,150,904
		Full Professors	722		$87,147,563
		Above Scale	168		$27,742,080
			1243		$146,540,247
UCLA L&S 2005		Assistants	111		$7,792,494
		Associates	140		$11,556,196
		Full Professors	393		$46,778,780
		Above Scale	118		$18,971,564
			762		$85,099,034
Cost of Salary Strategies for UCLA L&S 2005-6							% of L&S
	Strategy					Cost	Salary total
	2% COLA  increase (annual)					$1,701,981	2.00%
	3.5% COLA  increase (annual)					$2,978,466	3.50%
	Adjustment to Median					$2,941,874	3.46%
	14.5% Scale increase (over 3 yr)					$2,461,319	2.89%
	1 year					$820,440	0.96%
	30% Scale Increase (over 3 yr)					$8,667,287	10.18%
	1 year					$2,889,096	3.39%

 

Rebalancing Total
UC Remuneration Over Next Ten Years: Higher Salaries & Higher Benefits

The decision to award UC
faculty only a 2% COLA in 2006-7 separates faculty from upper level managers
in the plan to rebalance total compensation at UC over the next ten years. The
current UC strategy is to increase salary at the expense of benefits. Funding
for future salary increases will come in part from the state as fulfillment of
UC’s Compact with Governor Schwarzenegger and in part from savings by reducing
active employee benefits. There has been little faculty consultation in
accepting this policy or faculty awareness of the implications of the new
policy.

 

Last year UC hired Mercer
Human Resource Consulting to assess the competitiveness of total remuneration
for UC’s executives (including in the population ladder rank faculty, senior
management and staff at the campuses, medical schools, and UCOP but excluding
UC labs and medical centers) and found that UC’s employee compensation was 15%
below market, health benefits 10% above, and retirement benefits 63% above
market. The closeness of the 15% salary lag to the CPEC lag of 14.5% shows the
influence the CPEC lag figure has for all groups of employees at UC.  In order
to correct this salary-benefit imbalance, Mercer created a policy of restoring
employee salaries to target level by rebalancing benefits and salaries. For
example, in 2007, when UCRP contributions are scheduled to begin, then the
cost of retirement benefits will increase for faculty because they will no
longer make a contribution into their DCP accounts. That contribution will be
deposited directly into UCRP. The initial rate of contribution is predicted to
be just over 2%, just more than the 2% COLA faculty received. The cost of
health premiums will increase in 2007 on average 27% across all income bands
as much from UC policy as from increasing costs of delivering health care.

 

The UC Committee on
Planning & Budget predicted that executives would need a 6.6% salary increase
each year over the next ten years to rebalance the increasing costs of health
and retirement benefits. That puts executives already 6.2% behind and faculty
9.2% behind. The question is: which group of employees should lead in salary
increases in the race to stay even with rising benefits? So far at UC, the
executives are way ahead.

 

BOTTOM LINE

 

Ideally there would not
need to be campus salary strategies. The state would fund UC salaries at
market level, and the University would be committed to keeping faculty
salaries at this level. Most of the faculty would be On Scale, and Off Scale
would be reserved for exceptional situations. All lobbying efforts should
support this goal. Right now, however, the closest that UCLA could come to
this ideal would be to follow its own rational campus strategy. Looking at the
College of L&S,

• Bring up the UCLA L&S
  Salary Scale to market level, and then increase the Scale annually by the
  CPEC lag.
• Bring faculty up to
  this market level at their next merit or promotion.
• This market Scale
  would form a uniform Scale across divisions and departments as well as for
  faculty within a department. It would address the inequities between the
  amounts of Off Scale given to faculty.
• A higher Salary Scale
  and lower Off-Scale figures result in a more transparent and logical way to
  conceive of and portray UCLA faculty salaries.
• If Scale Averages move
  closer to Average Salaries, the step-ladder system then can function again
  as a system that rewards merit advancement with adequate compensation
  without a chair or dean customizing salaries for individual faculty based on
  a wide variety of other factors.
• The cost of creating
  this market Salary Scale is reasonable over a 3 year period.
• The cost of
  maintaining the higher Salary Scale would be manageable if Off Scale
  increments were adjusted accordingly.
• Most faculty who are
  Off Scale would be recaptured to On Scale.
• The UC Shadow Scale
  Salary Methodology relies on using non salary or other program funding to
  rebalance salaries. The rational methodology would use salary funding for
  salaries.
• A transparent Salary
  Scale would build morale among faculty and strengthen the merit system.
  

 

Appendix

 

Business &
Engineering, Oct. 2005 Salary Scale

Rank	#	2005 Scale	Avg Sal	#On	#Off	$ Off
Assist 2	4	$66,000	$  96,900	0	4	$30,900
3	20	$69,300	$  81,207	6	14	$17,028
4	17	$72,900	$102,396	1	16	$31,338
	41			7	34
wtd avrg			$ 91,524			$25,394
%Off/scale					82.93%	35.86%
Assoc 1	3	$76,200	$ 108,834		3	$32,634
2	8	$78,900	$ 119,442		8	$40,542
3	15	$82,100	$ 115,206	1	14	$35,470
	26			1	25
wtd avrg			$ 115,774		96.15%	$36,753
%Off/scale						44.16%
Full 1	7	$84,600	$ 101,140	0	7	$16,540
2	23	$87,200	$ 113,406	3	20	$30,136
3	15	$92,700	$ 116,736	2	13	$27,731
4	14	$99,300	$ 118,539	4	10	$26,915
5	18	$106,900	$ 127,840	5	13	$28,995
6	12	$118,000	$ 129,676	5	7	$24,673
7	1	$123,400	$ 177,480	0	1	$54,080
8	9	$133,000	$ 156,411	1	8	$26,562
9	10	$144,300	$ 158,569	4	6	$23,762
	109			24	85
wtd avrg			$126,192		77.98%	$27,141
%Off/scale						26.75%