REMUNERATION OF ACADEMIC STAFF AT SOUTH AFRICAN UNIVERSITIES: A summary report of the HESA Statistical Study of Academic Remuneration

Transcription

1 REMUNERATION OF ACADEMIC STAFF AT SOUTH AFRICAN UNIVERSITIES: A summary report of the HESA Statistical Study of Academic Remuneration November

2 FOREWORD In the face of ageing academics at most South African universities, as well as the transformation of the academic profession in order to make it more representative of the South African population, it is important to attract the best qualified young people from all population groups in significant numbers into the Academy. Without competitive remuneration for academics, especially at the lower echelons of the profession, many promising potential academics, as well as current academic staff, will be lured away to well paying positions in the public sector, as well as in the private sector What is the current situation regarding the remuneration of academic staff at South African universities? Is the remuneration of academic staff market related when compared with the remuneration of public sector staff and private sector staff? Which demographic and academic factors discriminate between the different levels of remuneration of academics in South Africa? These types of questions are important and should be tackled head-on. The Funding Strategy Group (FSG) of HESA proposed to the HESA Board that a study on the remuneration of academic staff should be commissioned. This proposal was accepted by the HESA Board in July The Executive Office of HESA appointed a Steering Committee to oversee the study 1 : At its first meeting on 26 September 2012 the Steering Committee agreed on the following purpose of the study, namely to produce a report for the FSG and ultimately for the Board of HESA on the remuneration and remuneration trends of academic staff at individual South African universities, as well as for the HE sector as a whole. One of the important aims of the study was also to compare the remuneration of academic staff with the remuneration of comparable staff in the public sector and private sector. Dr S Badat Chairperson: Funding Strategy Group of HESA until 31 December 2013, as well as convenor of Steering Committee of HESA remuneration study 1 Dr Saleem Badat (Convenor of the Steering Committee), Prof Enrico Uliana (UCT), Mr Hennie Kruger (UJ), Ms Amanda Glaeser (UWC), Dr Kgomotso Kasonkola (WITS), Mr T J Manenzhe (UNIVEN), Mr Craig Lyall-Watson (Consultant), Dr Gert Steyn (Researcher), Ms Jana van Wyk (HESA Executive Office)

3 SECTION 1: GLOSSARY OF TERMS...5 SECTION 2: BACKGROUND TO STUDY...6 Introduction... 6 Purpose of the study... 6 Aims of the study... 6 Sources of remuneration data... 7 SECTION 3: PREVIOUS STUDIES ON THE REMUNERATION OF ACADEMIC STAFF AT HIGHER EDUCATION INSTITUTIONS...8 SECTION 4: CRITERIA FOR AND APPROACH OF THE ANALYSIS...9 Equating the HE academic positions with positions in the public sector and private sector... 9 Definition of total remuneration... 9 Staff included in the analysis... 9 Measures of location used in the remuneration analysis... 9 SECTION 5: ACADEMIC STAFF REMUNERATION DATA Universities included in the study Profile of the academic staff within the study data set REMUNERATION INFORMATION BY INSTITUTION Monthly and annual remuneration of academic staff for Using a standard model to compare average remuneration between insitutions Comparing HEIs academics staff remuneration by means of indices in Percentile plots of remuneration of academic staff by institution in Histograms of remuneration of academic staff by institution in The average annual growth rate of monthly remuneration of academic staff for the period Basic cash/ salary of academic staff in as percentage of total remuneration Percentage breakdown of remuneration of academic staff according to type of payment STATISTICAL ANALYSIS OF THE INFLUENCE OF THE EXPLANATORY VARIABLES IN THE STUDY OF THE TOTAL REMUNERATION OF ACADEMIC STAFF IN ANALYSIS OF REMUNERATION ACCORDING TO ACADEMIC RANK / LEVEL FOR THE PERIOD Remuneration breakdown by gender and population group for each academic rank Average remuneration of academic staff in 2012 according to highest qualification Average remuneration of academic staff in 2012 according to CESM category Remuneration-age scatterplots and profiles of academic staff in Remuneration-age profiles in 2012 according to gender Comparison of remuneration of academic staff in 2012 according to type of HE institution SECTION 6: ANALYSIS OF PUBLIC SECTOR REMUNERATION DATA The average annual growth rate in annual remuneration of public sector staff in 2010 and The annual remuneration of public sector staff in 2012 according to salary level Average annual remuneration of public sector staff in 2012 according to population group and gender Average annual remuneration of public sector staff in 2012 according to occupational category Summary points to note: SECTION 7: ANALYSES OF PRIVATE SECTOR STAFF REMUNERATION DATA Summary points to note: SECTION 8: COMPARISON OF THE ANNUAL REMUNERATION OF ACADEMIC STAFF IN HE SECTOR WITH 3

