Market-Based Faculty Pay Increases

Calculating pay increases using the market median of master’s-degreed faculty allows community colleges to stay competitive with peers and align with compensation goals.

For colleges that have adopted market-based pay, faculty pay increases should be calculated on the market median average salary rather than the midpoint of the faculty pay scale. Pay increases for faculty holding other degree levels can then be calculated based on the percentage difference from the master’s schedule.

While the midpoint is often used to calculate a pay increase for non-faculty jobs on a pay range, most faculty pay scales are aligned by years of experience and do not have traditional midpoints. Some colleges pick a year of experience or designate the point halfway between the minimum and maximum to calculate faculty raises. However, neither of these is the midpoint of faculty pay, and neither has any connection to market value. Other colleges may calculate pay increases on individual pay. While this method is common in the private industry, it serves to widen pay differences between educators, with less experienced faculty receiving smaller total dollar amount increases. Colleges adopting this method over several years may fall below market for starting pay rates.

In a market-based pay structure, the midpoint represents the market value for jobs in the pay grade. The same rationale can be used for calculating the amount of the increase for faculty by applying the general pay increase percentage to the market median average teacher salary. To determine the market average salary for faculty, data can be retrieved from TASB HRDataSource™ for your market peer group (member login required).

To access the data, log into HRDataSource. Select Salary and FTE Reports, then select Community College Faculty Pay. Set the parameters, then run the report. Use the market median for the average salary found in the summary table of the report. For example, if the board wants to give a 3 percent increase, multiply the market average salary by 3 percent to get the general pay increase (GPI).

The new schedule is built by adding this amount to the current salary amounts for all experience levels and increasing the corresponding experience levels by one. For example, adding a pay increase to the current year 1 salary generates the next year 2 salary.