FINAL REPORT

CSU-PUEBLO FACULTY SALARIES AND MARKET EQUITY:

A Comparative Salary Analysis and Plan for Adjusting Faculty Salaries to Market Target Levels

Contents:

Executive Summary............................................................................................... 2 Rationale for Study................................................................................................ 3 Methodology.......................................................................................................... 5 Results.................................................................................................................... 11 Implementation of Salary Adjustments................................................................. 12 References.............................................................................................................. 14 Appendix A. Identification of New Set of Peer Institutions for CSU-Pueblo....... 15 Appendix B. Cost of Living for New Peers and CSU-Pueblo............................... 18 Appendix C. Computation of Individual Target Market Salaries.......................... 19 Appendix D. Salary Differentials for CSU-Pueblo Faculty…... .......................... 20

Report prepared by Dr. Barbara Montgomery, Provost, Colorado State University-Pueblo, with research assistance from Dr. David Castle, Lamar University, Texas and Ms. Joanna

Vance, Colorado State University

April 11, 2005

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EXECUTIVE SUMMARY

Retaining a well qualified, effective and committed faculty is essential for Colorado State University-Pueblo (CSU-Pueblo) to accomplish its educational and institutional goals. Unfortunately, CSU-Pueblo is experiencing a number of problems in faculty retention related to present, low salaries. First, faculty attrition has increased, and the faculty who left took positions at higher salaries elsewhere. Second, faculty applications for vacant positions are down significantly. Third, rejections of position offers are up with the major reason being "the salary is too low." Finally, external evaluators have been critical of the University's salaries and their potential impact on faculty recruitment and retention. The purpose of this study was to evaluate the market competitiveness of the current salary structure at CSU-Pueblo and to use the information generated to recommend the systematic adjustment of individual faculty members’ salaries where market inequities exist. The methodology was informed by approaches used at other U.S. universities, consultation with an experienced researcher in this area, and discussions with campus faculty governance and administrative groups. This study compares individual salaries for 127 CSU-Pueblo faculty with salary data from a set of matched, peer institutions, adjusting for discipline, rank, years in rank, merit and cost-of-living. The findings confirm summary information that has been reported for the past five years to the Board of Governors showing that CSU-Pueblo faculty salaries are not competitive. Detailed analyses produced negative salary differentials for 89 faculty members compared to their peer target medians. Salary deficiencies were greatest for CSU-Pueblo full professors and least among assistant professors. An implementation plan identified two goals to be achieved within four years: (1) the median of CSU-Pueblo faculty salaries will equal the median of faculty at CSU-Pueblo's peer institutions; and (2) no individual CSU-Pueblo faculty salaries will be below the median of faculty salaries at peer institutions, controlling for rank, years in rank, discipline, merit and cost of living. Options for accomplishing these goals within the context of uncertain state and University revenues over the next four years are described in this report. The University proposes to indicate which options will be implemented by July 1, 2005, based on an assessment of the budgetary contingency conditions described in the plan. The total cost of the plan, when fully implemented, will be $714,799.

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CSU-PUEBLO FACULTY SALARIES AND MARKET EQUITY:

A Comparative Market Analysis and Plan for Adjusting Faculty Salaries to Market Target Levels

RATIONALE FOR STUDY Retaining a well qualified, effective and committed faculty is essential for Colorado State University-Pueblo (CSU-Pueblo) to accomplish its educational and institutional goals. Put simply, retaining high quality faculty leads to high quality educational experiences for students. In contrast, high rates of faculty turnover disrupt course scheduling and student support activities, delay programmatic improvement plans, jeopardize program quality and accreditation requirements, demoralize remaining faculty and staff, and deplete the University’s intellectual capital. Among the most influential factors that are positively related to retention of faculty are a collegial environment on campus and in the program, quality of faculty colleagues, reputation of the university and faculty salary and benefits. Reports over the past few years by administrators at numerous universities directly link faculty attrition to low or non-competitive salaries (e.g., University of North Carolina-Greensboro, 2002; Purdue University Report, 2000; Haignere, 2002; Twigg, Valentine & Elias, 2002). Recently, CSU-Pueblo has had a number of experiences that indicate problems in faculty retention due to non-competitive faculty salaries. First, an increased number of faculty have resigned, with a majority citing low salaries as a major reason. In 2001-02, the University had no faculty resignations; in 2002-2003, the University had seven faculty resignations; in 2003-2004, the University had nine faculty resignations. Six of the nine faculty members who resigned in 2003-2004 explicitly stated as a major reason their low salaries at CSU-Pueblo, and they took positions elsewhere at higher salaries. For example, during 2003-2004 two of our 14 tenured/tenure-track faculty in the Business School resigned citing poor salaries, and each secured faculty positions elsewhere, one with a salary increase of $7,000 and one with a salary increase of $14,000. In that same year, two of our mathematics professors resigned and took positions paying over $10,000 more than they were making at CSU-Pueblo. Also in 2003-04, an associate professor of nursing resigned to take a position paying the equivalent of 50% more than her CSU-Pueblo salary, and an assistant professor in Social Work resigned to take a position that paid "substantially,"1 more than her CSU-Pueblo salary. Second, in January and February of 2005, as our earliest searches were culminating in offers to candidates, there was a notable increase in applicants withdrawing or turning down position offers because of non-competitive salaries. Searches in accounting, management, industrial engineering, sociology, and civil engineering technology have experienced multiple withdrawals and refusals. Candidates who withdrew and refused offers typically gave explanations like the following, the first received from a candidate for a position in sociology and the second from a candidate for a position in business:

