Five Ways to Enhance the Effectiveness of HR Design

This fall marks my ninth academic year at UW–Madison. During my time here I’ve experienced our human resources system in many ways—as a new mother seeking a maternity leave (twice), as a temporarily disabled employee in need of a leave, as a frustrated faculty member seeking a raise, and multiple times as the director of a large research project trying to hire and retain qualified classified and academic staff. I know firsthand that the system needs to change in order to realize our campus goals of equity, efficiency, and effectiveness.

That is why I have taken seriously the HR Design team’s request for input from shared governance units, spending significant time studying the plan, and commenting on it in multiple venues. I think further adjustments to the current plan are required, because my own knowledge of higher education reform efforts and the scholarly literature on work and organizations suggests that as currently formulated it will have significant unintended consequences, eroding some of what we value most about our university. Therefore, I am providing five recommendations for revising the plan so that UW–Madison’s approach to the management of human resources continues to reflect an ethos that prioritizes egalitarianism over ego, and recognizes that our greatest resource is our communal passion for and commitment to our work, rather than the competitive yet aimless striving for prestige that has overcome many of our peer institutions.

Recommendation 1:Expand the plan’s current living wage provisions to include workers at businesses receiving university contracts of $5,000 or more and student hourly employees.

The current plan calls for the implementation of a living wage policy that omits two groups: student hourly workers and contracted employees. Including contracted employees would bring the policy in line with the City of Madison’s living wage provisions. Their exclusion creates an incentive for the university to outsource more functions, which may increase efficiency but will also erode job security. In addition, providing a living wage to contractors and students helps ensure at least a modicum of equity among all people working in our community.

           

Recommendation 2: Revise the compensation philosophy guiding the plan to make internal equity and collective performance the primary, rather than secondary, compensation drivers.

The current plan repeatedly emphasizes enhancing “individual potential, opportunity, and achievement,” which, while important, overlooks the critical role played by teamwork in providing high-quality learning experiences and producing innovative research. The 21^st century research university increasingly requires collaboration across disciplines and units, creating work environments where people trained in different disciplines (and who are thus part of different labor markets) work alongside each other. The plan briefly acknowledges this, but the compensation strategies it outlines focus first on the role of market competitiveness (noting that it will be a factor in establishing compensation) and only secondly (and far less frequently) on internal equity. The roles of these factors should be reversed in each section. After all, the compensation work team (which, as an aside, did not include any non-administrator faculty members) recommended that market value be considered in setting wages but said nothing about de-valuing or de-emphasizing equity (although it appears the committee did not consider alternative, equity-focused models of compensation at all). It is reasonable that the committee wanted to add market-based pay to the mix of compensation drivers. However, the extent to which this driver should be emphasized, and how to assess cross-departmental collaborations taking into account diverse disciplinary “markets,” are very complex questions deserving a more careful work.

Recommendation 3: Require mandatory training for all managers tasked with setting employee compensation and/or benefits.

Given the highly decentralized nature of the plan, managers will almost always be faculty members, and yet most would acknowledge that they are not trained for or comfortable with performing human resources functions. The compensation work group noted this among its concerns, stating, “Another concern is that not all faculty and staff supervisors will assume responsibility to fairly, objectively and consistently implement formal performance evaluation processes.” This is too important a role to be left to the untrained, but the efficacy of this plan relies exclusively on their responsible participation in the training. It is especially important to give managers guidance about how to conduct and utilize market analyses in departments and units where scholars from different disciplines work side by side (thus creating much potential for internal inequity), and also to train them in assessing the comparable worth of similar yet unequal tasks. The current plan notes that a lack of training for managers was named as a problem in the listening sessions and mentions the training of hiring managers, but says nothing about rigorously training those who set compensation.

Recommendation 4: Alter the recommendation in the plan associated with shared governance to focus on joint decision making rather than advice and input.

The recommendations on shared governance, particularly with respect to development of the compensation pay plan and changes in benefits (leave, insurances, etc.) stress that the shared governance institutions, specifically that of the newly created University Staff, provide advice and input to the administration afterthe plan is developed. This is not indicative of a collaborative or shared governance model. While at many institutions shared governance merely requires the involvement of faculty, staff, and students as listeners and occasional speakers, this is not the historic practice at Madison and shared decision-making responsibilities should not be eroded through changes to language in specific plans like these.

Recommendation 5: Require mandatory performance reporting and accountability metrics for the new HR System.

