Response to the Report of the Committee on the Economic Status of the Faculty

Date:   January 13, 2006
To:       Members of the Faculty of Arts and Sciences
From:  Andrew D. Hamilton, Provost
Re:       Response to the Report of the Committee
             on the Economic Status of the Faculty

I am pleased to be able to respond to the Report of the Committee on the Economic Status of the Faculty for the Academic Years 2003-04 and 2004-05. My colleagues and I on the University Budget Committee and FAS Steering Committee will use the findings and the recommendations contained in the report as an invaluable guide to future actions and budget decisions.  Our shared goal is to sustain the excellence of the faculty, and I am deeply appreciative of CESOF's commitment and support in the pursuit of that goal.
 
I begin, of course, with my thanks to the members of the committee, and especially its chair, Professor Charles Baltay, for their hard work and thoughtful report.   The 2001-2003 CESOF report described the role of the committee as "watchdog and lobbying," and I believe 2003-2005 committee continued to perform that function very well indeed. 
 
In keeping with recent tradition, I presented my response orally at the meeting of the Faculty of Yale College on November 3, and I am pleased to distribute here the written version of my remarks.  I will be happy to answer any questions from the faculty regarding my response, either via email or at the next Faculty Meeting on February 2.  As usual, I have responded separately to each of the Committee's recommendations.

 
Recommendation 1.  CESOF recognizes with appreciation the healthy rate of faculty salary increases in recent years and recommends that the University continue this trend in future years. 
 
My short response to this recommendation can only be, "You're welcome, and we will!"  But since the issue of faculty salaries is so fundamental not only to the mission of the University, but also to the mission of CESOF, let me say a little more.  Each summer, when we begin the process of planning the University budget for the following year, one of the first things we do is update the long-term financial planning model.  That model includes assumptions about the growth rates of each of the major income and expense categories in the University budget, on the basis of which it projects a "bottom line."  Some years (or so I'm told), the model projects a positive bottom line, and it is relatively easy to commit to a healthy growth in faculty salaries.  But in other years, the projection shows a deficit, so it is necessary to identify ways to increase revenue and reduce expenses in order to achieve a balanced budget.  This was the case with the budget I inherited when I became Provost a year ago, and it continues to be the case this year, and indeed, it will be the case for the next few years. 
 
One of the largest expense categories in the University budget is faculty compensation (salaries and fringe benefits), which in 2005-06 will total over $520 million University-wide, or slightly more than 25% of our $2 billion budget.  Given its magnitude, even a small change in the growth rate of faculty salaries has a major impact on the University's budget, and yet there is a strong consensus not only among the Officers but also among the Corporation that faculty salaries must be protected from budget reductions, because we will not be able to recruit and retain a truly distinguished faculty unless our salaries are competitive with those at virtually any other institution.
 
Each year, we increase the faculty salary budget at a rate that will accomplish three critical goals.  First, the budget must provide for growth in average salaries that will not only outpace inflation but also keep up with the growth in average salaries at other major research universities, particularly Harvard, Princeton and Stanford.  Second, it must provide a pool of funds from which we can make structural adjustments in the salaries of current faculty, not only to reward outstanding achievements as scholars and teachers but also to address internal inequities.  And third, it must provide funds with which we can make competitive offers to faculty whom we are trying to recruit from outside or retain current faculty who have offers from elsewhere. 
 
One of CESOF's most important roles is to monitor how well we accomplish these three goals.  I welcome that monitoring and am pleased that we have "passed the test" in recent years.  I can assure you that our commitment to maintaining competitive salary levels will continue.
 
 
Recommendation 2:  More detailed salary comparison data, comparing salaries by individual schools or disciplines, should be gathered and made available to CESOF so that salary comparison studies can be made with fewer ambiguities.
 
The principal source of public comparison data on faculty salaries is the survey conducted by the AAUP, which reports average salaries across all schools except Medicine.  This survey is of limited usefulness for comparing the salaries of members of the Faculty of Arts and Sciences with comparable salaries at other universities, especially for the assistant and associate professor ranks.  As the CESOF report points out, salaries of law and business school faculties are typically higher than those in arts and sciences, so at least part of the difference in average salaries between institutions with large law and business schools (e.g., Harvard) and Yale is due to differences in the composition of the faculty that is included in the survey. 
 
