Paper delivered at ACU HRM Conference, Kuala Lumpur - 2 September 2006
Today I want to talk to you about the huge challenges posed to universities by the increasing competition they are facing – within their own countries in the form of competition for scarce resources, and also internationally due to the increasing effects of globalisation. Not only is that competition from new universities – both public and private – it is also driven by an increasing capacity for students to seek higher education across national borders and for universities to identify themselves as multi-national organisations, with a presence in more than one country – either physically, or increasingly through the internet.
Speaking specifically of business education in Australian Universities, a Carrick Institute study found that:
“To maintain their viability, Australian universities must now compete for business both domestically and internationally.”1
I believe that to be true of other discipline areas and of other countries as well.
New technologies – particularly the internet – have provided efficiencies for universities in course delivery, but it also increases the impetus for competition.
As many of you will be aware, in 2001 the President of the Massachusetts Institute of Technology announced the “MITOpenCourseWare” project in which MIT proposed to make the materials for nearly all its courses freely available on the Internet over the next ten years. MIT is making its courseware available for free, but in doing so has created a resource that can be exploited by those institutions wise enough to do so.
The largest private university in the USA is now the University of Phoenix which offers its degrees “on campus, online, or through a combination of both”.
Individual universities will have to find their specialised niches, not just nationally but internationally.
Finally, there is simply the competition for universities to survive by remaining financially viable and culturally relevant.
An overview of employment practices in universities
Today, I want to look specifically at the way in which we classify and construct academic work and at the ways in which we recognise and reward our academic staff. It is my strong view that employment in universities, and particularly employment of academic staff, is often based on an unconsidered continuation of tradition.
According to Simon Swartzmann, the space within which modern universities have to move is between concepts of academics as either:
- liberal professionals – e.g. the independent medical doctor;
- unionized skilled workers – the direct heir of the medieval guild; or
- civil servants in modern bureaucracies.2
University classification and pay structures have tended to be based on the second and/or third of these models. Lessons from the employment of professionals in private enterprise provide a way forward, both in managing and in restoring professionalism to academic staff.
Classification structures for academics
University academics generally operate within a grading structure which is a variant on either the British or American models. The following illustrative table is taken from an ACU publication entitled “Academic Staff Salaries and Benefits in Seven Commonwealth Countries 2001-2002”:
“Academic Staff Titles
Although Australia, New Zealand, South Africa and Malaysia use the academic staff titles listed here, the UK, Singapore and Canada use different systems. We have equated them as follows for the purpose of comparison:
3
Typically, the functions of academics are viewed as some combination of teaching, research and administration and are associated with pay scales for each grade which are often incrementally based – that is, they provide for regular (usually annual) salary increases based largely on length of service in the grade.
Alternative grading structures
I have been very interested in the implications of what is called “Pay Modernisation” in United Kingdom universities. For those who are unfamiliar with it, I understand it to have arisen partly from dissatisfaction with centralised wage negotiation by the Universities and Colleges Employers’ Association (UCEA). As a result, a compromise was reached in which a national “Framework Agreement for the Modernisation of Pay Structures” was negotiated with higher education unions. This involved a nationally negotiated “pay spine”. You may recall the industrial disruption that attended the recent negotiations over this, which involved academics refusing to mark exams.
Importantly though, this “pay spine” is to form the basis of local pay and grading structures. In a very good paper, Tony Strike of the University of Southampton has pointed out that despite the uniform nomenclature of Lecturer, Senior Lecturer, Reader and Professor in the UK, “… differences in academic roles and status are now quickly emerging within and between institutions to fit increasingly divergent missions given the provided freedom and external pressures” .4
Tony Strike’s paper goes on to outline the approach being taken by the University to Southampton to the development of a pay and grading structure based on a recognition of these differences. He points to the pressures of the higher education unions a force for national uniformity, but also speaks of “competitive pressure where each HEI must not be seen to be disadvantaged for staff recruitment against their peer institutions which is comparative and inflationary by nature” The University of Southampton has responded to this competitive pressure by developing a variety of career pathway choices and, as a result, “the simple ‘ladder’ image is no longer enough to describe the plethora of academic roles and titles found in practice”.
