The Relationship Between Responsibility Center Management, Faculty Composition, and Faculty Salaries

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Date
2020-06-19
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Virginia Tech
Abstract

In 2006–2007 ten public universities were utilizing responsibility center management (RCM), and that number increased to 24 in 2014–2015 (Jaquette, Kramer, and Curs, 2018), but little is known about the relationship between the implementation of RCM, faculty composition, and faculty compensation. Inequities in faculty composition and salaries exist based on gender and race/ethnicity. My study explored whether the implementation of RCM, an increasingly popular budget model in public higher education, was associated with further faculty salary and compositional inequities by gender and race/ethnicity. Deans, as heads of revenue centers under RCM, have increased budgetary power and decision-making responsibility. Organizational justice theory, specifically the tenets of distributive justice and procedural justice, grounded this study by connecting the implementation of RCM to the diffusion of decision-making throughout the organization and potential association with inequities in faculty composition and faculty compensation. This quantitative study examined the relationship of RCM with institutional average salary and numerical proportions of assistant professors on the tenure track at public, doctoral universities based on the 2015 Basic Carnegie Classification. I used difference-in-difference estimation to compare institutions that implemented RCM (treatment group) to institutions that did not (control group) to determine whether there were differences in salary and proportional trends for assistant professors by gender and by gender and race. In addition, I explored engineering in a specific set of analyses because it has been cited as a field that should especially benefit from an RCM budgeting approach. I compared the change in proportions of assistant professors of engineering by gender and by gender and race/ethnicity at universities within the sample. Finally, the annual salaries of a subset of assistant professors of engineering within the sample of doctoral institutions in the treatment and control groups in Ohio were compared. Across these different analyses, I did not find evidence that RCM implementation between FY2012 – FY2017 had a significant effect on average institutional salary generally or by gender or race/ethnicity for assistant professors broadly or within engineering, specifically. Lacking a comprehensive dataset with institutional and individual predictors of faculty compensation and composition, and as RCM models vary among institutions, these findings should be interpreted cautiously. As RCM did not appear to be associated with any changes in faculty composition or compensation practices, I did not find evidence that RCM implementation had a significant impact on the procedural justice (i.e., decision-making criteria and processes of deans or department heads) or distributive justice (i.e., salary amounts or proportions of who was hired by gender and race/ethnicity) of faculty composition or faculty compensation at public, doctoral universities.

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Keywords
Responsibility Center Management (RCM), faculty compensation, faculty salaries
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