In addition to the AAUP survey, the administration has access to a survey conducted by a consortium of private universities and colleges that includes arts and sciences only and enables more of an "apples to apples" comparison than the AAUP survey.  Unfortunately, institutions submit their data on the condition that the institution-by-institution comparisons will be treated as confidential and may be seen only by Presidents, Provosts and Deans.  For many years, we have provided CESOF with a summary of these comparisons with the understanding that it could not be included in their report.  We do not have the right to release to CESOF the full report.
 
Our experience has been that schools are reluctant to participate in salary surveys without this promise of confidentiality.  I can use my influence to try to change these restrictions to make more information available to faculty committees such as CESOF, but any one university has little power to affect this change unilaterally.  As a result, I must continue to ask that the faculty rely upon the FAS Steering Committee to take into consideration all of the information that we have at our disposal, including results of confidential surveys that we are not able to share with the faculty.  I understand that this can be a frustrating situation, but our ability to solve this problem is fairly limited.  
 
 
Recommendation 3:  The salary comparisons should be revisited with more complete data, and if Yale is indeed slipping behind our most vigorous competitors, some corrective action should be considered, with special attention to the nontenured faculty.
 
I am in complete agreement, as I said earlier, with CESOF's argument that "competitive salaries are a significant factor in attracting the best talent."  While we cannot make detailed salary comparison data available to the committee, we do have that data, and we pay careful attention to it in determining the salary budget and in setting individual salaries.  However, our goal has not been, nor should it be, to have the highest average salaries in every category of every survey.  For one thing, the results of those surveys can never be completely accurate, because the departmental structures at different universities are never exactly comparable.  For another, by the time we receive them, the data are at least one year out of date.  When it comes to recruiting and retaining the "best talent," what matters most is not average salaries but individual salaries, or more accurately, the total content of our offers or counter-offers.  I can say, based on my own experience as a department chair, Deputy Provost, and now Provost, as well as assurances from my colleagues who have been in the Provost's Office far longer than I, that in recent years, Yale has been prepared to match or exceed virtually any salary offer from another institution.  While we do not win every recruitment or retention battle, we have not lost any such battle in recent years because of salary issues alone.  Simply stated, our goal is to attract and retain the very best talent, and we cannot expect to achieve that goal if we are not willing to pay competitive salaries, at every faculty level. 
 
 
Recommendation 4:  We suggest that at regular intervals Chairs be encouraged to recommend salary increases for Internals (senior faculty promoted from within Yale), who may not have been adequately recognized, increases that exceed incremental ones, with a view to closing the salary gap between Internals and External tenure hires to some extent.
 
I concur strongly with this recommendation, though I should point out that such "encouragement" has been part of our annual salary process since the issue was first raised by CESOF in 1999.  Each January, the Provost initiates the annual salary review process by requesting from the Chairs their recommendations for "special structural increases" that reflect scholarly distinction, teaching effectiveness, and service to the department and University.  The memo goes on to say,  "This is also an opportunity to redress inequities, if any, in the salary structure and to pay special attention to faculty promoted from within rather than recruited from outside Yale."  Based on CESOF's recommendation, we will do two things.  First, I will strengthen the emphasis on addressing this issue in the memo I send to Chairs.  And second, FAS Steering will pay special attention to possible inequities at all stages of the salary review process.  We will make every effort to reduce the gap between Internals and Externals and will monitor our progress closely over the next few years.
 
 
Recommendation 5:  The Provost's Office should compile data on the composition of the fringe benefits reported by Yale and our peer universities.  If Yale is indeed lagging behind, some corrective action should be considered. 
 
We will do our best in this regard, building upon the work that CESOF has already done on this project, as included in its report.  Of course, comparisons of total fringe benefits are difficult because of wide variations not only in the set of benefits offered by different institutions but also in the way the cost, or institutional contribution, to some of those benefits is calculated.  Some benefits, for example retirement contributions or disability or life insurance, are relatively easy to compare.  But when it comes to things like health insurance, where institutions offer a wide range of different plans with different coverage and cost, direct comparisons become extremely difficult, especially since Yale offers the unique and uniquely cost-effective Yale Health Plan.  A more helpful approach, as taken by CESOF, seems to be to focus on particular benefits that are of high priority to Yale faculty. 
 