At minimum, the plan should explain which reports should be produced and what consequences will be associated with performance. For example, public annual reports should assess changes in internal equity (between faculty and staff, among groups with regard to gender and race), faculty and staff turnover, and the absolute and relative number of positions that are university employees versus contractors. These reports should be presented to both the Faculty Senate and the Academic Staff Assembly (and the shared governance body of the University Staff), and the senior leadership council should describe what responses to the plan will take place should inequity, turnover, outsourcing, or other negative unintended consequences of the new HR design emerge or worsen.

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Equity, Performance, and Employee Compensation

Every employee at UW-Madison believes they deserve to be paid more, and the vast majority are right. It's time we recognize and begin to address the fact that most workers across Wisconsin are underpaid--in UW and far beyond. Increasing compensation for everyone in the bottom half of the income distribution should be a state and national priority, especially given the evident and long-lasting consequences of widening income inequality.

Unfortunately, the HR Design plan at UW-Madison is nearly silent on the issue of raising compensation for all currently underpaid employees. Instead, it focuses on how compensation levels will be determined and how raises will be distributed when money is available.  It does nothing whatsoever to make sure more money is available. Remember that-- don't allow the desire for more pay to lead you to blindly accept the terms of a plan that doesn't bring more pay but rather changes the terms on which you are paid.  

The biggest change related to compensation in the HR Design is the new and explicit attention to "market competitiveness" in setting compensation levels and determining raises. This is a response to the status quo, which has been identified as a problem with this statement:

"State law prohibits UW–Madison from giving unclassified employees performance-based pay raises unless they are part of an annual pay plan—and there has not been a pay plan in four years" (p. 24).  

What exactly is the problem?  Is it that performance pay cannot be given outside of annual pay plans? Or is it that there hasn't been a pay plan in 4 years? These are two separate issues, and should be tackled separately.  The first is about pay equity, and the second is about the consequences of austerity agendas.  Current discussions conflate these issues-- employees are upset about the lack of a pay plan and thus some are desperate to agree to anything that leads to pay, for anyone, no matter the consequence. That's a recipe for disaster.

It seems the HR team has concluded that the former issue must be addressed and therefore proposed mechanisms for awarding performance pay even in the absence of a pay plan by calling for a model that "balances market competitiveness and internal equity."  Essentially, instead of developing a new model for UW-Madison that leverages scarce resources for fair and humane treatment of all employees, this model opens the door to further growth in salary inequities across and within units.  It does this by promoting salary increases based at least partly on market competitiveness without explicitly requiring attention to internal equity, as part of both the compensation philosophy and the roles and responsibilities of managers.

The reasoning provided for this approach is fallible. We are told that employees want their pay based on market competitiveness-- yet the survey questions utilized in the employee polls ask about these issues in isolation. A better approach would ask employees to rank their preferences-- a pay plan distributed equitably, with some additional pay for performance; pay distributed inequitably, with no overall pay plan provided, etc. In other words, when presented with a false choice, it isn't at all surprising that employees choose to protect themselves. But what we're given here isn't our only option.

A review of extant research leads me to conclude that pay for performance has uneven effects in environments like UW-Madison. The main issue at Madison and across Wisconsin is that pay levels are low-- not that they aren't tied to performance.  Tying pay to a combination of performance and equity will reduce, not enhance, the transparency of the compensation process, and thus likely increase the sense of injustice that already pervades campus.  Basing pay on an unspecified assessment of market value will lead employees to feel even more left out of the process, making them even unhappier. In other words, it is likely that HR Design will do nothing to improve the feelings among UW employees that their compensation levels are unfair and inappropriate.   It may even make things worse.

As an alternative, I therefore propose the following revisions to the HR Design's compensation plans:

(1) Make internal equity a priority in the setting of compensation by describing it as an explicit priority central to the compensation philosophy and part of the compensation function's roles and responsibilities.  Educational institutions are unique environments that place a priority on collaboration, including across disciplines, and it is for the good of our teaching and research at UW-Madison that we be allowed to prioritize internal equity when distributing any and all forms of compensation.  This is an essential revision of state statutes and one we should fight for.

(2) Clearly define the terms "market," "performance," and "merit" in the plan and delineate among them. Be clear, which types of pay result in base increases, and which do not?

(3) Provide explicit guidance to managers working with employees who work across units or in interdisciplinary settings. These areas are where pay based on markets are likely to do the most harm - imagine the sociologist teaching alongside the economist in the same department, where the latter professor (most often a male) out-earns the former (usually a female) 2 to 1. It happens under our current system, and is demonstrably counterproductive. These are the types of problems we can and should fix in order to enhance our ability to retain workers and ensure their flourishing.