"Although CSU-Pueblo is an excellent comprehensive university that provides quality education to the local community and I personally believe that CSU-Pueblo would be a

1 The exact difference could not be secured, but the resignation letter noted that it was "substantial."

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very rewarding place to work with students and faculty, financial considerations are still at issue. Therefore, at this point I don't want to waste any more of your valuable time and I wish you the best in your search for a colleague." "As part of this verbal notification, you requested a written explanation concerning why I declined the position offered. First, I received an offer from another university for more money. This offer included 20% more in annual compensation. Second, I was deeply concerned about the tenuous budget situation facing higher education in Colorado, especially the uncertainty around the universities seeking enterprise status under TABOR and the effects of the new voucher system for allocating state dollars. I’ve decided that a ‘wait and see’ approach is best at this early point in my career.”

Third, the numbers of applicants in searches are down from previous years in all colleges and disciplines, including chemistry, education, mathematics, history, nursing, and social work. Mathematics and history searches are down 80% compared to the number of applicants in their last searches. Our inquiries to faculty and administrators at other universities about possible explanations have yielded the consistent response that Colorado finances for higher education are the most uncertain in the nation and CSU-Pueblo's low salaries are not competitive. Fourth, external evaluators for accreditation reviews, program reviews and grant site visits have recently commented on the negative impact of low faculty salaries at CSU-Pueblo on program quality and faculty retention. Such comments were related to a condition for improvement requiring future reports to AACSB, which recently accredited our business program. External reviewers for music, social work, and nursing have also expressed concern about the negative effect of salaries on program quality. During a site visit to CSU-Pueblo in 2002, reviewers for a National Cancer Institute grant, which supports a major community education and health program and opportunities for student research, told the President and the Provost that the University's low salaries were a major deterrent to recruiting and retaining excellent teacher-scholars. In 2004, the external reviewers for the B.S. in Biology stated the following in their report:

Several faculty are actively looking for positions at other institutions. The principal issues appear to be low faculty salaries, lack of funding for equipment, and excessive numbers of contact hours. Loss of tenured faculty from the department would be a serious blow toward the reinvigoration of the department that is currently underway.

These recent experiences are in the context of documented lower salaries at CSU-Pueblo compared to peer institutions. For the past five years, CSU-Pueblo has annually reported the following information to the Board of Governors as part of the assumption budget report:

Table 1: CSU-Pueblo Faculty Salaries as a Percent of CCHE Peer Institution Salaries

1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Average for all ranks:

91.9%

84.1%

85.2%

83.2%

73.4%

These data document a steady decrease in the competitiveness of CSU-Pueblo faculty salaries in relation to similar institutions. By 2003-2004, CSU-Pueblo full professors were making, on average, $8,238 a year less than full professors at peer institutions; CSU-Pueblo associate

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professors were making, on average, $6,725 a year less than associate professors at peer institutions; and CSU-Pueblo assistant professors were making, on average, $156 a year less than assistant professors at peer institutions. These data also document a problem with salary compression. Salary compression occurs when junior faculty salaries approach those of senior faculty. Thus, compensation is not based on longevity in the profession and so there is a narrowing over time of salary differences between ranks. Compression is usually caused by market-driven hiring practices that result in new faculty being hired at higher salaries than were more senior faculty. Over time, this pattern creates "compression" of the expected differences in salaries at higher ranks compared to those at lower ranks. This explains why the average difference when comparing salaries of assistant professors at CSU-Pueblo to those at peer institutions was considerably less in 2003-2004 than the differences when comparing both full professors and associate professors at CSU-Pueblo to their counterparts at peer institutions. At its extreme, salary compression results in salary inversion, when new assistant professors are hired at salaries exceeding those of higher-ranked faculty members in their discipline. CSU-Pueblo currently has cases of inversion in business and nursing and when we complete new faculty hiring for FY06, we expect to have additional cases in business, chemistry, education and mathematics. Salary compression and inversion compound the negative effects of low salaries, as reported in numerous national studies (see e.g., Twigg, Valentine & Elias, 2002). Senior faculty can come to resent their junior colleagues; both senior and junior faculty are likely to realize that they must move to new institutions to obtain market competitive salaries; and the institution is likely to experience reduced esprit de corps, job complacency among its faculty and low retention rates. In extreme cases, mirroring findings in business settings, some faculty reduce the quantity and quality of their work. Finally, as compression approaches inversion, it negates the ability for the institution to reallocate salary savings by hiring junior faculty to replace senior faculty. Instead, hiring replacement faculty becomes more expensive than retaining current faculty. Prompted by the recent increase in faculty turnover, reduced numbers of applicants for faculty vacancies, external reviewers' concerns, repeated annual findings that CSU-Pueblo faculty salaries by rank are below those of our peers, and evidence of salary compression, the University undertook a statistical analysis of tenured and tenure-track faculty salaries. This report is a summary of the findings. The purpose of this study is to determine if market inequities exist in the current salary structure at CSU-Pueblo and to use the information to recommend, where market inequities exist, the systematic adjustment of faculty members’ salaries.

