The discussion on merit pay at the May 2 AAUP meeting seemed to us to clarify several things, and led to some suggested issues and merit pay structures that we would like to explore further. (Many of the points noted below were also made at the meeting sponsored by the AAUP and the Merit Pay Committee on April 14, 2000.) First, the discussion helped us begin to disentangle several different components that have frequently been conflated in discussions of merit pay and in our current merit pay system and identify the two, often competing, visions of merit: as incentive and as reward. As we explored these components and visions and their potential problems, the full complexity of trying to achieve an individual merit structure made us turn our attention to alternative models, and in particular to the notion of institution-based merit (also known as a "Unit Performance" merit model). What follows is a summary of that discussion, which we hope will lead to further discussion and exploration of alternative models of merit recognition.

The current merit pay system may reward faculty members with additional increments of salary (e.g., increasing one's base salary by $500) in recognition of extraordinary accomplishment (e.g, a book published), excellent teaching (as measured by student evaluations), important committee or other service work (e.g., chairing an important committee or task force), or an otherwise uncompensated heavy work load (e.g., 6 lecture courses, plus two independent study courses plus supervision of 3 honors' theses). The discussion at the AAUP meeting began to disentangle these elements, recognizing that extraordinary accomplishment is different than performing extra work, whether teaching or service.

The discussion also began to explore the different implications of a merit pay system in terms of faculty perceptions and needs. The need for faculty to have adequate overall compensation is, of course, paramount. Prior to the new salary policy, the only way a Drew faculty member could increase his or her salary was to work to receive a merit pay increment. "Merit," then, was an avenue -- perhaps the only individual avenue -- to increase one's salary to more adequate levels. If the basic compensation policy guarantees a reasonably adequate salary for all faculty, merit pay need not be seen as a way to get adequate compensation. Instead we can explore the other ways that merit can function.

Several faculty mentioned the need for institutional recognition of both our on-going contributions to the University and our extraordinary contributions and scholarly work. This is seen as being very important not only to the sense of satisfaction of the individual faculty member, but also to the University as it is a way of reaffirming the importance of both our academic and scholarly work and of the work we do together for the larger good of the University. Aside from the difficulties of constructing a system to measure qualitatively distinct individual faculty performance in terms of "merit" (about which more below), the most vexed aspect of the issue concerns incentives. For some faculty members, merit pay is entirely about recognition, while for others it is entirely about incentives. (There may be some disciplinary biases at work in these divergent views.) The assumption often made by managers, administrators, legislators, and the like is that employees are primarily motivated by financial reward and that the carrot of extra pay (whether bonuses or additions to salary) is necessary to keep up performance. It is in the institution's interest -- and this includes the faculty -- for faculty members to teach well, keep professionally active, and perform useful service to the university and their disciplines; however, while it may be the case in industry, it is not clear that in education monetary incentives are necessary to accomplish this institutional goal. 

Not only might individual merit pay qua incentive fail to accomplish the institutional goals, it may have two negative results. First, it may create bad feelings or rivalries among faculty members given uneven distribution of such rewards and faculty feelings about the adequacy of the merit pay system in measuring their qualitatively distinct work and accomplishments. Second, to the extent that an individual merit pay system does function as an incentive system (i.e., to the extent that faculty members actively work to do what it takes to earn merit pay rewards), it will tend to reallocate faculty time in the directions of the kinds of work that receive extra monetary reward and away from those that do not. If the current use of faculty time - by individuals, departments or schools - needs to be modified (e.g., to spend more time keeping up to date within the discipline), then that conclusion should be reached through open discussion and not institutionalized in the form of a merit pay system which is both a very indirect way to change the mix of work done and one that is cumbersome to change as changed needs arise. Further, faculty members may feel demoralized if the work they continue to do well is not valued or undervalued by the particular merit pay scheme.

Perhaps the most vexed aspect of individual merit pay is the need to assess the performance of every individual faculty member with all the qualitative differences in the work done on a numerical scale. The problem is the need to reduce the qualitatively different work we do to a one-dimensional scale. There are ways that this can be done, but not without enormous difficulties as one considers fairness, and the issues of incentives, competition and rivalry. On the other hand, a process of recognizing faculty work -- both year in year out work and special achievements and contributions -- can be put into place without having to make difficult comparisons and without having to reduce "merit" to a one-dimensional scale. Recognition could take many forms -- an anniversary of service lunch, invited distinguished research series (with or without stipend), etc. As some have pointed out, such public recognition by itself creates incentives, but does so without skewing the allocation of work as recognition embraces the qualitative diversity of our work rather than necessarily reducing it to a one-dimensional quantitative scale as in individual merit pay. 

But what incentives might help? We are often asked to make extra efforts for the university (admissions events, alumni-related activities, development and other work). This work too needs to be supported. Part of that will occur by appropriate recognition; however, the best way to link extra compensation to the increased commitment and work effort of faculty that is necessary to the health of the university is through a group or institutional (as opposed to individual) merit pay system. Members at the meeting expressed an interest in exploring the possibilities of developing an institutional merit plan along the lines of the salary plan at Wheaton College. In such a model, an index of financial well-being would be agreed upon (and this would obviously require a great deal of discussion as to what constitutes "well-being" and how it might be measured). Essentially, the model would be that if the University did exceptionally well according to this index, part of the extra financial health would go to the faculty in the form of additional salary. (A similar institutional merit pay system might also be appropriate for admissions, development and other offices as well.) If the financial index performed poorly in one year, there would be no merit pay, but also no reduction in faculty salaries. (In the Wheaton model, a percentage of the bonus ion a good year is saved to cover basic salary increases in a weaker year). 

Institutional versus individual merit pay has the advantages of (1) avoiding the methodological difficulties of constructing an acceptable individual merit pay system, (2) reducing inter-personal and inter-disciplinary rivalry, (3) rewarding work that is for the good of the university as a whole, and (4) creating a merit system that minimizes faculty-administrator opposition. In effect, it gets us all to pull in the same direction.

The faculty in attendance at the May 2 AAUP meeting were in agreement that they would like this model to be further explored and discussed as part of the ongoing discussion of an appropriate merit structure.

Sandra Jamieson and Fred Curtis
Co-Chairs, Drew AAUP

Header design courtesy of AAUP-AFT Wayne State University
Last modified June 8, 2000