Tony Strike compares the traditional academic career path:
Professor
↑
Reader
↑
Senior Lecturer
↑
Lecturer
with something that looks to me at least much more flexible and relevant:
I do not know how the University of Southampton and other British universities have fared in the exercise, and look forward to some discussion on this during the course of this Conference. However, although considerably more flexible than the single academic classification structure it is intended to replace, I suggest that we are in reality experiencing an even more extreme fragmentation of traditional academic work.
I want to digress here briefly to discuss an important component of academic reality that is often ignored in discussions like this one – that of teaching only academics.
Teaching only academics
A significant pressure point in many universities arises from the fact that many of those who do the teaching do not also do any research of note. In many countries, a fiction is maintained that there is a necessary nexus between teaching and research. We hear of the best teaching being informed by cutting edge research.
In reality, this fiction is sustained through the use of classes of staff employed just to do teaching, but who are variously described as “casual”, “sessional”, “fixed-term”, “short-term”, “non-faculty”, “non-tenure-track” or “contingent faculty” staff. Historically, this class of employees has been considered as a supplementary or peripheral labour force, but they now account for a significant component of key staff delivering academic programs in many universities.
According to the Association of American Professors:
“Today, 46 percent of all faculty are part-time, and non-tenure-track positions of all types account for 65 percent of all faculty appointments in American higher education. Both part- and full-time non-tenure-track appointments are continuing to increase, with the most rapid growth in recent years occurring in full-time positions off the tenure track.
Excessive use of, and inadequate compensation and professional support for, such contingent faculty exploits these colleagues and undermines academic freedom, academic quality, and professional standards. It is essential to improve the compensation and professional support opportunities for contingent faculty.”5
We can pretend that all real academics engage in research because we define those who do not as being something other than real academics. This too may be breaking down.
Professor Sandra Harding, who has just been announced as the next Vice-Chancellor of James Cook University in Australia, has said:
"Universities must also ensure that industrial relations work to enhance the business, rather than work against it. Universities will have to consider other employment options, like teaching only positions, perhaps even US-style arrangements where academics are paid for nine months work (Coaldrake and Stedman 1998) with the option of earning additional income over summer through additional teaching or funded research.6
In my view, there is a need to reconcile the disparity between regular / tenured academic employment and these forms of less secure employment. In the Australian context where the conditions of employment of these types of staff has sometimes become an industrial relations issue, I have suggested that in order to improve their security of employment, we need to significantly alter aspects of the employment of tenured academic staff. Usually tenured academic staff don’t like that idea, however sympathetic they are to the plight of their less securely employed colleagues.
But the question remains for human resources professionals – how do you employ, pay and reward these important people?
Further fragmentation of academic roles
It is sometimes assumed to be consistent with the professional nature of academic work that academics are engaged in all aspects of work relating to their discipline, including:
- subject/course design
- subject/course preparation
- subject/course delivery (i.e.) teaching
- subject/course assessment
and often:
- research; and
- postgraduate teaching
in the same discipline or field.
This has been referred to by Sir John Daniel as the “cottage-industry model” in which “the habit … is for the same individual to do everything: develop the curriculum; organise the learning resources; teach the class; provide academic support; and assess student learning”.7
This model – which is perhaps most closely allied with the view of academics as generalist skilled workers – is breaking down in a number of areas. Increasingly, higher education is being delivered on-line, by distance education or internationally, and it is in these areas that fragmentation or desegregation of academic work is most pronounced.
It makes great sense and is certainly more efficient to have courseware designed by a specialist and converted to on-line learning modules by another specialist. Given the distances involved, it is clearly cheaper in many cases to hire local teachers to deliver the pre-set course content. The resultant work is necessarily narrower than the range involved in academic work in the traditional mode.
Interestingly to me at any rate, is the similarity between this trend and that described by Schwartzman:
“The craft professions were affected, however, by two important trends. The monopoly they retained on their specialized skills was eroded by the introduction of modern machinery, the division of labour of modern industrial production, and the development of organized technical training. And the introduction of large-scale employment made the independent craftsman and his family a thing of the past”.8
Again, how do you fit these specialists within an appropriate academic career and remuneration structure?
Remuneration
The salary scales associated with academic work in most universities are usually based on a single classification structure, involving a promotional or career path though a number of hierarchical grades, and with salary increments within a grade usually based on length of service. In that, they look very much like the salary structures in career civil or public services. Perhaps it should not be surprising then, that academics sometimes conform to Schwartzman’s “civil servant” model.