4 THAT OF COMPARABLE STAFF IN THE PUBLIC AND PRIVATE SECTORS A COMPARISON BETWEEN THE MEASURES OF LOCATION OF THE ANNUAL REMUNERATION OF ACADEMIC STAFF IN SOUTH AFRICA AND COMPARABLE STAFF IN THE SOUTH AFRICAN PUBLIC AND PRIVATE SECTORS FOR Professor: Rank 1/Salary level 13/Paterson grade D3: Associate Professor: Rank 2/Salary level 12/Paterson grade D2: Senior Lecturer: Rank 3/Salary level 11/Paterson grade D1/D5: Lecturer: Rank 4/Salary level 10/Paterson grade C4: Junior Lecturer: Rank 5/Salary level Paterson grade C3: COMPARISON OF THE AVERAGE ANNUAL GROWTH RATE IN THE ANNUAL REMUNERATION OF IN THE ACADEMIC SECTOR VS THE PUBLIC AND PRIVATE SECTORS ADDENDUM TO SECTION COMPARISON OF THE TOTAL PACKAGE WHICH INCLUDES THE GUARANTEED PACKAGE AND NON-GUARANTEED PERFORMANCE BONUSES FOR THE ACADEMIC AND PRIVATE SECTORS SECTION 9: SUMMARY OF ADDITIONAL INFORMATION REQUESTED FROM HIGHER EDUCATION INSTITUTIONS A COMPARISON OF THE REMUNERATION OF ACADEMIC STAFF WITH THE REMUNERATION OF THE VICE-CHANCELLOR OF EACH UNIVERSITY ACCORDING TO INSTITUTION AND YEAR INSTITUTIONAL POLICIES ON THE REMUNERATION OF ACADEMIC STAFF SUMMARY OF INFORMATION SUBMITTED BY HE INSTITUTIONS REGARDING THE RETENTION OF MASTER AND DOCTORAL GRADUATES AS ACADEMIC STAFF MEMBERS Summary observations: SUMMARY OF INFORMATION SUBMITTED BY HE INSTITUTIONS ON THE INVOLVEMENT OF ORGANISED LABOUR ORGANISATIONS IN THE DETERMINATION OF THE REMUNERATION OF ACADEMIC STAFF Summary observations SECTION 10: RECOMMENDATIONS PROPOSALS ON THE REMUNERATION OF ACADEMIC STAFF ADDRESSED TO UNIVERSITIES, HESA AND THE GOVERNMENT, RECOGNISING THE IMPORTANT PRINCIPLE OF INSTITUTIONAL AUTONOMY APPENDIX Table 3.1 Job grades for three job evaluation systems Table 6.4 Annual average remuneration of public sector staff according to occupational category 54 Table 9.3 Remuneration policies APPENDIX Summary of information regarding the retention of master and doctoral graduates as academic staff members

5 SECTION 1: GLOSSARY OF TERMS ACU Association of Commonwealth Universities CATE Colleges of Advance Technical Education CES Committee of Education Structures CPI Consumer Price Index CS College/school CUP Committee of University Principals DHET Department of Higher Education and Training DPSA Department of Public Service and Administration FTE Full-time equivalent FSG Funding Strategy Group GDP Gross domestic product HATs Historically Advantaged Technikons HAUs - Historically Advantaged Universities HDI Human development index HDTs - Historically Disadvantaged Technikons HDUs Historically Disadvantaged Universities HEMIS Higher Education Management Information System HSRC Human Science Research Council PERSAL-Personnel Salary system PPP Purchasing-power parity RECES Research Committee of Education Structures SAUVCA South African Universities Vice-Chancellors Association SAPSE South African Post-Secondary Education Average (arithmetic mean) of remuneration: Sum of remuneration amounts of all academic staff members divided by the number of academic staff members. Quartiles Q1, Q2 (also known as the median (Me)) and Q3 of remuneration: These 3 measures divide the remuneration array (i. e. the ordering of all the values of the remuneration of academic staff members from lowest remuneration value to highest remuneration value) into four parts of equal size, with the characteristics that 25 % of the remuneration values are lower as Q1, 50% of all remuneration values are lower than Me, and 75% of all remuneration values are lower than Q3. 5

