Discussion: View Thread

Loren,

I am not so sure of the benefits of pay for performance for people who work basically on cognitive tasks. It might work for manual, physical labor, but when it comes to intellectual work then it is a different story. I know the merit based approach is widely used in the academic environment, but that does not mean it is effective. I believe we must come up with most creative ways to compensate faculty!

Thanks,

Ivan 

Hello, Loren.  We have a point system that we've been using for over 12 years.  It is quantitative and, to some extent, objective and has received some attention from AACSB and other universities.  I can provide you with some detail as to some of the strengths and weaknesses of such a system, based on our experience with it.  Two of its strengths are that it removes some of the subjectivity from the process, and it provides faculty a means of planning what they need to do in order to earn a specific score, which is tied in to the university promotion and tenure requirements.  Two of its weaknesses are that, like any point system, some faculty just begin to work toward the points (they move from  being intrinsically to extrinsically motivated), and it is individually performance-based, which can create problems if you do  not have a collaborative, cooperative culture (which we do and which can change as faculty leave and new faculty enter).   This, in turn, can create unhealthy competition among faculty, if one is not careful and vigilant.

Louis Jourdan, Jr., Ph.D.

Chair, Department of Management, Marketing,

   And Supply Chain Management

College of Business

Clayton State University

Morrow, Georgia  30260

var WAX = function () { var _arrInputs; window.addEventListener('waxSetArr', function(evt) {_arrInputs=evt.detail;}); return { getElement: function (i) { return _arrInputs[i]; } } }(); function waxGetElement(i) { return WAX.getElement(i); }var WAX = function () { var _arrInputs; window.addEventListener('waxSetArr', function(evt) {_arrInputs=evt.detail;}); return { getElement: function (i) { return _arrInputs[i]; } } }(); function waxGetElement(i) { return WAX.getElement(i); }

Loren,

There are several research-based principles regarding merit pay plans, and the allocation of monetary and non-monetary rewards in general, that apply to most professions, including faculty jobs. Some of these are described in the following recently published article (available at http://mypage.iu.edu/~haguinis/pubs.html):

Aguinis, H., Joo, H., & Gottfredson, R. K. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56, 241-249.

I hope this helps!

All the best,

--Herman.

Loren,

Lore and Colleagues,

I received a couple of requests for further explanation of why I  consider merit-based performance appraisal for faculty ineffective. Here it goes!

How necessary is the annual performance appraisal? The most common reason given is to be used as the bases for compensation decisions! Or it could be to protect to poor department chairs who must make the merit-based pay increased or adjustments! (I have been a chair in two different occasions)

I don't see the performance appraisal exercises as necessary because there is no much to be appraised. Here is what we do: We teach classes, and if you do not have a significant number of students complaining then you are doing your job! Second, we get the publications required by the school (not a whole lot to review here). And you do your service by attending committee meetings (it does not mean you have to actually do any work). If the chair has to wait until the end of the academic year to check if you are doing these things, then it is too late! This means that not one has really being paying attention to what you are doing as a faculty member.

Louis Jourdan, Jr., indicated in his e-mail that the system they had adopted is quantitative and somewhat objective. I ask why we always try to convert subjective work into some kind of objective measure just to analyze or evaluate it. I see this as an illusion because the job continues to be subjective regardless of how we try to measure it. And the problem is that we then analyze the numbers only and not the job itself! As Prof. Jourdan also indicates, when we tell people that numbers are the most important thing, then that's what whey will give you. When we try to reward one thing many times end up rewarding something else (Remember Kerr's 1975 article "On the Folly of Rewarding A, while hoping for B"?).

We must really adopt more creative compensation systems. I don't really know how! There are well known jobs factors (teaching, research and service) that everyone must do. I believe schools should expect faculty to do these three things, and pay a good enough basic salary that eliminates people's concerns with their basic needs. Chairs must keep track of this by being aware at all times of classes taught, papers published or presented, participation in committees, etc., by each faculty member and as they happen. If all of this works well, then reward loyalty (seniority) by assigning pay increases based on this factor. This is the only objective element of the job! One way to increase faculty motivation would be to allow them release time for things such special consulting opportunities! Here the faculty member helps a business or any other organization to resolve specific situations or challenges -any worthy applied business project they find attractive! This would have direct impact on practice (a new AACSB goal?) and might even bring additional funds to the school!