 
Recommendation 6:  The Committee lauds the University policy of providing space and other services to retired faculty and urges the University to continue this practice.
 
Much of the credit for providing space and services to our emeritus faculty belongs not to the Provost, I must confess, but to the Henry Koerner Center for Emeritus Faculty.  Since it opened in January, 2003, the Koerner Center has provided not just space for offices, classes, social events, art exhibits, and a wide range of special programs, but also financial support for teaching and research by emeritus faculty.  Special thanks are due to Dr. Bernard Lytton, the Donald Guthrie Professor Emeritus of Surgery, and the distinguished group of emeritus faculty who serve as the Advisory Board of Fellows, for their work in creating and overseeing the programs and support provided by the Center.  And since the Koerner Center is supported by its own endowment, its resources are guaranteed to continue.
 
The offices at the Koerner Center are in addition to offices that have been specifically designated or created for emeritus faculty elsewhere on campus, including eleven offices that were created for emeritus faculty on the fourth floor of 370 Temple Street, ten offices in the tower of SSS, and in a number of departments.  At the present time, we believe we have enough offices to meet the needs of all emeritus faculty who continue to be active scholars and to participate in the intellectual, cultural and social life of the community.
 
 
Recommendation 7:  The University should consider policies that would keep the total faculty costs of the health program to a minimum without significantly reducing benefits, while exploring means to equalize the private costs for faculty and family coverage in the other offered HMOs when faculty members reside outside of the community conveniently served by the low-cost YHP provider.
 
The quality and cost of health care are issues of concern not just to the faculty, of course, but to the entire University community.  As you know from the recent announcement by Rob Schwartz, the Officers have approved several changes in the University's health care plans, as recommended by the Health Benefits Review Committee.  These changes reflect the recommendations of an extensive review involving outside consultants, as well as feedback from employee focus groups conducted earlier this year.  An important aspect of the health benefits review examined ways that the University could continue to provide employees with a choice of high-quality health care coverage plans while addressing ever-increasing health insurance premiums.  This in-depth assessment of our current non-YHP health care insurance providers resulted in a decision to consolidate the non-YHP plans into two point-of-service (POS) plans to be administered by Aetna. 
 
The health benefits review also confirmed that the Yale Health Plan, the centerpiece of the University's health benefit options, continues to be a quality-driven, highly efficient health care option that offers an exceptionally rich benefits package. A new, state-of-the-art facility to house the YHP is in the planning process. Efforts are also underway, driven by the YHP leadership, to address access issues identified during the focus groups.  Finally, the YHP has implemented a reduction in the premiums to cover additional dependents between the ages of 19 and 25 years old.
 
In addition to its specific recommendations, CESOF offered a number of "observations," one of which I would like to comment upon here ˆ child care -- because it is of such broad current interest to the Yale community and was the focus of two of the recommendations of the 2001-2003 CESOF.  The University has completed the external review and strategic planning process described in Susan Hockfield's response to the 2002-2003 CESOF report.  That review included the engagement of consultants who are nationally recognized for their expertise in child care services to analyze information assembled and conclusions made during the University's internal review, to administer a campus-wide needs survey, and to assist the University in strategic planning for the enhancement and expansion of child care supports.  The strategic planning process identified a number of enhancements that reflect the diversity of preferred child care support among various University constituencies and address cost as well as access issues. The University Officers have approved a plan to move forward with the implementation of these enhancements. This plan includes provisions to continue to solicit and incorporate the input and assistance of the University community.   The details of this plan were announced in the message I sent to the community in November.
 
I conclude by thanking, once again, the members of the 2003-2005 CESOF for their diligent effort and wise guidance.  I look forward to working with the next Committee on the Economic Status of the Faculty as we continue to pursue strategies for ensuring that Yale offers salary levels and benefit programs that ensure our ability recruit and retain the very best scholars and teachers to our faculty.

Sincerely,