6 SECTION 2: BACKGROUND TO STUDY Introduction In the face of ageing academics at most South African universities, as well as the transformation of the academic profession in order to make it more representative of the South African population, it is important to attract the best qualified young people from all population groups in significant numbers into the Academy. Without competitive remuneration for academics (more formally known in HEMIS as instruction/research staff), especially at the lower echelons of the profession, many promising potential academics, as well as current academic staff, will be lured away to well paying positions in the public sector, as well as in the private sector. There is also an ongoing brain drain in our country. Some of the best researchers at universities in South Africa annually took up prestigious academic positions in other countries, sometimes as a result of better remuneration associated with these positions. On the other hand, as a result of the weak rand it is difficult to attract international academic staff to South African HE institutions. Increasingly, universities are being recognised as leaders and agents in the knowledge economy. They, therefore, need to develop the necessary numbers of graduate citizens who can participate adequately in economic and social development and knowledge economies. The challenge South Africa faces is to develop and maintain at each university the necessary human resources, especially academics, necessary to meet these societal demands. What is the current situation regarding the remuneration of academic staff at South African universities? Is the remuneration of academic staff market related when compared with the remuneration of public sector staff and private sector staff? Which demographic and academic factors discriminate between the different levels of remuneration of academics in South Africa? These types of questions are important and should be tackled head-on. Purpose of the study The purpose of the study is to produce a report for the FSG and ultimately for the Board of HESA on the remuneration and remuneration trends of academic staff at individual South African universities, as well as for the HE sector as a whole. Aims of the study The aims of the study are: i. To establish the remuneration of full-time permanent academic staff and staff with fixed contracts of one year or more and trends in this regard over the past 10 years. ii. To analyse the remuneration of academic staff in relation to rank/position, age, highest qualification, field of study (e.g. CESM category), population group, gender and post grading (e. g. Peromnes grade). iii. To compare the remuneration of academic staff with the remuneration of comparable staff in both the public sector and the private sector. iv. To compare the remuneration of academic staff relative to that of the remuneration of the Vice- Chancellor of each university. v. To establish the retention rate of masters/doctoral graduates as academic staff members. vi. To advance proposals on the remuneration of academic staff addressed to universities, HESA and 6

7 the government, recognising the important principle of institutional autonomy. It was later decided to also determine the role which organised labour plays in determining the remuneration of academic staff at South African universities. Furthermore, institutions would also be requested to provide copies of their remuneration policies for academic staff. Sources of remuneration data The sources of the remuneration data is described in detail in the full report. 7

8 SECTION 3: PREVIOUS STUDIES ON THE REMUNERATION OF ACADEMIC STAFF AT HIGHER EDUCATION INSTITUTIONS Many studies on the remuneration of academic staff in South Africa and internationally have been conducted over the past century. Some of the most important of the studies that relate directly to the current HESA study are summarised in the full report. A summary of the main points emerging from previous academic remuneration studies follows below. i. During the period before 1980 the salaries of academic staff at South African universities and technikons were regulated by government in a relative stringent way. During the period some regulation by government was in place by means of a theoretical ceiling value for the remuneration per FTE academic staff member, namely the cost units C1 in the SAPSE subsidy formulas for funding universities and technikons. Since 2004, when the existing funding framework for HE was introduced, government ceased to regulate the remuneration of academic staff. ii. In 1981 a methodology was developed by government to compare educators salaries with the salaries of employees in comparable positions in the public and private sectors. This entailed, inter alia, the compilation of median salary-age profiles for College or School educators, university educators, technikon educators, as well as for sets of comparable employees in respectively the public sector and private sector. During the period this methodology was used by the Committee of Education Structures (CES) and the Research Committee of Education Structures (RECES), in order to advise government from year to year on the adjustment of the salaries of the family of educators. iii. An approximate equity between the salaries of professors and directors of professional divisions in the public service was established in 1951 by the Holloway Commission. This was confirmed by government in This point of departure was also used by the CES and RECES investigations during This equity is at present still (tacitly) accepted as an important calibration point to obtain a broader perspective on the remuneration of academic staff. iv. Regular Associate of Commonwealth (ACU) studies since 2001, as well as the Boston College study of 2008, showed that the average salaries of South African academics compare favourably with their counterparts in other countries. Since the average salaries for South African academics used in these international studies, were based on non-representative samples of South African HE institutions, the relevance of the conclusions concerning South Africa in these studies could be questioned. 8

