Should vice-chancellors’ pay be reduced if academics go on strike?

It is unsurprising that UK academics have been periodically striking since long before the ambulance drivers, doctors, nurses, teachers and others joined them on the picket line. Having had their intrinsic motivation, based on autonomy and personal growth, stripped away, they have begun to focus on extrinsic motivations, such as pay and pensions.

It is well known that satisfaction with pay is all about comparatives and not absolutes; that is, what matters is not how much you receive but how much you receive relative to your comparison group. The question is, who exactly is in that group? Should dons compare themselves with academic peers, people they were undergraduates with or their bosses? That is a moot point, but the fact is that dons look at media revelations that around a dozen vice-chancellors receive more than £400,000 annually, and they scream at the unfairness.

The academic literature on perceptions of wage fairness indicates that nearly everyone believes that the differentials between highest and lowest earners are too high. People are pretty well informed about the pay associated with different types of professions, but if they are asked to devise pay rates from first principles, there are some surprises. Many believe that lucrative jobs, such as TV newsreading, should be paid well below the national average, while some lower-paid professionals, especially nurses, should be paid as much as judges. What, one wonders, do the public think university teachers and leaders are worth – as opposed to, say, those in the school sector, who earn rather less?

In determining pay, there are both internal and external comparators. Most vice-chancellors love the latter but not the former. The latest data suggests that the median vice-chancellor receives about seven and a half times the median pay of all other employees in their university. But while there have been strident calls for the top salary in any organisation to never be more than five to 10 times that of the bottom job, university leaders are eager to point out that corporate CEOs running businesses with comparable turnovers are paid “much more” than them.

They also observe that the world is now one market and if you are not prepared to pay international market rates, there will be a mass exodus of talent to other countries. Note that this form of social comparison is performed using (very) rich and unequal countries, such as the US and Abu Dhabi, as the yardstick rather than, say, the more egalitarian Nordics, who won’t stand for conspicuous greed (in my current country of academic employment, Norway, everybody’s tax returns are online).

A colleague argues that the “scarcity and value of labour” argument for high vice-chancellors’ pay is extremely dubious because there are surely myriad “tired academics who want to escape publication pressure for the sake of £500K stable payment for the burden of wearing Harry-Potter-like costumes at work”. Nor, unlike corporate CEOs, do university leaders need to be bribed to ensure that the temptation to steal does not bring their personal motives into conflict with shareholders’. 

So, how is vice-chancellors’ pay determined? It certainly does not seem very clearly related to university prestige, size, complexity, budget or student numbers. The leaders of some smallish recently upgraded universities are paid more than those of some well-established Russell Group universities.

Perhaps pay levels relate more closely to what vice-chancellors actually achieve. But anyone interested in performance management knows how difficult it is to measure performance. You can choose some metric – money, quality, quantity, customer feedback – but there are three problems. The first is to devise measures that don’t perversely incentivise bad behaviours (think of how bus drivers ignore waiting passengers because they are often measured by on-time performance). The second is to weigh the contribution of others (teams). And the third is to take into account the macro-economic forces beyond the leader’s control.

Linking pay to surplus or some other financial measure can have serious and sudden unfortunate consequences as clever vice-chancellors sell properties, re-engineer (sack) middle management and hold down everyone’s pay but their own to make the financials look good in the short term, only to precipitate a later crisis.

So why not assess university leaders on the basis of the proportion of their dons on strike over the past 12 months, voluntary turnover of top staff or even aspects of press coverage? The potential to create incentives that undermine the university’s longer-term finances is evident, but aren’t these at least more immediate and meaningful statistics than, say, position in yet another ranking of universities?

We all want pay to be equitable, transparent, simply determined and clearly linked to outcome measures, but achieving that is never going to be easy. Even if we do, university leaders, as the highest-paid employees and everybody’s boss, are always going to be the focus of academics’ anger when they feel they are getting a rough deal. But perhaps you could argue that when you earn the big bucks, you have to be able to deal with the abuse that inevitably comes with it.

Adrian Furnham is professor in the department of leadership and organisational behaviour at the Norwegian Business School in Oslo, with whose president’s remuneration he is happy.