METHODOLOGY Design Review Publications specific to faculty salary equity analyses were reviewed prior to designing this study, including the American Association of University Professors (AAUP) publication Paychecks: A Guide to Conducting Salary-Equity Studies for Higher Education Faculty (Haignere, 2002). Reviews were made of how faculty salary analyses were conducted at other higher education institutions, including Arizona State University, California Institute of Technology, Central Washington University, Indiana State University, Lamar University, Longwood University, North Carolina State University, the State University of New York System, the University of Central

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Florida, the University of Houston, and the University of Wisconsin. Draft designs were discussed and changes were made with input from CSU-Pueblo’s Faculty Senate, Faculty Compensation Committee, Deans’ Council, central administration and a research consultant with national experience in designing such studies.2

This study provides a single phase analysis that addresses market competitiveness, as defined by a set of matched, peer institutions. The methods also address salary compression, gender and ethnic bias, and other potential biasing factors to the extent that those factors are not systematically represented across the peer institutions. Peer Institutions Two different peer comparison groups were considered for use in this study. The first was CSU-Pueblo's "old" peer comparison group. This group is sometimes referred to as the "CCHE Peers" because it was established in the early 1990's by then University of Southern Colorado with selection criteria provided by CCHE. The second group was CSU-Pueblo's "new" peer group. This group was established in spring 2004 in response to CSU-Pueblo’s recent name and mission change. Key variables used to identify the new peer institutions included Carnegie classification, public institution status, city size, institution size, mix of full and part-time students, proportion of bachelors and masters degrees and degrees offered in key disciplines, full-time faculty count, ratio of research to instruction expenditures, student/faculty ratio, and admissions selectivity. Details of the methods used to identify the new peer institutions are attached in Appendix A, including a list of CSU-Pueblo’s "new" and "old" peer institutions. This data was shared as an informational item with the CSUS Board of Governors at the August, 2004 meeting. This study critically analyzed the possibility of using the old and the new peer groups as salary comparison groups. However, the old peer group had a significant amount of missing data in the College and University Personnel Association (CUPA) National Faculty Salary Survey, the most often used data warehouse for such studies. This high rate of missing data indicated that the old peer institutions did not offer many of the disciplinary programs offered at CSU-Pueblo or they did not report their salaries to the CUPA data warehouse. The quantity of missing data was sufficient to undermine the integrity of this study. Also, the study reported in Appendix A found that CSU-Pueblo enjoys a closer, systematic match with the new peer institutions than the old peer institutions on a number of key variables (e.g., Carnegie classification, city and institution sizes, mix of full and part-time students, proportions of bachelors and masters degrees, degrees offered in key disciplines, full-time faculty count, ratio of research to instruction expenditures, student/faculty ratio, admissions selectivity and mission). Additionally, for purposes of this salary study, the Office of the Provost contacted each of the new peer institutions to determine how similar their faculty teaching workload policies and practices are to CSU-Pueblo’s. Two institutions do not define instructional load in terms of course credits, as CSU-Pueblo does. Of the remaining 14 institutions, two had instructional load policies requiring one less course a year, on average, than CSU-Pueblo requires; and twelve had instructional load policies equivalent to CSU-Pueblo’s policies. Given the above considerations, the new peer institutions were determined to be well matched to CSU-Pueblo and so were used to set market targets for salary comparisons.

2 Dr. David Castle, Professor, Lamar University, Texas, has published two recent articles on this topic and has consulted on a number of similar studies for other universities.

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The value of a peer comparison group is in defining central tendencies on factors of interest—like faculty salaries—among institutions with matched missions, programs, and other key characteristics. No single institution within a comparison group would be a valid comparison point. Also, while there may be individual outliers in the comparison group on any particular factor, the effects of such outliers are muted by looking at only the group median for the variable of interest. CSU-Pueblo Faculty . This study was limited to permanently budgeted, tenured and tenure-track faculty. The specific criteria for inclusion are described below:

(1) Included faculty members were formally classified as tenured or probationary (i.e., tenure-track). This criterion required that all included faculty carry rank and not occupy "at will" faculty positions. (2) Included faculty were employed during academic year 2003-2004 or newly hired for 2004-05. The most recent CUPA salary data available were for 2003-2004 and these data were used in the primary analysis of this study to evaluate the 2003-2004 salaries of the CSU-Pueblo faculty. The salaries of CSU-Pueblo faculty who were newly employed in 2004-2005 were evaluated through a secondary study (see section below). (3) As of February 15, 2005, included faculty had not submitted notice of intent to retire or resign effective before the beginning of the 2005-06 academic year. This criterion was chosen because the soonest possible effective date for any faculty adjustments was August, 2005. Note that faculty members who notify the University after February 15, 2005 of intent to retire or resign effective before the beginning of the 2005-06 academic year will not receive salary adjustments.

One hundred and twenty-seven faculty met these criteria (114 continuing faculty and 13 newly hired faculty). These criteria excluded adjunct, temporary and non-tenure-track faculty, as well as 18 faculty members who had retired or resigned by fall semester 2005. A group level comparison of CSU-Pueblo and new peer faculty median salaries by rank is reported in Table 2 below, based on the criteria for inclusion in the primary study noted above. It shows the same pattern as previous institutional analyses in that assistant professors' salaries are closer to market targets and full professors' salaries are furthest from market targets3.