9 SECTION 4: CRITERIA FOR AND APPROACH OF THE ANALYSIS Equating the HE academic positions with positions in the public sector and private sector In order to compare the total remuneration ( Cost to Company ) of permanent full-time academic staff, public sector staff and private sector staff, it is necessary to equate the different academic ranks/positions with similar positions in respectively the public and private sector. The two most used grading systems, both measuring the inherent complexity of a specific position or remuneration level, are the Paterson system and the Peromnes system. Table 3.1 in Appendix 1 provided by the Department of Public Service and Administration (DPSA), indicates their view on the approximate relationships between the two grading systems and the public service s so-called salary levels A comprehensive discussion is detailed in section 3 in the full report. Table 3.2 shows the scheme used in this study to compare the total remuneration of permanent full-time academic staff in the different academic ranks with their counterparts in the public and private sectors. TABLE 3.2: RELATIONSHIPS BETWEEN ACADEMIC RANKS, PUBLIC SECTOR SALARY LEVELS AND PRIVATE SECTOR GRADINGS Peromnes grades Paterson grades HE sector academic ranks Public sector salary levels Private sector grades 5 D3 (D4) Professor, Director (UoT) 13 (Director) D3 6 D2 Ass. prof, Ass. director (UoT) 12 (Deputy director) D2 7 D1/C5 Senior lecturer 11 (Deputy director) D1/C5 8 C4 Lecturer 10 (Assistant director) C4 9 C3 Junior lecturer 9 (Assistant director) C3 Definition of total remuneration The calculation of the annual (or monthly) total remuneration, sometimes also referred to as total cost to company, of a permanent full-time academic staff member, in the case of universities, or a comparable permanent full-time employee, in the case of the public sector or private sector, is the following: Total remuneration (in R) = Basic/cash salary (in R) + Rand value of all allowances received. Many of the allowances come in the form of the employer s contributions to e.g. a pension/provident fund, a medical aid fund or a group life insurance policy. Other allowances are typically based on the post or rank of the staff member, e. g. a car, telephone or entertainment allowances. Some further allowances are related to the work performance of or the specific skills of the staff member, e. g. (annual) bonus, incentive bonus or scarcity allowance. Payments or refunds for e. g. subsistence and travel, fuel reimbursements are not defined as allowances which contributes to total remuneration. Other benefits e.g. sabbatical leave have not been included as remuneration. Staff included in the analysis Data used for analyses in this report refers to data of staff members with permanent full-time employment. Full-time staff with a fixed contract appointment of at least one year will be considered as permanent staff for the term of the fixed contract. Measures of location used in the remuneration analysis Four well-known statistical measures of locality have been used to portray the remuneration information. These statistical measures are the first quartile (Q1), the median (Me), the third quartile (Q3) and the average 2. 2 definitions of these measures are included in the glossary 9

10 SECTION 5: ACADEMIC STAFF REMUNERATION DATA Universities included in the study The analysis has been conducted for the 22 (out of 23) Higher Education institutions (the HE sector) that submitted their information by the deadline date, and includes the following: Cape Peninsula University of Technology Central University of Technology Durban University of Technology Mangosuthu University of Technology Nelson Mandela Metropolitan University North West University Rhodes University Stellenbosch University Tshwane University of Technology University of Cape Town University of the Free State University of Fort Hare University of Johannesburg University of Kwazulu-Natal University of Limpopo University of Pretoria University of South Africa University of Venda University of the Western Cape Vaal University of Technology Witwatersrand University University of Zululand Profile of the academic staff within the study data set A breakdown of the profile of the academic staff for which data was obtained is given below. The HE sector s data set consisted of 44.5% females and 55.5% males. As far as population group is the percentage breakdown is: African 27.3%, Coloured 6.7%, Indian 8.1%, Whites 55.3% and staff that did not indicate their population group - 2.6% Graph 5.1 below gives a breakdown of the academic staff in terms of gender and population group. It excludes the unknown category in the population group. 10

