Salary comparisons: New methods for correcting old fallacies

Institutions of higher education place high priority on ensuring that their faculties are adequately paid. Since gauging the adequacy of compensation is a problem of relative measure, this assessment is usually performed by comparing university-level average salaries for a group of peer institutions. Often the potential distortions caused by differences in the rank mix of the faculty are forestalled by comparing average salaries for each of the four ranks. However, few if any institutions take similar steps to prevent the skewing of averages owing to differences in cost of living, differences in distribution of faculty in academic year and twelve-month appointments, and differences in the configuration of the faculty over disciplines. This paper shows that salary comparisons that do not compensate for these variation in staff mix are seriously flawed. A recommended methodology is demonstrated.