Table 2. Faculty Salary Market Comparisons by Rank with New Peers

Academic Rank

CSU-Pueblo

Median Salary

New Peers

Median Salary

CSU-Pueblo

Market Position Professor $57,030 $65,672 86.8% Associate Prof. $45,737 $52,070 87.8% Assistant Prof.

$42,000 $45,527 92.3%

3 Note that exact dollar amounts vary slightly from figures reported on page 5 because different criteria were used to determine inclusion in the two analyses.

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Cost of Living To assure a valid comparison between CSU-Pueblo and its new peer institutions, salaries were adjusted for cost of living (i.e., the cost to maintain a common standard of living in the geographically diverse locations represented in this study). The cost of living adjustment was based on the ACCRA Cost of Living Index for the second quarter 2004. The ACCRA cost of living index measures relative prices for consumer goods and services in participating areas at a given point in time. The average for all participating areas equals 100. The participating areas are compared against this reference point and are read as a percentage of the average for all participating locations. For example, if the average for all costs for all participants were $40,000 it would be given an index value of 100. Individual cities or areas are then compared and their measured costs indexed as a percent of the benchmark. In making comparisons, it is necessary to obtain all index values from the same cost of living study and different studies should not be compared since the results are extremely sensitive to the number of participants, the “basket” of goods and services, and the number of observations of each of those. Index values for both Pueblo and individual peer institution locations are listed in Appendix B. Cost of living data for some peer institution cities were not reported in the ACCRA study; state medians were used in these cases. The cost of living index for the Pueblo, Colorado area was 90.3, compared to a median value of 95.4 for the set of new peer institutions. Expressing this difference as a percentage, the cost of living in Pueblo was 94.7% of the cost of living in cities or areas of the new peer institutions. Discipline and Rank Discipline and rank comparisons were based on 2003-2004 salary data collected by the College and University Personnel Association (CUPA) National Faculty Salary Survey. Because of different departmental structures from institution to institution, faculty were grouped by discipline using the U.S. Department of Education’s Classification of Instructional Programs (CIP) codes. CIP is a national standardized system for classifying academic disciplines. Using disciplinary CIP codes recognized that market supply and demand create salary differences among academic disciplines. Salary comparison data was customized to include only disciplines at comparison institutions that matched disciplines offered at CSU-Pueblo. In one case, CSU-Pueblo faculty in the fairly unique discipline of automotive industry management were categorized with the CIP code representing the most similar discipline for which data was available, i.e., engineering technology. Also, the CUPA comparison data for library faculty were taken from the 2003-04 administrative/staff salary study, which provided a better match in terms of qualifications and educational background for each position. In the computational model, 66% of the variability in faculty salary differentials is due to discipline and rank The CUPA comparison data for CSU-Pueblo faculty in accredited or certified programs was limited to accredited or certified programs at peer institutions. This pertained to athletic training, business, chemistry, education, engineering, engineering technology, music, nursing, and social work programs.

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Years in Rank CUPA does not provide data on years in rank for faculty. Therefore, assumptions were made with regard to this variable, consistent with similar studies described in the literature. On average, salaries of newly promoted faculty within any discipline will be lower than salaries of faculty who have held that rank for a longer time period within the same discipline. Additionally, it was assumed that the CUPA median salaries represented the mid-point of the variable, years in rank. The following guidelines were used for setting the mid-point of years for each rank: • For Assistant Professors the mid-point was based on the current median years in rank for

assistant professors at CSU-Pueblo (3 years in rank); • For Associate Professors the mid-point was based on the current median years in rank for

associate professors at CSU-Pueblo (6 years in rank); and • For Professors the mid-point was based on the current median years in rank for professors at

CSU-Pueblo (7 years in rank) It was expected that faculty members who fell below the mid-point for years in rank would be earning salaries lower than the CUPA median and that faculty with more years in rank would be earning salaries higher than the CUPA median. For example, a faculty member newly promoted to Professor would not be expected to earn a salary equal to the CUPA median for that rank. A faculty member who had been a Professor for 15 years would be expected to be earning more than the CUPA median salary for that rank. To reflect the compounding effect of years in rank on salary, the CUPA median matched to each CSU-Pueblo faculty member’s salary was adjusted 3.2% for each year (compounded annually) that the faculty member was below or above the mid-point for years in rank up to five years. The adjustment amount of 3.2% was chosen because it represents the national average of salary increases over the past five years at public institutions. Limits were set on this variable such that faculty years in rank were capped at five years above the median for each rank (i.e., 12 years for professors; 11 years for associate professors and 8 years for assistant professors). Instituting this type of cap has been used by other institutions in salary analyses because it helps control for instances in which faculty did not achieve promotion in the typical timeframes, and it creates a situation with equal “steps” or distance above and below the median. These procedures resulted in the variable, years in rank, accounting for approximately17% of each faculty member’s final salary differential

Merit Treating all faculty members as equally meritorious would not appropriately reflect the role of merit in determining CSU-Pueblo faculty salaries, according to Faculty Handbook policies. However, CUPA does not provide data on faculty merit so assumptions had to be made with regard to this variable. As with years in rank, it was assumed that the CUPA salary medians represent the mid-point of the variable merit.