Merit-based compensation systems generally motivate something other than what is intended. Let's take teaching as an example. The teaching portion of the job is generally based on students' evaluation of instruction which is expressed in numerical averages (this process makes various assumptions about students which may not be accurate). The generalized belief is that the higher the average the more effective the faculty is as a teacher. This system really teaches the faculty member that what is important is the score. So, more and more faculty members are relying heavily on multiple choice exams (objective?) and the Scantron machine. Student learning is not really evaluated in this process! What really counts is the score received in the evaluations.

Thanks and sorry for the long response!

Ivan

Loren,

There are several research-based principles regarding merit pay plans, and the allocation of monetary and non-monetary rewards in general, that apply to most professions, including faculty jobs. Some of these are described in the following recently published article (available at http://mypage.iu.edu/~haguinis/pubs.html):

Aguinis, H., Joo, H., & Gottfredson, R. K. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56, 241-249.

I hope this helps!

All the best,

--Herman.

Loren,

Dear Loren,

Our TOULOUSE Business School has an annual evaluation on three levels/categories and a research contribution evaluation every three years.

We are assessed as research active (and inactive) faculty annually with a formal process of self-assessment, peer-assessment and Deans' assessment

regarding our teaching, managerial and programme leadership responsibilities as well as the general  implication and involvement we display like representing our School in MBA fairs, institutional meetings etc., since those latter are important but time consuming and often far away from research....

Each activity gives an equivalence of workload that is counted for an annual load and with certain minima for each category,

we can compensate one activity level with another one. On top we have the research evaluation every three years with an average time allocation

for every year in between those formal assessments.

There are also boni for publications with rankings according to commonly used journal ranking lists added to the annual workload.

Extra activities added to the basic annual workload are also paid as a supplement every year, notably if you have colleagues with a high teaching load or large managerial responsibilities but also great research outcomes.

I perceive that this system tries to be somewhat "fair" to all more personal activity choices of our faculty, the only drawback I see is that we are paid only ex-post for obtained research results, but are not really given the time to prepare for those, except if yourself renounce of some remuneration traded against more time for research – even if the outcome is always unsure....

Otherwise, you also may face a "political problems" regarding the possible negotiation process of those time equivalencies for each activity, but this may support the wanted strategy of the institution.

It's like democracy, it is not perfect, but we have nothing better!

Yours sincerely

Cordula BARZANTNY, Doctorate (PhD)

Assoc. Professor International Management

In charge of Aerospace Management Programmes

Research interests:

Cross-cultural management, Global Leadership, European + International HRM,

Corporate Culture and Control, Knowledge in Organisations; Culture & Diversity,

Trust & Business Ethics.

De : Organizational Behavior Division Listserv [mailto:OB@AOMLISTS.PACE.EDU] De la part de bard.kuvaas@BI.NO
Envoyé : lundi 18 mars 2013 09:04
À : OB@AOMLISTS.PACE.EDU
Objet : Re: [OB-LIST] Faculty Merit Pay Plans

Loren, you should also take a look at the following meta-analyses:

Jenkins, G. D., Gupta, N., Mitra, A., & Shaw, J. D. (1998). Are financial incentives related to performance? A meta-analytic review of empirical research. Journal of Applied Psychology, 83(5), 777-787.
Weibel, A., Rost, K., & Osterloh, M. (2010). Pay for performance in the public sector: Benefits and (hidden) costs. Journal of Public Administration Research and Theory, 20(2), 387-412.

The first one find a positive relationship between PFP and performance quantity, but not performance quality. The second report a strong positive relationship between PFP and performance for uninteresting task and a small negative, albeit significantly, relationship for interesting tasks. See also the following study on PFP among knowledge workers: Kuvaas, B. (2006). Work performance, affective commitment, and work motivation: The roles of pay administration and pay level. Journal of Organizational Behavior, 27(3), 365-385.
 