(4) Include all employees-- included contracted employees--in the plan to provide a living wage.
 The only people who will clearly benefit from HR Design in terms of current base pay are those at the bottom of the pay scale who will remain university staff and will now receive a living wage under this plan.  The number of people meeting that description is not mentioned in the plan.  That number should be considered in relation to the likely number of jobs that are currently university staff jobs and will instead be contracted out to save the university money. The City of Madison pays living wages to all contractors on contract over $5,000.

UW-Madison should take the lead in reducing income inequality in Wisconsin, not exacerbating it. We are national leaders when it comes to our collective devotion to our work, and that strong intrinsic motivation should be leveraged whenever and wherever possible.  No, it should not be exploited--as it now is-- to justify underpaying us. But do not let the poor practices of our neighbors compel us to lose what's great about our community--we have no desire to become a "winner take all" society.

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More Questions on HR Design

In advance of this afternoon's meeting, I received this very helpful document from the Wisconsin University Union, which summarizes the HR Design plan elements and how they compare to current practice, while raising some critical questions about each element.

Here are some questions that I think are especially deserving of response:

• Will the university staff assembly, created by HR Design, preempt or potentially undermine the re-establishment of unions?  
• Why aren’t all contractors (over $5K) included in the living wage provisions, consistent with the City of Madison policy? UW has shifted to using contractors for custodial and food-service positions, and currently pays custodians just $8/hour. 
• What provisions prevent a hiring authority from defining the “employing unit” as so limited as to “force” a layoff? 
• What is the evaluation plan to assess the impacts of these radical changes?

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Concrete Suggestions to Improve HR Design

This evening my colleague Bruce Thomadsen, professor of medical physics at UW-Madison, shared several concrete recommendations for improving the HR Design plan.  I think highly of his suggestions, and thus with permission I am summarizing the most critical ones here:

1. Affirm the continuation of genuine shared governance, a pillar of UW, in this plan.  The language implies that employees will advise on the implementation of benefits programs, but this is far weaker than the current status of shared governance at our university.  Decision-making must be shard.
2. Amend the plan to clearly state that academic staff have the right to due process with respect to all University actions detrimental to their jobs. This is not currently clear, especially with regard to layoffs.
3. Provide much more detail on the implementation of the layoff procedures. In particular, explain how the new system will increase, rather than decrease, job security.
4. The plan says that hiring managers will set salaries.  Clarify how this will be accomplished, and be specific about the types of information that will be considered and in particular the role that market studies will play.
5. The plan discusses the challenges of creating a system of job titles and compensation levels that match the titles. The difficulties and process are listed, but it is not clear that the results will eliminate the problems encountered frequently in providing adequate compensation for long-time, experienced employees, where only by changing a job title (and, therefore the job description) can increased compensation be provided. Often, such changes are not possible or allowed. The solution is to uncouple the job title from compensation to give flexibility and establish compensation based on qualifications and performance. This would eliminate the problem of adjusting the compensation for persons at the top of their job classification’s pay range. 
6. The Guiding Principles for HR Design aimed to eliminate the disparity where 12-month faculty receive 22 leave days immediately upon hire while university staff start with a low number and work up to this through seniority and promotion. Instead, all employees should start with the full number of leave days. But this plan apparently lowers the beginning leave days for new faculty, moving in the opposite of the intended direction. To fix this, change the plan: all full-time University employees should have 22 vacation and personal leave days, with leave for employees with 9-month appointments prorated by ¾.
7. Under this plan, it is not clear what will happen to the conversion of accrued sick leave at retirement. Clarify this, leaving sick leave separate from other vacation and personal leave, and the current sick-leave accrual policy unchanged.
8. Eliminate the provisions to change rules regarding transferring positions. The plan eliminates the current right for employees to return to their original positions if a transfer to a different position does not work. The report states, “Also, by reducing the risk associated with accepting a new position, the current policy also reduces the incentive for both the employee and the hiring manager/supervisor to do effective onboarding and work together to address any challenges in the probationary period.” This opinion neglects to consider that the transferring employee wants to make the change and therefore has a stake in making the new situation work. The hiring manager’s incentive would likely try hard to fit the transferring employee into the working environment to avoid repeating the hiring process.