The following guidelines were used for setting the CSU-Pueblo comparison point for merit: • Superior = 3.0 merit points • Meritorious = 2.0 merit points • Non-meritorious = 1.0 merit point • For all included CSU-Pueblo faculty the comparison point was based on the mean merit

score (median = 2.2 merit points)

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It was expected that faculty members who fell below 2.2 for merit would be earning, on the average, salaries lower than faculty members with higher than 2.2 for merit. For example, if two Professors in the same discipline were equivalent in years of rank and one obtained a merit score of 2.7 while the other obtained a merit score of 1.9, the Professor with the merit score of 2.7 would be expected to earn a salary higher than the Professor with a merit score of 1.9. CSU-Pueblo faculty merit scores from 2000, 2001, 2002, 2003 and 2004 were averaged to determine a faculty member’s merit score.4

To provide guidance in adjusting for this variable, the target market salary was adjusted by 2.125% for every tenth of a point that the faculty member fell below or above the mid-point for merit. That is, for faculty members with a merit score above the mid-point, the adjustment was an additional 2.125% salary increase per tenth of a point above the mid-point; for faculty members with a merit score below the mid-point, the adjustment was a salary decrease of 2.125% per tenth of a point below the mid-point. These procedures resulted in the variable, merit, contributing approximately 17% to the salary differential for each faculty member. Comparing CSU-Pueblo Individual Faculty Salaries with CUPA Benchmarks The final step in the primary study was completing the comparison of individual faculty salaries (adjusted for years in rank and for merit) with the CUPA medians from the benchmark groups by discipline and rank and adjusted for cost-of-living (see Appendix C for computational steps). For each faculty member, an expected (target market) salary was then subtracted from the actual salary to obtain a Salary Differential (SD). A positive SD indicated an actual salary that was higher than expected, and a negative SD indicated an actual salary lower than expected. Methods Used to Evaluate Salaries of Thirteen Newly Hired Faculty The following approach was used to analyze the salaries of the 13 new faculty (all assistant professors) who began work during the 2004-05 academic year. A 2003-2004 target starting salary was computed by referencing peer CUPA data—for the appropriate discipline and adjusted for cost of living—reported for either (a) new assistant professor median salary in their disciplines; or if (a) was not reported or the person was awarded years toward tenure upon hire, then (b) assistant professor median salary adjusted for years toward tenure awarded with hire (i.e., P1, P2, P3, etc.). Once (a) or (b) was determined, each new faculty member's starting salary was compared to their target salary plus 2% (the average salary increase for CSU-Pueblo faculty for 2004-2005); this step corrected for using 2003-2004 salary data to evaluate 2004-2005 salaries. Because the new faculty had not received a merit evaluation, this factor could not be considered.

4 Complete, official and centrally recorded data was available only for the past five years. For faculty who had been at the University for less than five years, the average merit rating was determined for the number of years they had been at the University.

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RESULTS Salary Comparisons by Rank and Discipline, Controlling for Years in Rank, Merit and Cost of Living. Table 3 summarizes the costs to raise individual CSU-Pueblo faculty salaries to their appropriate target market levels. Costs for faculty in the primary study have been determined by controlling for discipline, rank, years in rank, merit, and cost of living. For newly hired assistant professors (i.e., appointed beginning in 2004-2005), the variables controlled for were discipline, rank, and cost of living. The cost to increase 89 individual faculty salaries to peer target medians, controlling for the variables listed above, is $767,340.

Table 3. Cost to Raise CSU-Pueblo Faculty Salaries to Peer Market Targets, Controlling for Discipline, Rank, Years in Rank, Merit, and Cost of Living.

Faculty Rank Cost to Achieve Peer Market Targets

Professors (n = 31) $356,076 Associate Professors (n = 36) $263,790 Assistant Professors (n = 17) $133,402 Newly Hired Assistant Professors (n = 5) $ 14,072 Total (n = 89) $767,340

Individual Adjustments Based on New Peer Institution-defined Market Targets Individual salary adjustments necessary to bring CSU-Pueblo to peer-defined target market for new peer institutions are shown as negative salary differentials in Appendix D. A negative salary differential indicates that the individual’s current salary is less than the target market salary, controlled for discipline, rank, time in rank, merit, and cost of living, as appropriate. Of the 13 newly hired faculty members, five were hired at starting salaries below their target market salaries, and so have negative salary differentials. Of the remaining 114 CSU-Pueblo tenure and tenure-track faculty included in this study, 84 have negative salary differentials, indicating the need for a salary adjustment. Summary and Conclusions This study was descriptive in nature. Its purpose was to determine how CSU-Pueblo faculty salaries compared to appropriate market benchmarks and to describe the cost of raising CSU-Pueblo faculty salaries to market competitive levels. The following general conclusions emerged from the study:

• CSU-Pueblo faculty salaries in 2003-2004 were below market levels, ranging from 86.8% of target market salaries for full professors to 92.3% of target market salaries for assistant professors.

• The cost to raise individual faculty salaries to competitive peer market levels is $767,340

(controlling for discipline, rank, time in rank, merit, and cost of living, as appropriate).

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• The approach used in this study assumed that no systematic bias existed at peer

institutions in relation to salary compression and equity issues like gender and ethnicity. These assumptions should be validated with follow up analyses in future years. If such studies document inequities based on these assumptions, additional salary adjustments may be indicated.

