In the heart of the southeastern United States, a mid-size institution found itself grappling with a daunting $500,000 operating deficit. This financial challenge stemmed from a persistent decline in enrollments over several years coupled with a rise in tuition discounting. Delving deeper, it became evident that the decentralized approach to academic program delivery had led to a substantial number of courses being taught by full-time faculty beyond their regular loads. Upon closer examination, it was found that a sizable portion of this overload compensation was attributed to fewer than 40 faculty members, predominantly assigned to academic departments experiencing year-over-year enrollment declines. To exacerbate matters, over 25% of the full-time faculty held administrative reassignments, which often gave them additional compensation. Compounding the financial strain was the institution’s compensation practices, which extended financial recognition to faculty engaged in both teaching beyond their regular load and having administrative activities. This translated into an additional cost nearing $3.5 million―a staggering seven times more than the annual operating deficit and roughly equivalent to 15% of the base compensation for all faculty in that fiscal year. In response to this fiscal challenge, the academic leadership embarked on a collaborative journey with faculty members. Their collective effort aimed not only to streamline the proliferation of administrative overhead and overload compensation but also to address the annual deficit while reaffirming the institution’s commitment to its fundamental mission of teaching and learning.

Completing the Puzzle

The story I share to begin this section describes a successful academic cost approach with an emphasis on providing academic decision makers with the information they need to be good stewards of institutional resources. Before proceeding, though, I want to emphasize the importance of establishing the foundation called for in Section 10. To do this, I share one more example of how this effort pays off overall. Most institutions have a solid understanding of faculty effort and the financial resources available for instruction and academic support. Yet, this understanding is often isolated to academic departments and occasionally to the school or college. As such, anomalies, one-offs, and customizations are often local in nature and rarely part of the institutional conversation. A well-developed cost framework helps to integrate these anomalies into the institutional decision support tool that is critical for earning faculty buy-in. As the old adage goes, by failing to plan, you are preparing to fail.

Faculty Effort

Faculty effort norms and policies are often documented in the faculty handbook with effort-related metric expectations aligned with the academic calendar as defined by the institution. However, in many cases, the actual workload expectations for faculty are found in their annual contracts, which may vary from year to year. Additionally, workload expectations vary across academic disciplines and by faculty type (e.g., tenure-line or lecturer). Despite this variability and customized approach, there are two general approaches to measuring faculty effort at each institution, as described below. First, there is the concept of faculty effort that often considers teaching, research, and service as acceptable categories for describing the work faculty undertake. Occasionally, institutions have policies suggesting a fixed proportion of time for each of the categories. For example, leaders at a teaching-focused institution may ask their faculty to spend 60% of their time on teaching, 20% of their time on research, and 20% of their time on service. I would emphasize these proportions should be viewed as malleable as they may vary significantly across disciplines and academic units. Understanding how the institution considers this information is critical when assigning the direct costs of teaching, research, and service per the previous example. Second, there is normally a faculty effort policy identifying the number of courses a faculty member should teach during the contract year. Using the example above, a teaching-focused institution may ask faculty to teach a 3/3 load, which loosely means three courses in the fall and three in the spring. In practice, faculty may not teach a full load due to course reassignments, such as serving as academic department chair, with a stipend; applying for research grants; and providing support for accreditation. Careful attention should be paid to identifying the actual activities for each faculty member. Figure 9.1 shows what I have typically found when studying this issue at more than 40 colleges and universities. At many institutions, the teaching load as described above is often clearly understood and monitored at the academic department level. However, effort components such as research, service, and reassignments are not always understood, which makes it difficult to quantify and qualify cost and productivity in these key areas.

Figure 9.1 Faculty Effort

When considering adjuncts or contingent faculty without research and service requirements, I have found it effective to assign their compensation to the courses they teach rather than develop a unique methodology for each member. Finally, issues such as administrative staff teaching a course, sabbaticals, research funding, and others require a nuanced approach to ensure an acceptable allocation is implemented within the model.

Exercise for Provost, Senior Academic Administrators, Faculty and Staff Leaders

We often find that the quantifying of faculty effort and introducing of financial resource allocation methodologies presents a significant learning curve for both faculty and staff. In fact, this is the area where many academic cost stewardship initiatives become delayed or break down entirely. To address this, I suggest undertaking the following activities prior to the work being conducted so that faculty and staff have the opportunity to ask questions, address concerns, and reflect on the process.

1. Data Validation Workshops – Organize workshops in which faculty and staff members work together to review and validate the data being used in the new decision support system. This can include verifying faculty effort data, financial resources data, and the accuracy of data points retrieved from relevant information systems. These workshops help ensure that the data are accurate and reflective of the actual situation in different academic departments, and they create a cohort of expert faculty that colleagues can reach out to with questions or concerns.

2.  Policy Review and Update Sessions – Conduct sessions to review and update policies related to faculty effort and financial resource allocation. These sessions should involve faculty members, academic department chairs, and administrative staff. The goal is to clarify existing policies, identify areas of ambiguity, and update policies to reflect current practices and institutional goals. This helps in creating a more transparent and consistent approach across the institution.

The successful implementation of these strategies is crucial for enhancing the efficiency and transparency of faculty effort quantification and financial resource allocation in the institution. By proactively addressing the challenges through data validation workshops and policy review and update sessions, leadership can significantly reduce the likelihood of delays and breakdowns in this academic cost stewardship project. It is imperative these steps be taken to foster a collaborative and well-informed environment among faculty and staff. Therefore, it is essential for key stakeholders to actively engage in these activities, embracing the opportunity for dialogue, learning, and improvement. The collective commitment to these efforts ensures the institution is equipped to navigate the complexities of resource management in an ever-evolving higher education landscape.