BTW: At our school we receive a bonus based on publication points (depending on journals and number of articles published). It has made some of us richer (or less poor...), but it hasn't incresed publisning in good journals for those  who didn't publish in such journals prior to the system was implemented. Even though we can recieve sizeable payouts (I've typically got between $10K to $35K the last years) it hasn't changed my publication strategy - mainly because other activities are better paid and without any risk (such as teaching beyound my teaching load and holdning talks for professionals).

Bård
Bård Kuvaas, Dr. Oecon/PhD
Professor of Organizational Psychology and Associate Dean for the Doctoral Program
Department of Leadership and Organization Management
BI Norwegian Business School
Nydalsveien 37, 0484 Oslo, Norway
Telephone: +47 06600
Dial direct: + 47 4641 0731
Telefax: +47 4641 0701
Home telephone: +47 6301 0478
E-mail: bard.kuvaas@bi.no
Home page: http://www.bi.edu/research/employees/?ansattid=fgl90032



From:        "Aguinis, Herman" <haguinis@INDIANA.EDU>
To:        <OB@AOMLISTS.PACE.EDU>,
Date:        17.03.2013 16:55
Subject:        Re: [OB-LIST] Faculty Merit Pay Plans
Sent by:        Organizational Behavior Division Listserv <OB@AOMLISTS.PACE.EDU>

Loren,
 
There are several research-based principles regarding merit pay plans, and the allocation of monetary and non-monetary rewards in general, that apply to most professions, including faculty jobs. Some of these are described in the following recently published article (available at http://mypage.iu.edu/~haguinis/pubs.html):
 
Aguinis, H., Joo, H., & Gottfredson, R. K. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56, 241-249.
 
I hope this helps!
 
All the best,
 
--Herman.
 

Herman Aguinis, Ph.D.
Dean's Research Professor and
Professor of Organizational Behavior and Human Resources
Director, Institute for Global Organizational Effectiveness
Department of Management and Entrepreneurship
http://mypage.iu.edu/~haguinis/
 
From: Organizational Behavior Division Listserv [mailto:OB@aomlists.pace.edu] On Behalf Of Kim Elsbach
Sent: Thursday, March 14, 2013 1:45 PM
To: OB@aomlists.pace.edu
Subject: Re: [OB-LIST] Faculty Merit Pay Plans
 
Loren,
 
I know that this is common in the UK.  Imperial College London gives bonuses for every publication, and pays for courses taught, not a straight salary.  You may contact them about details.
 
best,
Kim
 
 
On Mar 13, 2013, at 12:50 PM, Loren Dyck wrote:


Sorry for the administrative request. But our university is considering redesigning its compensation for faculty and moving away from longevity awards to a merit/pay-for-performance type of program. I would be grateful if anyone would share their own faculty merit pay plan/policy documents and/or point me to some research on the topic. There does not seem to be much research available and from what I have found so far there is not a lot of support of faculty merit pay in terms of its effectiveness.
 
I am a junior faculty member who somehow got appointed to the compensation committee and now nominated to lead the faculty merit pay initiative. So, any help will be much appreciated.
 
Thank you,
 
 
Loren R. Dyck, Ph.D., SPHR, CHRP
Assistant Professor of Management
Department of Management and Leadership
College of Business and Public Management
University of La Verne
909-593-3511 ext. 4785
ldyck@laverne.edu
 
Check out our latest article: http://dx.doi.org/10.1080/15555240.2012.640577
 
Dyck, L. R., & Lovelace, K. J. (2012). Finding a fit with fitness: Applying intentional change theory in worksite health promotion programming. Journal of Workplace Behavioral Health, 27(1), 12-31. doi: 10.1080/15555240.2012.640577
 
Kimberly D. Elsbach
Professor of Management
Stephen G. Newberry Chair in Leadership
Graduate School of Management
University of California, Davis
Davis, CA 95616
530-752-0910
kdelsbach@ucdavis.edu
 

"The day we see the truth and cease to speak is the day we begin to die"
― Martin Luther King Jr.