5 Questions for an Equitable Pay Ecosystem

In higher education, the compensation of faculty members often remains shrouded in mystery. Pay practices may be opaque, with decisions made behind closed doors leading to perceptions of inequity and bias. To foster a more transparent and equitable pay ecosystem, university faculty and staff must begin by asking the right questions. These five key questions, which probe the heart of pay practices, can help “crack the code” for fairer compensation systems.

This article is born of the National Science Foundation’s ADVANCE Partnership Project “Let’s Talk Money,” which aims to foster equity in higher education compensation.

1. How transparent are our pay setting processes?

Transparency is the cornerstone of an equitable pay system. Faculty and staff must understand how their salaries are determined.

Transparency involves not just publishing salaries or sharing market data but also explaining the diverse criteria used to set pay. Institutions should strive to disclose factors that influence compensation in relation to starting salary, salary adjustment programs (i.e., merit and cost of living adjustments), and job changes. These are the levers of salary guidelines. In disclosing this information, institutions can demystify the pay-setting process and help build trust within the academic community. It is also important to know who is making those pay decisions and what role they play in the process.

Additionally, institutions should consider implementing regular training sessions and informational meetings to educate faculty and staff about the pay-setting processes. These sessions can cover how salaries are determined, who is involved in these decisions, and what criteria are used. By doing so, institutions can empower their employees with knowledge, reducing the information asymmetry that often fuels mistrust and dissatisfaction.

2. What policies and practices exist around setting and evaluating pay?

It is important to determine if the institution has a compensation philosophy and if it addresses fairness in pay. This philosophy can help employees understand the policies and procedures that influence compensation.

The policies that govern the levers of starting salary, salary programs and job changes are crucial in understanding the compensation practices at the institution. Transparency around how starting salaries are determined, what the considerations are for salary adjustments, and how rank promotions (with the accompanying raise) are determined will help create a fuller picture of the compensation philosophy at your institution. Institutions should establish formal policies that outline the criteria and ensure these policies are consistently applied. Additionally, regular audits and reviews of pay practices can help identify and rectify any disparities, promoting a culture of equity and transparency.

3. How does my organization evaluate external competitiveness and internal equity?

A combination of external factors informed by market data for salary comparisons and internal factors informed by the impact of your role on the institution is how the compensation rate, or the value of a role, is determined.

These internal and external factors should not be arbitrary. They should be guided by a compensation philosophy and the values of the institution. There is no one way for an institution to determine the factors that affect salary, but an institution should be able to show what the rationale is and how it works.

Institutions should regularly review their compensation philosophy to ensure it aligns with their strategic goals and market realities. This review process should include input from a diverse group of stakeholders to capture various perspectives. Additionally, clear documentation and communication of the rationale behind salary determinations can help build trust and transparency within the organization.

4. What opportunities exist to increase compensation system knowledge and/or improve my own compensation?

Effective communication is vital for ensuring that faculty understand their pay and opportunities for advancement.

Institutions should have mechanisms for sharing information about pay scales, criteria for raises and promotions, and opportunities for additional compensation through supplemental roles or retention offers. This communication should be ongoing, not limited to orientation sessions. Regular workshops, accessible online resources and clear documentation can bridge this gap, empowering faculty to engage more actively in discussions about their pay.

5. How do I, and my colleagues, feel about the way pay is discussed and communicated?

If pay decisions aren’t transparent or governed by consistent policies and checks and balances, we know that bias, conscious or unconscious, can creep its way into these decisions. It is important to prioritize transparency in communication with faculty and staff. Pay inequities thrive in darkness. When pay systems are not transparent, it increases the likelihood that the validity of those pay decisions will be thrown into question.

Institutions should prioritize regular, transparent communication about pay policies and decisions. This includes providing clear documentation, holding informational sessions, and ensuring that all faculty have access to the necessary resources to understand their compensation. Institutions should also provide training for pay decisionmakers about how to communicate their decisions and to engage in productive conversations with the faculty they oversee. By addressing these concerns, institutions can foster a more inclusive and equitable environment where faculty feel valued and informed about their pay.

Fostering a Transparent and Equitable Pay Ecosystem

By addressing these five critical questions, university faculty and staff can lay the groundwork for a more transparent and equitable pay ecosystem. Transparency, accountability, systematic evaluation, and clear communication are the pillars of this transformation.

Creating an equitable pay system is not a one-time effort but an ongoing commitment to fairness and inclusion. Institutions must continuously assess and refine their pay practices, ensuring that all faculty members feel valued and fairly compensated for their contributions.