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Human Resource Directors and Employee Unions

Tomorrow afternoon, the Faculty Senate at UW-Madison will hear from Bob Lavigna, the institution's Human Resources Director. Lavigna will be discussing HR Design, a new plan I've covered several times recently on this blog. It's a controversial proposal, in part because it shifts the focus on setting compensation from internal equity towards external markets.  It also reduces some of the benefits held by classified staff, who are currently unionized, and for whom perks like substantial vacation time slightly dull the pain stemming from the terrible wages.

I was therefore intrigued when this morning I delved into my Inside Higher Ed backlog of reading and found the results of a brand new national survey of HR directors and their opinions about the future directions universities need to take.  The results help to at least partially set the broader stage on which HR Design is occurring.   (Partially: the response rate for this survey is 15% and with just 324 participants, 42 of whom were at public research universities, who knows if Madison is represented.)

Here are some key highlights related to HR Design:

• Concerns about salary equity are losing ground. Nearly 32% of HR Directors at public research universities said they are paying less attention to equity in faculty and staff salaries than they did five years ago, and just 17% are attending to those issues more often, despite the strong likelihood (given austerity practices) that inequities are growing.

• Almost all HR Directors take a dim view of unions. Close to 90% of HR Directors at public research universities contend that unions inhibit their ability to re-deploy people and define job tasks, discourage pay for performance, and inappropriately protect poor performing employees.   Less than 1/3 of such Directors acknowledge unions' demonstrable roles in securing better salaries and benefits and ensuring fair treatment of employees.

• Few HR Directors seem able to ground their assessments in data. Just 28.6% of HR Directors at public research universities report that they have good data on employee performance, productivity, and satisfaction, and only 21.4% say they use such data in campus planning and policy decisions.  (Sidenote: Oh. My. God.)

• And yet somehow, HR Directors are able to attribute low morale among employees to recent budget cuts. 74% of those at public research institutions agree that budget cuts did major damage to staff rationale, and 20-30% say their offices are unfairly blamed for cuts to employee benefits and services and even layoffs.  The frequency of these statements is twice as common at public research institutions as compared to elsewhere.

These will undoubtedly form a nice backdrop to tomorrow's discussion. I'm hoping Lavigna keeps his statement short and sweet, to allow plenty of time for questions. I'm told this hasn't been the case at recent campus events; for example at last week's Academic Staff Assembly meeting the members were not given responses to ASEC's previously issued comments.  But I'm sure tomorrow will be different-- faculty like to talk, at least as much as we like to listen.

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Revisiting Compensation Plans in Higher Education

Like many universities throughout the country, UW-Madison is undergoing a restructuring of its human resources policies, aiming to make them more cost-effective by stimulating higher productivity-- bottom-line thinking encouraged and facilitated by the Wisconsin Legislature.

Among the planned changes in the new HR Design plan, released last Friday, is a shift to use of "new compensation structures...with market data... gathered to inform compensation decisions. Pay adjustments will reflect a broad range of factors (e.g., market, equity, performance) within defined parameters, and will be based on objective performance evaluations...These decisions will have to be made through fair, objective and transparent performance evaluations. Supervisors will be provided with training on how to conduct effective and bias-free performance evaluations and how to ensure that the supervisors who report to them are doing the same with their staff. Deans and directors will be responsible for ensuring that compensation decisions are fair and merit-based."

Unfortunately, the scholarly literature  suggests that some elements of this approach may be problematic. Here are some examples:

• The application of market data is subject to misapplication. The HR Design Plan says, "For example, for positions that require unique or advanced skills, the university must be very responsive to external labor markets in order to recruit and retain talent" (p.24). While this is commonly accepted wisdom, research discussed in yesterday's New York Times challenges it. Specifically, the use of market data has been shown to needlessly inflate the compensation of "stars" who are said to be flight risks, despite significant doubt about their transferability. Even though the article  focused on CEOS, given that these are jobs with unique or advanced skills too, the lessons seem quite applicable to high-level university administrators, athletic coaches, and "star" faculty-- who would likely find it very difficult to simply move to operating in an entirely different academic setting, moving their labs and students, etc.  There are big costs to doing so, and we have seen the results, since those stars often return to Madison after a few years away, and others seek to do so-- too late, when we no longer have space or desire to employ them. 

• There is a strong risk that these models will prioritize the pay of employees in a way that maximizes institutional prestige, rather than institutional effectiveness.  This is a common problem in the non-profit sector, and the current plan doesn't identify explicit actions to avoid it. It's currently a well-known problem, contributing to a rankings race that costs Wisconsin taxpayers money and comes at the expense of our educational mission.