The reasons for this type of salary structure are usually similar to those that gave rise to such arrangements in the public sector. They are premised on the expectation that employees will spend the majority of their working lives within a single career structure, and often with a single employer and/or job for life.
That assumption is becoming increasingly irrelevant in a number of universities, particularly with their growing emphasis on professional, rather than generalist education. In such a case, universities are increasingly drawing on those already practicing in their professions to teach their students.
Instead of spending their entire career in higher education institutions, an increasing number of academics are sharing their career between practicing their professions and contributing to their maintenance through teaching potential new professionals in universities. This can take many forms, from part-time teaching, to periodic terms in academia to treating teaching in a university to yet another consultancy amongst other professional consultancies.
How do you propose paying and rewarding these people within your model of academic employment?
A developing phenomenon in Australia is the engagement of academics not as employees, but as consultants or contractors of their services. Commonly under this model, professionals are engaged to teach a particular unit of study for a total payment. Often the legal relationship is between the university concerned and a consulting company owned by the academic, which in its turn acts as the actual employer.
There have been attempts in Australia – none really successful so far – to set up academic employment agencies with which one could contract to provide the services of academics without a university actually employing them.
Career and remuneration structures premised on a model of an academic career entirely occurring in universities is unlikely to suit these new types of academics. The inflexibilities of such a salary system are often complained of.
Professor Steven Schwartz recently returned to Australia from the UK where he had been Vice-Chancellor of Brunel University. He is now Vice-Chancellor of Macquarie University in Sydney where, many years ago, I attended university. Soon after his return to Australia, a specialist higher education publication in Australia – Campus Review – reported:
“Commenting generally on academic salary structures in Australia, Schwartz is struck by the lack of flexibility here, noting that in most other parts of the economy, people are paid the salary they’re worth.
‘This idea there’s a fixed salary and some kind of artificial loading is pretty old fashioned and it makes it harder to remunerate people,’ he said … He maintains that engagement with industry opens up opportunities to change salary structures, a move he believes would be supported by unions, because it would lead to greater financial rewards such as shares and license fees.”9
I am not sure that unions would support the sort of reforms he was envisaging. In my experience, higher education unions are much more comfortable with a public service grading and salary structure, largely because this tends to give the unions the capacity to negotiate changes to pay in a way that applies to all staff at the same time. For unions there are efficiencies and increased recruiting opportunities in that approach, as well as comfort in the fact that they tend to promote a sense of equity and homogeneity amongst academics.
That, of course, is no reason not to do as Professor Schwartz suggests.
In addressing the need to be both competitive and to motivate staff, universities have generally retained public service like salary structures but are increasingly adopting what Steven Schwartz calls an “artificial loading”, often in the form of a market or performance related bonus which is paid on top of the substantive salary.
Steve Shelley, in an article entitled “Diversity of appraisal and performance-related pay practices in higher education refers to the common practice of paying “unconsolidated bonuses to individuals” 10 which is perhaps another way of saying the same thing.
Performance management
Increasingly, universities are introducing performance management systems, but the linking of performance to a substantial proportion of an academic’s remuneration is still relatively uncommon. This is in spite of an increase in the use of discretionary pay reported by Michael Jackson in his article “The impact of discretionary pay in UK universities”11, amongst others.
One of the difficulties universities face with the introduction of performance management schemes is the existence of other performance related recognition and reward systems – most notably academic promotions schemes. While these schemes provide a significant motivation for many academics to perform well, they often reward individual rather than institutional goals and are notoriously poor at identifying and dealing with poor performers. They also find it very hard to reward non-traditional academics.
I believe there are two major challenges in relation to performance management of academics. The first is to provide for performance management of those non-traditional academics – those who don’t have access to academic promotion schemes or to whom it is irrelevant. The second is to integrate performance management systems already applying to traditional academics with other performance management tools, particularly those that can deal adequately with poor performers and adequately reward the “high fliers”.
Current incremental arrangements typically reward long service and not performance. Typically in Australia, the lowest academic grade of Associate Lecturer has 8 annual incremental points and each is a single salary step rather than a range. What message does this send other than that length of service rather than performance is the primary determinant of pay?
How might things be done differently?
