At CSU, The Goal is to Reward Outstanding Service

By Sam Strafaci

The California State University is the nation's largest system of senior higher education with 336,800 students and 37,000 employees. It receives about 70 percent of its budget from the state's general fund. Because it is a state institution, the CSU is committed to spending state funds in the best interest of California residents.

To that end, the CSU has instituted in its collective bargaining agreements a "Performance Pay Program" in which employees are rewarded on the basis of individual, demonstrated outstanding performance. First introduced in 1995-96, the new program now is a part of all employee contracts. Performance pay is not the only method of employee salary increases. Faculty and staff still receive general, across-the-board increases, as well as service-based increases.

Of about 18,000 faculty, 2,300 benefitted from a $7 million pool for performance-based raises in 1996-97. In the first year of the program, 1995-96, there were 765 raises from a pool of only $900,000. These salary boosts are in addition to regular cost-of-living increases.

The CSU program is intended to create the incentive for future outstanding performance, which is in the best interest of California taxpayers. The University of California and other institutions of higher education have had such programs for many years.

Performance pay incentives are no less appropriate in public institutions such as the CSU that are accountable to the state's taxpayers than they are in private institutions that are accountable to shareholders and other investors.

The CSU Performance Pay Program, which may resemble some private sector incentive compensation programs, is nonetheless very much like programs in other higher education institutions. Employee accountability and productivity programs lend themselves particularly well to institutions of higher education, for example, because the overwhelming majority of colleges and universities confer tenure to their faculty. In such institutions, faculty who have attained tenure as full professors at the top step of their salary schedule have no financial incentive to exceed minimum performance expectations. Approximately 50 percent, or 5,000, of the CSU's full-time faculty are in this category.

The evaluation of performance is, to some extent, subjective in nature. While some employees may not desire that their compensation be linked to performance, there is little doubt that all employees do not perform at an equally meritorious level, and that some people's performance in any given year is truly outstanding in the eyes of any objective evaluator.

The review and evaluation of faculty performance - by fellow faculty members - has been a way of life in the CSU for many years. If faculty performance were impossible to measure with some minimum standard of objectivity, then faculty members would not be capable of making recommendations regarding the award of promotion, reappointment, or tenure for their colleagues - a process that is well-settled in the academy. Faculty members also make recommendations regarding the granting of sabbatical, difference in pay, and other professional leaves of absence.

The CSU/California Faculty Association program allows for each campus Academic Senate to initially formulate the awards criteria and to recommend to the president both the criteria and procedures in making awards. In addition, the collective bargaining agreement mandates that there must be a review of all applicants/nominees by at least one committee of faculty members, and that at least half of the recipients must have received a positive recommendation by that committee. As such, there is extensive faculty input into the program's establishment at both the bargaining table and the campus, as well as subsequent faculty participation in the actual selection of recipients.

While the Performance Pay Program still is relatively new within the CSU and is being refined, it is successful in that employees who truly are outstanding are being rewarded and recognized. That was our goal when we began the program, and it will continue to be our goal.

Faculty Resistance: System is Repugnant Last September, the Department of Government faculty at CSU Sacramento adopted a policy of non-compliance with the program, which Department Chair Jean Torcom said "is repugnant on a number of grounds beyond the obvious destruction of collegial relations through invidious distinction. It makes the faulty and insulting assumption of a connection between good intellectual work and financial incentive. "It opens the door to shoddy and biased definitions of 'productivity' in the future. And it seeks to apply inappropriate methods and models of corporate industry on the university, thus diminishing a real pluralism of institutions and methods in the society." - Letter of September 19, 1996 from Chair Jean Torcom to CSU Sacramento President Donald R. Gerth.

CSU Trustees Support Performance Pay William Hauck, a member of the CSU Board of Trustees who is in line to serve as chairman of the board next year, said, "It is critical that we recognize outstanding performance." He said the program will continue and the board will work with the faculty union to be sure it is equitably implemented. "We are totally committed to making faculty pay-for-performance work. There is recognition that you can't do just enough to get by and be paid the same as the person down the hall who is doing extraordinary work," Mr. Hauck said. - Comments by Mr. Hauck to Cal-Tax on April 1, 1997.