IMPLEMENTATION OF SALARY ADJUSTMENTS This section of the report describes goals, conditions, and options for adjusting the salaries of CSU-Pueblo tenured and tenure-track faculty, based on the findings reported in the previous section. Goals The following two goals guide the implementation of salary adjustments, based on the results of this study:

• Within five years, the median of CSU-Pueblo faculty salaries will equal the median of faculty at CSU-Pueblo's peer institutions.

• Within five years, no individual CSU-Pueblo faculty salaries will be below the median

of faculty salaries at peer institutions, controlling for rank, years in rank, discipline, merit and cost of living.

Conditions Achievement of the goals listed above and implementation of the options described below are contingent on the financial state of the University. The following major factors could affect the University's ability to fully implement this plan:

1. Enrollments. It is assumed that enrollment will increase over the next five years (approximately 1.5% to 5% per year), resulting in an increase in tuition revenue. Flat enrollment will limit revenue and decreased enrollment will reduce tuition revenue. Both conditions would likely delay the implementation timeline and reduce the proposed salary adjustments.

2. State funding for higher education students. During FY 2005 CSU-Pueblo will receive

state funding under a new structure created by COF. Funding for student stipends and fee-for-service has not been determined. If funding under COF does not produce revenue that equals or exceeds current state funding levels at CSU-Pueblo, it will delay the implementation timeline and may require reductions in salary adjustments.

3. Tuition. The University has submitted a preliminary request for a FY06 tuition increase

of 15%. A reduction in the proposed tuition rate increase or an increase in mandated

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costs could delay the implementation timeline and reduce the proposed salary adjustments.

4. Colorado's budgetary situation. Currently, a state deficit of over $250 million is forecast

for FY06. If the state reduces FY06 funding by reducing students' stipends or the CSU-Pueblo fee-for-service amount, the timeline and proposed salary adjustments will be negatively affected.

5. Board of Governors' approval. All proposals concerning salary adjustments and annual

increases must be approved by the CSUS Board of Governors. Faculty Salary Adjustment Options This section describes several options for making faculty salary adjustments. Several options have been proposed due to: (1) the high level of uncertainty about Colorado's budgetary support for higher education; (2) CSU-Pueblo's changing enrollments, including the mix of enrolled students (e.g., resident, non-resident); and (3) uncertainty regarding mandated costs that must be paid by CSU-Pueblo. The funding variations described below acknowledge that the amount of revenue available to address salary adjustments may vary, depending on these three factors. Three variables are key in defining funding options: (1) limits on adjustments to faculty salaries; (2) the proportion of the total cost of adjustments to be made in the first year; and (3) the source(s) of funding used to adjust salaries. With regard to the first variable, market-based salary adjustments made at other universities often have had restrictions placed on them. One of these has been a limit to the amount of single adjustments. Because of cost considerations at CSU-Pueblo, the implementation plan includes the provision that no individual faculty salary adjustment will exceed $20,000. This restriction results in the total cost of the plan being $714,799. The second variable is the proportion of each faculty member's total identified salary adjustment that will be made in the first year of implementation. This variable reflects the interaction between the uncertain funding situation for FY06 and the desire to front-load—as much as possible—the cost of salary adjustments to be made over the proposed four-year timeline. The proportion of each faculty member's total adjustment that will be made in the first year will be 50%, 40%, 30% or 25%. Table 4 summarizes the first year implementation costs for each of these percentage options.

Table 4: Options for First Year of Implementation Plan Year 1 Options Year 1 Cost

50% of total adjustment $357,400 40% of total adjustment $285,920 30% of total adjustment $214,440 25% of total adjustment $178,700

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With regard to the third variable, the potential revenue sources for the implementation plan in FY06 and beyond include the following:

• Tuition increase • Restructured tuition • Differential tuition by program • Increased enrollment • Reallocation of budgeted funds

Timeline The University envisions a four-year implementation timeline. By July 1, 2005, the University will announce which funding level and funding source options it will use for 2005-06. This decision will be determined by state and University budget conditions and having successfully secured the approval of all appropriate parties, including the Board of Governors. By July 1 of each of the subsequent three years, the University will announce the proportion of the total salary adjustment that will be implemented and the source of funding. The University plans to implement the entire plan, as defined by the two goals on page 12, within four years. References AAUP, 2002, 2nd ed. Paychecks: A Guide to Conducting Salary-Equity Studies for Higher

Education Faculty. Washington: American Association of University Professors. Castle, D. S. forthcoming 2005. Estimating Seniority Effects in Faculty Salary Studies:

Measurement and Model Specification. Public Personnel Management. Castle, D. S. & Pemberton, A. R. 2001. The Effects of Merit Pay on Faculty Salary

Compression. The Quarterly Bulletin. Texas Association of College Teachers. 45:10-11.

Cook, S. Faculty Attrition: A Growing Problem. The Carolina Online: April 1, 2002. CUPA, 2004. 2003-2004 National Faculty Salary Survey. College and University Personnel

Association. Faculty Senate Ad Hoc Salary Administration Board. 2001. Faculty Senate Salary

Administration Report. Central Washington University. Twigg, N.W., Valentine, S.R., & Elias, R.Z. 2002. A Comparison of Salary Compression Models

and Pay Allocation in Academia Over Time." The Review of Higher Education, Fall 2002, 26: 81-96.

University of Houston Faculty Senate. December 29, 1999. Salary Compression Report.

University of Houston.