11 Graph 5.1 Graph 5.2 gives a breakdown of the academic staff in terms of academic level and gender. Graph 5.2 G Graph 5.3 gives a breakdown of the academic staff in terms of academic level and population group. Graph

12 Remuneration information by institution Monthly and annual remuneration of academic staff for Table 5.1 shows these measures for the 22 HEIs, as well as for the HE sector, for the years Graph 5.4 gives the average annual remuneration according to institutions 3. {Comment: the inclusion of remuneration data of clinical medical staff, these salaries being significantly higher than average Professorial salaries, will increase the means and Q3 values for those institutions] Graph 5.4 The following trends have been drawn from Table 5.1 below: i. Since (apart from Institution 21), the averages exceed the medians, the distributions were positively skewed 4. This means that there are a limited number of academics with relatively or even extremely high monthly remunerations. This is a well-known phenomenon world-wide for most income (remuneration) distributions. The nature of the highly competitive academic environment at HE institutions enhances the total remuneration of the best performing academic staff members by means of inter alia quick promotions, the payment of large incentive bonuses or scarcity allowances. ii. The median values in the last row of the table show that in 2008 fifty per cent of the academic staff remuneration was more than R This amount increased in 2012 to R The remuneration of 25% of academics was in 2012 lower than R34 187, while the remuneration of 75% was lower than R Annual values have been calculated by multiplying the monthly values by 12. The full statistical report uses this method when comparing remuneration between the HE, private and public sectors. 4 A positively skewed frequency distribution is characterized by a long tail to the right hand (positive) side of the distribution. 12

13 TABLE 5.1: MEASURES OF LOCATION OF MONTHLY REMUNERATION (R) OF ACADEMIC STAFF FOR ACCORDING TO MEASURE, YEAR AND INSTITUTION Institution Q1 Me Q3 Average Q1 Me Q3 Average Q1 Me Q3 Average Q1 Me Q3 Average Q1 Me Q3 Average HE SECTOR

14 TABLE 5.2: RELATIVE MEASURES OF LOCATION OF MONTHLY REMUNERATION (R) OF ACADEMIC STAFF FOR ACCORDING TO MEASURE, YEAR AND INSTITUTION (MEASURES OF LOCATION FOR HE SECTOR IN ALL YEARS=100%) Institution Q1 Me Q3 Average Q1 Me Q3 Average Q1 Me Q3 Average Q1 Me Q3 Average Q1 Me Q3 Average HE SECTOR

15 Using a standard model to compare average remuneration between institutions A problem with comparing the average remuneration of each institution (average calculated as the total remuneration divided by the number of staff at each institution) is that the distribution of job levels within the institution has a direct impact on the average remuneration. For example, if institution A had double the number of professors to institution B, with similar total number of staff, institution A is very likely to have a higher average remuneration that institution B. Each institution has a different distribution of academic job levels and thus the average remuneration does not allow comparison between the different institutions. In order to correct for this, a theoretical job level distribution was created by using all the data points in the data set in order to calculate a standard job level distribution for all institutions. This is called the standard model. The model average remuneration for each institution was then calculated by using the model distribution and average remuneration at each rank for each institution. Graph depicts the relative values of the average annual remuneration according to rank but the model number of staff at each rank. Three institutions analyses could not be included since these institutions do not use all staff ranks 1-5. Graph Table details the comparison of the average remuneration and model average remuneration. 15

16 TABLE 5.1.1: COMPARISONS BETWEEN ACTUAL AVERAGE REMUNERATION OF PERMANENT FULL- TIME ACADEMIC STAFF IN 2012 AND THE MODEL AVERAGE REMUNERATION DETERMINED BY USING THE STAFF RANK DISTRIBUTION OF THE HE SECTOR IN Institution 1 Number of staff Average monthly remuneration 2 Average annual remuneration 2 Model average remuneration 4 Annual model average remuneration Difference of model average to HE sector model average * HE sector Calculations not possible for institution 16 (no appointments on staff ranks 1 and 2), and institutions 6 and 18 (no appointments on staff rank 5). 2. Using the total Institutional remuneration divided by the total number of institutional staff. 3. Using the institutional average remunerations according to rank but the model numbers of staff. * this appears to be an outlier and is being investigated. 16