• The plan makes statements about "considering" internal equity but does not make explicit the rank order in which internal equity should be prioritized by departments.  Admittedly, this is a highly de-centralized campus, but that should not come at the expense of equitable human resources practices. In the meantime, evidence continues to emerge from top scholars in economics and business suggesting that job satisfaction for university employees is really affected by relative pay in their workplace rather than absolute levels of pay such as those that would be constructed by setting pay within an institution based on pay given outside the institution. 

A few additional thoughts on that last point...We saw the anxiety about faculty pay that forms some of the ground for these changes emerge and grow quite heated during the New Badger Partnership discussion last spring.  I blogged extensively about this,  raising questions about the use of extra-institutional peer comparisons in defining "low" pay,  rather than intra-institutional comparisons (in other words, am I underpaid because my colleagues at Penn State make more money, or because my colleague in the office next door makes more?)   I argued that while Madison faculty (and many staff) operate in a national and even international marketplace, there are selection mechanisms operating that mean that many of us place a lower priority on such distinctions compared to other people who choose to work at notoriously well-paid places.  In other words,  people on whom the future of the university rest knew when they were hired that Madison wasn't known for its high salaries, recognized the low cost-of-living in the area and the great benefits, and while they have little tolerance for being inequitably paid among people on campus (nor look kindly on salary compression), didn't rank pay relative to other institutions as a top priority.  (Admittedly, it is hard to test the merits of my claim, since I cannot locate any high-quality surveys of our university community which provide an array of responses to questions about compensation and achieve high response rates-- and it's safe to say that those who step forward with complaints are a selected bunch upon whom new policies should probably not be based.  So, if this is incorrect, get the data and let's examine it.)

The shift to new compensation structures is part and parcel of wider efforts seeking to bring corporate models to higher education.  They convey a set of neoclassical economic constructs, such as self-interest, scarcity, maximization, choice, efficiency, value, and competition, with which we are all too familiar.  The effects of such models can be observed in conflicts like the one that arose at UVA this summer, when an external, bottom-line focus and disrespect for internal collaborative processes led Rector Helen Dragas to make an extraordinarily ill-advised attempt to oust President Terry Sullivan.

To be completely fair,  many disagree with me regarding this claim of corporatization. The HR Design team produced a document that proclaims, "Misconception: UW-Madison is moving to a corporate model. Fact: UW-Madison will be adopting a personnel system that meets the needs of our educational mission and culture. Our university will implement a new personnel system tailored to the needs of our higher education environment. Implementation will include working with governance and other stakeholder groups to ensure that the new HR system makes sense for our mission, culture and environment. We will also continue to identify and apply best practices from other educational and public sector organizations. (This point is emphasized throughout the plan.)."

I don't doubt the sincerity of this statement at all. But the problem is that the "needs" assessment is marked against the demands of external (and internal) stakeholders that seek to promote a focus on efficiency above other values, and among whom some politically seek an austerity budget for public institutions that will create room for new business opportunities for profiteering institutions.  Moreover, it's getting harder and harder to find practices in the public sector that are unlike those used by the corporate sector, given the longstanding conversion of universities and their brethren to this model.  So, it will be very easy to say "our friends do it, and we don't want to fall behind," even though this may serve to justify a model that is effectively destroying those friends.

So what are the alternatives? Absent the availability of a list of already-considered alternatives and their pros and cons, such as what could have been offerred by the HR Design team, I will turn to the work of noted scholars like Stanford's Myra Strober, and University of Massachusetts-Amherst's Nancy Folbre.  My assessment of their work leads me to suggest that we would benefit from shifting to focusing explicitly on the following in a revised HR Design plan:

(1) Ensure that first and foremost the university offers all employees compensation consistent with the UW-Madison community's collective norms. To do this, we must explicitly agree on and state our norms and values. When did we last (or ever) do this?   UW-Madison prides itself on developing in its students a sense of civic commitment and responsibility, and avoiding hypocrisy requires that we exert the value of altruism to be inherent in how we treat each other--including when it comes to pay.  While the HR Design plan pays attention to ensuring we pay a living wage, I think we can all agree that that's really the bare minimum.  To ensure we hire people committed to UW-Madison and retain them for the long haul, we need to make explicit a set of institutional priorities placed on internal equity and long-term employee performance.   Focus on ensuring that all campus units promote a culture of fairness among employees, where equity concerns are addressed proactively rather than reactively (as they are now).