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Appendix A

Identification of New Set of Peer Institutions for Colorado State University-Pueblo

Spring, 2004

BACKGROUND In the mid 1980’s, peer groups were established for each Colorado university, including then University of Southern Colorado. These peers were re-examined in the early 1990’s, based on a procedure and guidelines set by CCHE. Generally, the CCHE guidelines stressed that the set of chosen peers should include 12-15 institutions, not be an aspiration group, should be geographically balanced to address differences in cost of living, should not be based on funding or resource allocation information, should be publics and consistent with Carnegie classification, should not include Colorado schools, should reflect role and mission, should offer similar degrees and programs, and should be similar in size. As a result of these processes, the following set of institutions was designated as USC’s “CCHE Peers”:

• University of Massachusetts-Dartmouth • University of North Carolina-Charlotte • California State University-Humboldt • University of Wisconsin-Parkside • University of Wisconsin-River Falls • Western Washington University • Eastern Washington University • State University of New York-Plattsburg • State University of New York-Pottsdam • West Texas State University

At times during the past few years for some limited comparisons, USC also referenced the set of institutions belonging to the Western Interstate Commission of Higher Education. This set of institutions was never formally or critically matched to USC on any set of variables, and served merely as a convenience group:

• Eastern New Mexico University • Southern Utah University • California State University-Humboldt • Southern Oregon University • Montana College of Technology • Weber State University • Eastern Washington University • University of Colorado-Colorado Springs • Mesa State College • Northern Colorado University

RATIONALE The USC Peer Institutions list included a mix of Baccalaureate, Masters I and Masters II institutions with varied program arrays. CSU-Pueblo’s name change and mission change in July, 2003, its stable Carnegie classification as a Masters I institution, and its current degree program offerings resulted in a

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poor match with the USC Peers. Also, the limited number of USC peer institutions (n = 10) resulted in an undesirable level of missing data for some comparisons. Therefore, during Spring semester, 2004, the University undertook to identify a new, better matched and slightly larger set of Peer Institutions.

METHODOLOGY In January, 2004,the President appointed a small working group consisting of the Vice President for Administration and Finance, the Provost, the President of Faculty Senate and a faculty member from Business with professional experience on similar projects to oversee the identification process. With the President’s approval, this group commissioned The National Center for Higher Education Management Systems’ (NCHEMS) Comparison Group Selection Service to guide in the identification and weighting of selection variables and to analyze national data (IPEDS).

Key variables used to identify potential peers included: Carnegie classification, public institution, city size, institution size, mix of full and part-time students, proportion of bachelors and masters degrees and degrees offered in key disciplines, full-time faculty count, ratio of research to instruction expenditures, student/faculty ratio, and admissions selectivity. NCHEMS’ data analysis produced a rank ordered list of 299 institutions based on how well each institution’s profile on the key variables matched the weighted ranges and values identified for CSU-Pueblo. Each institution was assigned a score from 200 (best match) to 1050 (worst match). The highest ranked 43 institutions with scores between 200 and 550 were isolated for further research. The campus working group closely reviewed each institution’s scores on specific variables, mission statement, and array of degree programs, which resulted in the elimination of a number of institutions from the list.

The working group’s recommendations were shared with Deans’ Council, Faculty Senate, and the President’s Cabinet for discussion and review. In late spring, 2004, President Applbaum approved the final list.

RESULTS As a result of this critical review, the following institutions were deemed to constitute CSU-Pueblo’s Peer Institutions:

1. Angelo State University 2. Armstrong Atlantic State University 3. Augusta State University 4. Austin Peay State University 5. California State University-Stanislaus 6. Francis Marion University 7. Louisiana State University-Shreveport 8. Midwestern State University 9. Minnesota State University-Moorhead 10. Southeast Missouri State University 11. The University of Tennessee-Chattanooga 12. The University of Texas at Tyler

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13. University of Michigan-Flint 14. University of Minnesota-Duluth 15. Western Connecticut State University 16. Winthrop University

CSU-Pueblo intends to use these peer institutions as a set that will provide an average for comparison on a variety of factors of interest as diverse as faculty work expectations and salaries to academic calendars to organizational structures. As with other "matched" comparison groups, no single institution by itself would be a valid comparison point. The value of a comparison group is in defining "central tendencies" on factors of interest among institutions with matched missions, programs and other key characteristics. While there may be individual "outliers" in the group on any particular factor, the effects of such outliers are muted by looking only at the central tendency or group average. These central tendencies can then serve as informative comparison points for CSU-Pueblo.

Additionally, the purpose and methods for creating this new peer institution list define it as a current, direct comparison group, not as an "aspiration group." That is, the set will provide information about how other similar institutions perform or decide issues, thus aiding in CSU-Pueblo's attempts to critically reflect on its own, current performance or decisions. This particular group of institutions would not be suitable for setting benchmarks related to CSU-Pueblo's long-term vision for development because the institutions were chosen for how well they match CSU-Pueblo now.