In order to establish and maintain a performance culture, many modern organisations establish a clear link between performance and remuneration. This creates a need to measure performance and describe good performance, usually against some form of capability matrix. Such a task ought not be beyond universities – many have already established the basis for doing so through their existing performance management schemes.
Performance related bonus schemes even exist in some universities – what Professor Schwartz calls “a fixed salary and some kind of artificial loading”. But performance pay can be much more integrated into remuneration than that.
Although service based pay increases are not uncommon in other professional services organisations, they are often supplemented by a significant performance-based pay component. Under such a scheme, instead of a single salary point, an employee becomes eligible each year for a salary within a defined range. Their actual salary is then based on their performance and contribution as assessed by a performance management scheme.
For universities to move in this direction might involve them in collapsing or broadbanding lengthy existing incremental scales to make way for a series of performance based salary ranges. This diagram might illustrate the type of arrangement I am thinking of:
An employee in, say, their second year in the first grade might have a salary derived from any point on the salary range, depending on an assessment of their performance. It would be possible to establish a number of points along these ranges and allocate them in accordance with an employee’s performance ranking.
In this example, the top of one performance range is the same as the bottom of the next, but it is possible to imagine models in which there was a clear gap between ranges or, indeed, where they overlapped – why shouldn’t a highly performing Lecturer be paid more than a badly performing Senior Lecturer?
One could also consider the relative weights one wanted to give to service on the one hand, and performance on the other. I’m interested in your views on these issues.
The role of human resources professionals
There is a competitive imperative in play. Unless universities address these issues they will find themselves unable to attract or retain the staff they need, or they will find themselves delivering a lesser product or delivering it more expensively than their competitors.
In my view, human resources professionals in universities can become strong advocates of change in their institutions and assist them to recognise competitive disadvantages arising from traditional employment practices. They will only be able to do so, if they understand that the way things have been done in the past are not the only way – and are likely to be an increasing burden on universities as they attempt to meet new competitive challenges.
I found it of considerable interest to read that a 1999 UK study has found that “most of the personnel directors interviewed who had moved into their post within the last three years had done so from the private sector”12. I suspect there is a similar trend elsewhere, and am encouraged that such people will bring new perspectives with them.
What might human resources professionals do? I have suggested that there is an important need for them to consider the appropriateness of their universities’ academic classification and reward structures to ensure that they:
- are appropriate to ALL employees
- recognise and reward good performance
- identify and address performance problems
- are flexible enough to attract and retain good staff
_______________________________
Notes
1. Cecez-Kecmanovic, D; Juchau, M; Robert Kay, R; Wright, S, “Australian Business Education Study: enhancing the quality of Australian business education (2002)”
2. Schwartzman, Simon, “Academics as a profession: what does it mean? Does it matter?”, Paper prepared for the International Conference on Higher Education, Stockholm, Sweden/ Turku, Finland, 13th to 15th August 1993.
3. Maxwell, Jennifer & Murphy, Derek, “Academic Staff Salaries and Benefits in Seven Commonwealth Countries 2001-2002 Revised version August 2003”, Association of Commonwealth Universities Survey
4. Strike, Tony, “Evolution in academic career structures in English Universities” Paper from OECD/IMHE Conference on “Trends in the management of human resources in higher education”.
5. American Association of University Professors, statement on Contingent Faculty Appointments
6. Harding, Sandra, “The Future of Academic Work: Teaching and the University Resource Base – Recognising Value, Identifying and Managing Risk”, Keynote address delivered at AHEIA Conference 2001: Industrial Horizons, 29 March 2001
7. Daniel, J. (1999) “Distance learning in the era of networks. What are the key technologies?” Paper presented to Commonwealth Forum on Open Learning, Brunei, 1-5 March 1999
8. Schwartzman, Simon. op cit.
9. Campus Review, Vol 16, No 4, February 08, 2006
10. Shelley, Steve, “Diversity of appraisal and performance-related pay practices in higher education”, Personnel Review, Vol 28, No. 5/6, pp 439-454
11. Jackson, M.P. (1997), “The impact of discretionary pay in UK universities”, Higher Education Management, Vol. 9 No. 2, pp. 99-114
12. Jackson, M.P., “Personnel management in UK universities”, Personnel Review, Vol 30, No 4, pp 404-420.
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