1. UNC School of Medicine Basic Science Faculty Compensation Plan Proposal: Linking Performance with Resources and Rewards Robert N. Golden, M.D. Vice Dean, UNC School of Medicine

2. “Linking Performance with Resources and Rewards” Why do we need a compensation plan for the SOM basic science faculty? Brief background re: the nature of academic medical centers/schools of medicine Goals for the plan Summary of the proposed plan Process Essential features Example

3. What are the missions of the UNC School of Medicine? Three essential missions: Clinical Care Teaching Research Woven into all missions: Service Ideally, these 3 missions are synergistic; however, there is a potential for competition among them for scarce resources

4. The School of Medicine (SOM) is one of a dozen schools that comprise UNC-CH In FY04 SOM represented: 33% of UNC-CH workforce Over 1300 faculty 3300 Permanent employees (including faculty) 2000 Temporary employees 42% of UNC-CH operating expenditures 53% of UNC-CH Sponsored Program Awards 56% of UNC-CH indirects earned Large educational and training programs: ~640 medical students ~320 AHS students ~500 graduate students >650 residents

5. SOM $642m operating expenditures 3,308 employees HCS $1.1b operating expenditures 9,000 employees UNC Hospitals $586m expenditures 5,100 employees (5,600 w/residents) Rex $327m expenditures 3,600 employees P&A $205m expenditures 300 staff employees AHEC $44.9m operating expenditures 18 employees Medical Air Est. $1.5m operating expenditures 13 employees SOM is also part of the UNC Health Care Enterprise a $1.8b entity w/ 12,363 employees* *$1.8b “double counts” P&A expenditures as “variations” of their financials are included in both SOM and HCS reports Medical Foundation 24 employees $1.82m Exp; $10.3 awards

8. Faculty# 766 Faculty# 925 Faculty# 1,076 Faculty# 1,372

9. Source: SOM Finance and Business Operations Office School of Medicine Faculty Salaries Analysis By Year Shift in Funding Source For Salaries

12. SOM is highly dependent on grant funds(> 43% of budget). What impact will the flattening of the NIH budget have? NIH Grant Support UNC School of Medicine 1970-present

13. Basic Science Faculty Compensation Plan: Goals To provide incentives and rewards for outstanding performance in teaching, research, and service To provide a greater measure of fiscal security for each department To create a “meritocracy” via a reward system that is similar in philosophy and approach to the current Clinical Faculty Compensation Plan

14. Basic Science Faculty Compensation Plan: Process Intention to develop such a plan was announced at a SOM Faculty Meeting Ad Hoc committee formed First draft presented at Dean’s Advisory Committee Revised drafts presented at several “town meetings”, department chair meetings, and a SOM Faculty Meeting, and several department meetings. Input also sought from the Provost’s Office and the President’s Office.

15. Essential Features of the Plan Applies to tenure-track faculty in basic science departments* (approximately 140 current faculty) Current tenured faculty can elect to participate (or not) in the plan at its inception All new faculty and non-tenured tenure track faculty will be automatically enrolled Current faculty who initially opt out can enroll later only with the approval of their chair Several procedures will be in place to review any grievances or complaints

16. Essential Features of the Plan Salary consists of two components: A. Academic Base Salary (with a “floor” set by rank) B. Variable Component For existing faculty, their current salary will become their academic base salary, unless otherwise negotiated with the chair. For new faculty, the academic base will be determined at the time of recruitment.

17. Essential Features of the Plan The aggregate academic base salaries for each department can never increase more than the increase in state funds for a given year. Each department will develop specific details for their compensation plan, which will be shared with the faculty and on file in the Dean’s Office. Plans will be reviewed at least every two years. Individual variable components can be adjusted up or down each year, based on productivity and achievement. The total salary for a faculty member cannot be reduced by more than 15% in any given year.

18. EXAMPLE: (DEPARTMENT GOAL = 50% GRANT SUPPORT) FACULTY ACADEMIC BASE SALARY $100K GRANT SUPPORT (40% of 100K)$ 40K DEPARTMENTAL SUPPORT (60% of 100K)$ 60K GRANT SUPPORT INCREASES TO 60% : VARIABLE COMPONENT: $ 10K TOTAL COMPENSATION:$110K GRANT SUPPORT (60% of $110K)$ 66K DEPARTMENTAL SUPPORT (40% OF $110K)$ 44K DEPARTMENTAL FUNDS “OFF LOAD”$ 16K

19. “ A good plan, well implemented, is better than a great plan that is poorly implemented.”