October 7, 2003

By Carol Wood

Following a difficult three years laden with hefty state budget cuts and no state salary increases, the University’s Board of Visitors delivered some good news Saturday morning during its policy discussion on compensation and research issues at the University.

First came approval of $3.5 million which includes benefits for targeted faculty and classified staff salary adjustments, to be effective Nov. 25. These are in addition to the 2.25 percent increase already authorized by the state.

Second was approval to invest $60 million for research, including $40 million, in concept, for the first phase of a creative initiative meant to bolster the University’s status as a top-ranked research institution, and $20 million toward construction of MR-6, the planned medical research facility that already had been earmarked to receive state bond referendum funds of $24.2 million.

In addition to these immediate actions, the board threw its commitment, in concept, to a $125.8 million plan, which includes the $60 million mentioned above, to attract 10 leading research teams to the University by 2009 and to restore faculty compensation to nationally competitive levels by 2007. Long-range, permanent plans on both these initiatives will be presented to the board at its April meeting.

University President John T. Casteen III, who opened the two-hour policy discussion, said the session was the culmination of a series of conversations begun six months ago when board members asked him to enumerate key critical issues facing the University.

Research and compensation quickly moved to the top of the list, and last summer the board requested a focused analysis to ascertain what it would take to accomplish three goals:

• Restore faculty compensation to nationally competitive levels by the end of 2007;

• Preserve market-driven and performance-based compensation for classified staff;

• Establish a research initiative that would move the University into the top tier of research universities nationwide. They also asked that sources of institutional funds be identified during this analysis.

While it has been clear for some time that the University was falling behind in salary compensation, the state showed no signs of being able to shoulder its financial obligation to state employees. At the meeting, the board, as a group, expressed hope that the state would soon be able to resume its share of that obligation.

Leonard W. Sandridge, the University's executive vice president and chief operating officer, led much of Saturday’s discussion and gave a brief historical overview of the state’s failure to adequately fund faculty salaries. Despite a State Council of Higher Education for Virginia proposal in the late 1980s to bring faculty salaries at all of Virginia’s public colleges and universities to the 60th percentile of their peers, it has met that goal for the University only once in the past 12 years, he said.

In 2000-01, U.Va. salaries ranked in the 46th percentile among its SCHEV peer group, and in 2002-03, that ranking dropped to the 27th percentile.

Sandridge said that the University would seek to make strategic compensation decisions with both faculty and staff. "For instance," he said, "many other universities are targeting our strong, young faculty; we need to protect our investment in them."

Gordon F. Rainey Jr., the University’s rector, often has said over the past months that this board wants to send a strong message of confidence in University employees and the future of the institution’s academic mission. Saturday’s actions backed up the board’s words with financial resources and a firm commitment.

Unanimously approved were the following compensation plans to become effective in November:

• For faculty, both teaching and general, and graduate teaching assistants, a pool equal to 1.75 percent of base salaries was created to give targeted merit adjustments.

• For classified staff, a pool of $250,000 plus benefits was created to give strategic base salary adjustments. A third University-wide annual pool of $200,000 plus benefits was created for one-time bonuses and awards.

In 2000, the state modified its classified pay system, and in the process introduced a special rewards and recognition program. While the state has never funded that program, each vice presidential area has tried to keep it alive through funding at departmental levels. This is the first time University-wide resources have been available.

The faculty and staff increases are being funded this year from a combination of state reserves, local general funds, and revenues from several other University funds. Future raises will come from tuition increases.

There was unanimous board support for investment in the compensation and research initiatives, both seen as critical to enhancing the University’s national visibility and reputation as a top research institution.

University Provost Gene D. Block’s idea to attract 10 National Academy-level faculty teams to the University was cause for special enthusiasm.

"We as a board are fundamentally making a commitment to the faculty of the University and a commitment to elevating this University," said board member John O. Wynne. "Everyone needs to know that we’re on a path here. It may take more than four years, but if we do this, it will not just be about the 10 teams. They will become a magnet for bringing in many others. This plan has the possibility to elevate this University in a way only private universities are doing today."
There was again unanimous board agreement, this time on the fact that the University was about to embark on something bold.

However, Rainey and Casteen underscored the importance of institutional discipline and the following of carefully calculated guidelines – including evaluation and assessment tools – at every step of the way. "Our new strength will be found in funding programs of extraordinary accomplishments or programs of extraordinary promise," Casteen said. "We need to be clear that we will not be funding just any new idea."

Casteen later elaborated with what he considered some of the keys to success:

• A competitive funding process;

• First-rate faculty;

• Smart management of each team’s work;

• The creative "adaptation and invention" of space.

Rainey said he believes that the board actions on compensation and research will have a significant impact on faculty hiring and retention and will enhance the academic reputation of the University.

"In my view," he added, "this is what the board should be doing -- addressing important policy issues that affect the long-term view of where the institution is headed."