(2) Focus on rewarding the type of work that produces high-quality outcomes for our students. As an educational institution, we engage in work that is inherently process-based, and the outcomes of which can take a long time to emerge. We should be explicit about discouraging units from emphasizing short-term gains that are often illusory and can serve to too quick elevate a "rising" star who may lack institutional commitment or perform very little "non-market" work.   Much of what the best members of our community do is essentially volunteer work-- service above and beyond the call of duty-- and unless we explicitly commit ourselves to paying for that work, it goes unacknowledged and will inevitably decline.

(3) Distribute gains effectively.  If employees at UW-Madison want to be national leaders in stemming the rising tide of inequality, we should actively discourage the "Matthew effect" on campus. In other words, we should prevent a winner-take-all system and ensure that gains come to those who have not typically be rewarded.  (There was some language about this in the Critical Compensation Fund guidelines this spring-- that was a good start).  For example, we will gain much more from ensuring the continuity of strong programs in the humanities because they are being decimated elsewhere, and because emphasizing the importance of the humanities in the teaching of our students will help our students stand out not only as workers but as human beings.  Humanities faculty need adequate support staff just as much as science labs do, and we collectively benefit from recognizing that.  The plan needs to be very clear on this point, lest departments be less to be seemingly "rational" but practically ineffective decisions.

(4) Focus on the distribution of abundant resources rather the adaptation to scarcity. The HR Design could leverage this opportunity to become part of a larger effort rejecting the claims that the university must tighten its belt because of tough times-- it is not because of a lack of a tax base that these changes are occurring, but because of particular policy choices.  Scarcity is being created and advertised to us-- and we are buying it.  But the psychological effects of scarcity rhetoric undermine any additional compensation and have long-lasting effects.  We should encourage in our community a sense of selflessness, and write a plan that maximizes everyone's benefits under conditions where we are wealthy, not poor.  This will effectively de-emphasize internal competitiveness, which creates strife, and create more opportunities to achieve intrinsic satisfaction in one's work. In the last 5 years, I have felt my colleagues grow more tense and worried, feeling as it everything is a zero-sum game and we are under siege. That's remarkably destructive, and should be addressed.

In summary, I am grateful for the work of all on campus who contributed to the HR Design effort. I think they worked within parameters and expectations which are common to campuses across the United States.  But therein lies the problem-- we need to better engage a process of sifting and winnowing that is open to thinking from outside the box lest we  perpetrate on ourselves a system that has demonstrably diminished the flourishing of so many Americans.

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More on the Efforts to Marketize UW-Madison

A few months ago I wrote about the HR Design process at UW-Madison.  Some readers questioned the accuracy of my assertions.  We have new confirmatory information obtained via open records requests.  It seems the Huron Engagement has been expensive, indeed.   In the following memo, the Wisconsin University Union summarizes what we now know. It's a bit long, so I have underlined and bolded key points.


To: Interested campus employees
From: WUU
Date: June 20, 2012
RE: Memos from Huron Consulting Group

As you may know, Wisconsin University Union (WUU) has filed a series of open meeting and open requests to UW administration to gain access to information on the HR Design Project (the Project).  We initiated these requests because we believed that the effects of the Project will likely be far-reaching and long-term and that despite the administration’s attempt to project a gloss of participation and transparency to the process, it was fundamentally top-down and opaque.

When the administration finally complied with our request, we were disappointed, though not surprised, that most of the documents added little if anything to our knowledge base. For example, minutes of meetings described the topics under discussion but gave no account of the discussions themselves. The exception to this lack of transparency were memos from Huron Consulting Group (HCG) to the Project managers. These memos very briefly summarized the week’s events and posed concerns and questions on the future work of the Project.

For this reason, a month ago, we filed a new request for records specifying HCG memos to administration along with a request for their billings to the UW. After a month wait, we received the records this week.

The memos did not disclose a “smoking gun.” Instead, they confirmed much of what we know about the potential effects of the recommendations.  The following are excerpts of the HCG memos:

(5/3/2012) The work teams are proposing a “contemporary” but not radical approach to HR management at a research university. The model puts greater emphasis on performance and employee development and shifts the focus from internal equity to external competiveness.

The implied shifts for HR management implied (sic):
• Greater emphasis on data and analysis (over set rules)
• Greater reliance on the skills of managers/supervisors
• Ongoing development of central HR as a center of excellence

I (from the HCG staff member) don’t have a good sense of the project team’s appetite for this type/level of change. If this does turn out to be the direction you choose to go, substantial pieces of it will be phased in over time. Still, it represents a significant amount of change that will to be championed by OHR and supported through the application of potentially significant resources.