17 Comparing HEIs academics staff remuneration by means of indices in In order to simplify the comparisons between the 22 institutions the information in Table 5.1 it is portrayed as indices in Table 5.2. Each amount is expressed relative to the HE sector amount. The following conclusions have been drawn: i. In 2012 the relative average remuneration (indices) for the institutions fluctuated between 75.8% (Institution 19) and 117.4% (Institution 12), while the relative median remuneration fluctuated between 74.1% (Institution 19) and 115.9% (Institution 2). Most institutions do not differ by more than 10% from the HE sector in 2012 in both the average and median remuneration of academic staff. ii. Generally, taking into account all 4 statistical measures of location a. Institution 19 had the lowest remuneration for the 5 year period; and b. Institutions 2, 12, 17 and 18 had the highest remuneration of academic staff for the 5 year period. iii. The very high relative values of Q1 in the case of Institution 18 in all 5 years indicate relatively high remuneration for academics at that institution in the first few years of their academic careers. [Comment from M Price and J du Toit: this assumes that the more junior staff are paid at the lower end of the range, and thus the remuneration levels of junior staff are depicted by the Q1 values. The conclusion made that the relatively high Q1 values of some institutions indicates higher pay for the junior staff at those institutions can only be made if the ratio of junior to senior staff is the same or similar for all the institutions. If, for instance, there is a greater ratio of senior staff to junior staff, the Q1 value as well as the median and mean are likely to be higher.] Percentile plots of remuneration of academic staff by institution in 2012 Figure 5.1 in the Appendix shows the institutional and the HE sector percentile plots 5 of the monthly remuneration of academic staff members in These plots can be used to determine any percentile, e.g. the 90 th percentile, in the case of each institution or the HE sector. For example, in 2012 about 90% of academic staff members had a monthly remuneration of lower than R Histograms of remuneration of academic staff by institution in 2012 Figure 5.2 in the Appendix shows the institutional and overall sector histograms of the monthly remuneration in With the exception of Institution 21, the positive skewness of the remuneration distributions is evident. The average annual growth rate of monthly remuneration of academic staff for the period Table 5.3 shows the average annual growth rates (%) in the monthly remuneration of academic staff for the HE sector over for the period in nominal and real terms 6. The real average annual growth rate for the HE sector was 2.91% for Q1, 2.94% for the median, 3.73% 5 Percentiles P1, P2, ---, P99 are also measures of location and is a direct extension (or generalization) of the concept used in defining the three quartiles Q1, Me and Q3. The 99 percentiles divide the remuneration array (i. e. the ordering of all the values of the remuneration of academic staff members from lowest remuneration to highest remuneration) into 100 parts of equal size, with the characteristics that e. g. 40 % of the remuneration values are lower as P40, 87% of the remuneration values lower as P87, etc. 6 To convert the nominal rate to real rates the average annual CPI inflation rate of 5.3% was used for the period

18 for Q3 and 3.73% for the average. The remuneration position of academic staff in South Africa had therefore improved significantly during the years TABLE 5.3: CALCULATION OF AVERAGE ANNUAL GROWTH RATE (%) FOR MEASURES OF LOCATION OF MONTHLY REMUNERATION IN RAND OF ACADEMIC STAFF OVER THE PERIOD : HE SECTOR Year Q1 Me Q3 Average Av ann growth rate (%) (nom) Av ann growth rate (%) (real) FIGURE 5.3: GRAPHICAL REPRESENTATION OF QUARTILES AND AVERAGE MONTHLY REMUNERATION OF ACADEMIC STAFF OVER THE PERIOD ACCORDING TO YEAR: HE SECTOR Total monthly remuneration (R) Q1 Me Q3 Average Figure 5.3 shows linear increases in the nominal remuneration of academics in the HE sector from year to year during the years 2008 to Table 5.4 is a summary of the average annual growth rates (%) of the monthly remuneration of academic staff over the period for each of the 22 HEIs, as well as for the HE sector. The following is evident: i. The real average annual growth rate for Q3 was almost 0.82% higher than for Q1 indicates that the position of many academic staff members in the higher remuneration bracket had improved more over this period than the position of staff in the lower remuneration brackets. [Comment from M Price and J du Toit: as the values (Q1, mean, median etc.) are calculated from the individual staff remuneration values, this conclusion assumes that there is no or little change in the profile of the academic staff by rank over the period. However, if for instance, the ratio of senior staff to junior staff increased, the growth rate of the median, mean and Q3 values compared to that of the Q1 value will be higher]. ii. The real average annual growth rates were the highest for Institutions 6, 10 and 11. iii. Apart from Institution 16, all institutions kept track with inflation for the period