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Appendix B

Cost of Living Comparisons: CSU-Pueblo and New Peer Institutions

New Peer Institutions ACCRA Index California State University-Stanislaus (Turlock, CA) 126.3* Western Connecticut State University (Danbury, CT) 120.1 Minnesota State University-Moorhead (Moorhead, MN) 99.6* University of Minnesota-Duluth (Duluth, MN) 99.6* University of Michigan-Flint (Flint, MI) 98.0* Armstrong Atlantic State University (Savannah, GA) 97.2 Francis Marion University (Florence, SC) 96.1* Winthrop University (Rock Hill, SC) 96.1* Southeast Missouri State University (Cape Girardeau, MO) 94.7 University of Texas-Tyler (Tyler, TX) 94.7 Louisiana State University-Shreveport (Shreveport, LA) 93.4 Augusta State University (Augusta, GA) 92.1 Midwestern State University (Wichita Falls, TX) 90.2 Angelo State University (San Angelo, TX) 89.4 Austin Peay State University (Clarksville, TN) 86.8 University of Tennessee-Chattanooga (Chattanooga, TN) 86.8 Colorado State University-Pueblo (Pueblo, CO) 90.3 *Median ACCRA Index for state.

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Appendix C

Computation of Individual Target Market Salaries

Target market salaries for individuals are estimated based on a series of variables:

the CUPA median salary for particular academic disciplines, target market median time in rank (7 years for professors, 6 years for associate

professors, 3 years for assistant professors), the annual market movement factor (3.20%), individual years in rank (capped at 12 years for professors, 11 years for associate

professors, 8 years for assistant professors), merit adjustment, and cost of living adjustment

Establish the minimum expected faculty salary: MIN SAL = CUPA median multiplied by (1/1.032)median years in rank

Estimate the target market salary: TARGET = MIN SAL multiplied by (1.032)individual years in rank

Adjust the target market salary for merit: TARGET BY MERIT = 2.125% for each tenth of a merit point above or below the merit mid-point of 2.2.

Adjust for median cost of living for peer institution cities or areas: TARGET BY COL = 94.7% for new peers.

Compute the salary differential: SAL DIFF = actual salary – adjusted target market salary.

Illustration Computational Variables

Assistant Professor

AssociateProfessor

Professor

Actual Salary $45,326 $54,211 $60,910 CUPA Median $47,301 $53,156 $63,562 Minimum Salary $43,044 $44,119 $50,850 Years in Rank 2 6 12 Target Market Salary $45,843 $53,297 $74,207 Merit Rating 3.00 2.50 2.00 Target by Merit $53,636 $56,695 $71,053 By New Peers Cost of Living $50,793 $53,690 $67,287

$ 521 Salary Differential -$ 5,467 -$ 6,377

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Appendix D. Salary Differentials for CSU-Pueblo Faculty

Faculty Number Salary Differential 1. -$ 1,241 2. -$20,000 3. -$11,565 4. $ 3,642 5. -$20,000 6. -$ 4,065 7. $ 450 8. -$18,549 9. -$ 9,704 10. $ 386 11. -$ 9,788 12. -$20,000 13. $ 1,923 14. $ 1,049 15. $ 6,282 16. -$ 9,516 17. -$ 729 18. -$ 855 19. -$ 2,774 20. -$ 3,115 21. -$16,805 22. -$ 4,656 23. -$ 3,606 24. $ 1,635 25. -$ 4,386 26. $ 4,207 27. -$ 6,200 28. -$11,840 29. $ 1,345 30. -$11,497 31. $ 824 32. -$ 6,813 33. -$12,115 34. -$ 3,058 35. -$11,451 36. $ 7,503 37. -$ 9,292 38. -$ 137 39. -$20,000 40. $ 1,282 41. $ 2,533 42. $ 4,370 43. -$ 2.051

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Appendix D. Salary Differentials for CSU-Pueblo Faculty

44. -$18,443 45. -$20,000 46. -$11,672 47. -$ 4,502 48. -$ 3,456 49. -$13,178 50. -$ 4,268 51. -$ 7,282 52. -$ 6,016 53. -$ 4,598 54. -$ 6,337 55. -$ 3,181 56. -$11,457 57. $ 525 58. $ 7,041 59. -$ 7,961 60. $ 2,011 61. -$ 5,056 62. -$16,673 63. -$ 4,618 64. -$ 5,875 65. -$18,333 66. -$ 3,888 67. -$16,377 68. -$ 3,748 69. -$ 5,302 70. -$ 7,555 71. $ 3,431 72. -$ 2,907 73. -$ 9,172 74. -$ 2,821 75. -$ 5,547 76. $12,599 77. -$ 6,133 78. -$ 5,620 79. $ 2,081 80. -$ 9,510 81. -$ 6,466 82. -$11,076 83. -$ 3,050 84. -$ 2,262 85. -$12,966 86. $ 2,470 87. $ 2,063 88. -$15,082

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Appendix D. Salary Differentials for CSU-Pueblo Faculty

89. -$13,114 90. $ 738 91. $10,874 92. -$10,248 93. -$ 8,159 94. $ 4,550 95. -$ 5,895 96. -$11,442 97. -$ 9,827 98. $ 2,745 99. -$ 2,101 100. -$ 6,101 101. $ 6,321 102. $ 7,315 103. -$ 18 104. -$ 3,696 105. -$14,114 106. -$ 4,725 107. -$ 9,469 108 -$ 3,755 109. -$ 8,771 110. -$20,000 111. -$ 7,072 112. -$ 4,020 113. -$ 3,467 114. $ 5,278 115 $12,212 116. $ 1,431 117. $ 4,431 118. $ 2,155 119. $14,050 120. $ 5,049 121. -$ 4,365 122. $ 6,400 123. $ 2,317 124. -$ 2,835 125. -$ 569

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