(5/10/12) Compensation, Performance Management and Workplace Flexibility all have suggestions related to boards or committees being involved in appeals of decisions that impact employees. Ongoing governance (small “g”) of HR functions and processes will be a topic that we need to address over the summer. This is an area where I expect that the campus community will want more specificity in the fall.

Understanding our resource requirements for the summer will evolve as our project plan evolves. At the same time, I would suggest that adding resources is an opportunity to start to build the long-term capabilities of OHR in areas such as compensation.

*****

These excerpts confirm a few of the central objections we have made in prior analyses:
• Salary equity will be abandoned in favor of labor market “competitiveness.”

• Compensation based on labor market analysis will require a substantial on-going investment to build capacity. It is difficult to estimate the cost for new HR staff members or more likely, consultants, to conduct wage and benefit analyses for hundreds of job titles.

• Supervisors and managers will have substantial new powers due to the major shift in compensation responsibility along with new discretionary authority in promotion, hiring, etc. This will require a major investment in training and, one would hope, oversight and supervision of the supervisors. What will be the safeguards against favoritism, discrimination and other adverse effects?

• HCG advises that, that because these new offices will be “substantial”, HR should build its new “empire” slowly and incrementally so as not to call attention to its long-term costs.

• Committees acknowledged that some form of dispute resolution methods will be necessary but have either not specified how this might occur or recommend that the dispute process be overseen by HR. The HCG seems to recognize that employees will likely want better answers.

Consultant Costs:
Billings to UW from HCG:
Nov. 2011: $32,751
Dec. 2011: $154,738
Jan. 2012: $61,714
Feb. 2012: $93,798
Mar. 2012: $89,976
Total:     $432,977

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The Continued Marketization of UW-Madison

Last year, I wrote extensively about efforts led by former Chancellor Biddy Martin and her administration, donors, and alumni to privatize (or at least semi-privatize) the University of Wisconsin-Madison.  That effort was partially successful, for while Martin and colleagues failed to separate Madison from the rest of the UW System, or gain authority over tuition setting, they did succeed in getting Madison the authority to redesign its human resources system.  This new "flexibility" was praised by many on campus, including staff, faculty, and students, who recognize that the current bureaucracy is not working, especially for those outside of administration.

So, this year the Human Resource Design Project has been advertised as a tremendous opportunity, hard won, and far better than the alternative -- the status quo.  Perhaps.  But few reforms are without consequence, and the recommendations recently offered by the working teams in HR Design suggest this case is no exception.  In fact, the potential long-term effects of this redesign process may result in an very different university culture, one that is far less progressive than Madison has historically been known for.  Instead, the recommendations will likely aggressively speed-up Madison's transformation (I'd say descent) into a market-driven institution focused first and foremost on serving its paying customers.

Some specifics of the recommendations have been discussed over at Sifting and Winnowing and so I direct you to read the details there.  For example, the recommendations include combining the currently unionized classified staff and academic staff into one.  As severals members of the HR working teams point out, this has significant implications for the protections held by unionized workers: "If the state legislature does not amend these statutes, the combining formerly classified staff–the custodians, the office secretaries, financial specialists–into the employee category academic staff will take away the few remaining collective bargaining rights that they have fought and bargained for about 50 years."  Both the classified staff and the academic staff object to this recommendation.

Another recommendation focuses on the distribution of employee pay based on labor market analyses. As members of the Wisconsin University Union point out, this can mean many things-- some resulting in even lower pay for UW-Madison workers.  "There is no standard labor market for any group or individual occupations (with the exception of building trades). There are often valid arguments to be made for or against choosing one group over another. However, choice of a particular labor market as the standard will frequently determine the result."  Crucially, the current recommendations say nothing about providing cost of living increases to all employees, nor is there any consideration of years of experience with good performance.

Furthermore, the proper implementation of these recommendations will likely grow the size of central administration -- not reduce it.  National studies indicate that growth in central administrations are the source of much of the increasing costs of college attendance, so we need to pay special attention here.  According to Joel Rogers, professor of Sociology, “Done properly, the task of specifying the real human capital requirements of hundreds of UW job titles; identifying jobs with the same requirements in external labor markets; collecting all relevant data on their compensation from private employers; and doing all this continuously enough to capture relevant changes, job titles, compensation practices, and labor market boundaries and participants is a massive amount of work."

Finally, despite promises to the contrary, these recommendations involve cuts to employee compensation.  Specifically, academic staff will see their vacation benefits reduced.  As ASEC has pointed out, "newly employed academic staff will lose nearly 52 hours of vacation/personal time under this proposal. Children attending MMSD have 16 days of vacation that do not coincide with the UW’s current holiday schedule, which means a single parent would have four days of vacation left (after caring for her/his child when local schools are not in session)."  And yet UW claims that employees will not move backwards under the new Design?

Now, to UW's credit, this has been a somewhat transparent process.  Many public forums have been held, and there are many ways to provide input.  The 11 working groups on this effort involved many people-- however, a closer look indicates that the vast majority (perhaps 2/3rds) are people currently in HR in the administration--in other words there were not many faculty or union-represented workers involved.  Furthermore, participation among those on the work groups has been reportedly hampered by meeting times occurring early in the morning (e.g. before childcare begins) and during work hours.

Moreover, there has also been a continuation of last spring's approach in communicating with campus members-- administrators tell us what's "important" and "smart" without providing hard facts about the evidence on why.  Where does this proposed structure of titles come from? Where is the data regarding the effects of this sort of market-driven approach versus alternatives?  There is very little data given anywhere to back up the contentions in the recommendations, despite the very expensive contributions made by the Huron Consulting firm, hired under Martin to assist with this work.  The rhetorical approach is led by Robert Lavigna, who speaks about the importance of ensuring that the new system can attract and retain "the best talent."  He utilizes the language of "flexibility", "efficiency," and "effective."  He promises a "greater connection between compensation and performance."  In other words he talks a lot like Biddy Martin, and others like her who are bringing business practices to education.

Thus, one key thing that the new HR Design highlights is that the neoliberal politics embodied in Biddy Martin were not hers alone, and that her efforts were indicative of a broader market-driven culture amongst those who surrounded and hired her, which continues to prevail in today's UW-Madison (and indeed globally).  These recommendations were issued, and are being systematically advanced, despite her departure.  That is something we all must pay close attention to, as these political maneuverings will likely continue to shape the next stages in Madison's development- especially the upcoming chancellor search.  Who will be in charge there? What "facts" will we be provided? What role will faculty, staff, and students play, relative to the roles played by WARF, donors, alumni, and administrators?

A thoughtful approach to considering the desirability of the marketization of Madison requires our entire community think about (1) What are the full set of alternative options under consideration? (2) What evidence is being presented about the likely intended and unintended consequences of each option? and (3) Who exactly stands to benefit, and in what ways, from each option?

Notably, these are not the kinds of questions Huron (our highly-paid consultant) is known for asking and answering. Instead, Huron emphasizes a one-directional model in which administration directs the activities of faculty and staff.  Laura Yaeger, VP at Huron, has said that "universities are getting a better understanding of what activities add value to students and stakeholders while  providing clearer guidelines for staff and faculty about which programs and activities should be supported."   Does that sound like shared governance to you?  Who are those stakeholders?

We are repeatedly being told that our backs are against the wall, and this is our only choice.  Don't listen to talk like that-- you are too smart.  This new Design is neoliberalism at its finest, justifying marketization as a form of self-defense, redefining all interactions within the educational institution as essentially business relationships. We, the faculty and staff and our traditional protections, are being identified as the obstacle to market-based efficiencies.  The ultimate goal is to make UW-Madison less dependent on us.  This gives private investors greater opportunities to profit from state expenditures, while influencing the form and content of education. And it makes business and university administrators the main partnership, redefining student-professor relations.

It is imperative that educators and students across UW-Madison begin to understand and draw attention to how funding priorities, public-private partnerships, tuition and fees, cost-benefit analysis, performance indicators, curriculum changes, and new technologies change the content of academic work and learning, and how they collectively arise from global efforts to discipline academic labor for capital. The changes to Madison's human resources system, and to its operations more broadly, are intimately linked to employment opportunities in Dane County and elsewhere, and to the kinds of education and services we deliver to the state.  If we are going to be market-driven in how we educate and serve Wisconsin, what we provide will be undoubtedly more unequally distributed.  Everyone should have something to say about that. As Lavigna has said "This system will affect everyone on this campus."  He's serious. You need to pay attention.

PLEASE: Send your feedback on HR Design to hrdesign@news.wisc.edu

You have read this article Biddy Martin / compensation / higher education / human resources / marketization / neoliberalism / UW Madison / UW System with the title compensation. You can bookmark this page URL http://apt3e.blogspot.com/2012/05/the-continued-marketization-of-uw.html. Thanks!