19 TABLE 5.4: AVERAGE ANNUAL GROWTH RATE (%) IN MEASURES OF LOCATION OF MONTHLY REMUNERATION OF ACADEMIC STAFF FOR THE YEARS ACCORDING TO MEASURE AND INSTITUTION Institution Nominal average annual growth rate Real average annual growth rate Q1 Me Q3 Average Q1 Me Q3 Average HE SECTOR Basic cash/ salary of academic staff in as percentage of total remuneration Table 5.5 details the average of the individual ratios determined for each staff member (indicated by % (Staff) ). From Table 5.5 it is evident that: i. As far as the HE sector is concerned the ratio was relatively stable over the 5-year period. In 2012 about 73% of the total monthly remuneration of academic staff was paid in the form of cash/salaries. ii. The ratios for the individual institutions show wide variability. This shows that remuneration packages are structured differently at the different institutions. In 2012, for example, the %( ratio of the 22 institutions varied between 62.3% and 78.8%. 19

20 Percentage breakdown of remuneration of academic staff according to type of payment Table 5.6 shows the percentage breakdown of monthly remuneration of academic staff members for the years 2008 and 2012 according to type of payment and year for the 22 responding institutions, as well as for the HE sector. The following are evident from Table 5.6: i. The pension/provident fund contributions represented 11.2% and 10.9% of monthly remuneration in the HE sector in 2008 and 2012 respectively. The next highest allowances in both 2008 and 2012 for the HE sector were the institutional contributions to medical aid schemes (4.3% in 2012) and the annual bonus (3.8% in 2012). ii. There were large differences between institutions in the percentage contributions detailed in the second last catch all column in the table, namely Sum of all other cash benefits. In 2012 these contributions ranged from 0% for a few institutions to 20.4% in the case of Institution 18. High percentages in this column could indicate the inability at some institutions to classify cash allowances correctly into the other well-defined allowances columns. It is, however, more probable that some institutions have introduced allowances over and above the well-defined allowances. One such allowance is, in the case of merged institutions, the entrenchment of staff benefits they had prior to the merger. 20

21 TABLE 5.6: PERCENTAGE BREAKDOWN OF MONTHLY REMUNERATION OF ACADEMIC STAFF FOR THE YEARS 2008 AND 2012 ACCORDING TO TYPE OF PAYMENT,YEAR AND INSTITUTION Group Sum of Contr. to Contr. to Contr. to Contr. to Entertainment Telephon Club Incentive Housing Car Life HOD Scarcity all other Institution Year Basic Cash/ Bonus comb pension provident medical aid e Subscrip- Total Bonus allowance allowance Insurance allowance allowance cash Salary prov/pensio fund fund scheme allowance allowance tion contr. benefits n fund HE SECTOR Statistical analysis of the influence of the explanatory variables in the study of the total remuneration of academic staff in 2012 The full report includes a detailed explanation of the results of correlation and multivariate analyses of the composite effects of seven variables on the remuneration of academic staff in 2012 i.e. institution, staff rank, age, gender, population group, highest qualification and CESM category. The effects of the seven explanatory variables in the variability in the remuneration of academic staff in 2012 is summarised below: i. Staff rank, qualification rank and age are correlated with the remuneration of staff. Staff rank, qualification rank and age are also all correlated with each other. ii. Staff rank had by far the largest effect of all explanatory variables in the explanation of the variability in remuneration of academic staff. In the light of (i) above staff rank therefore in some sense also represented the variables qualification rank and age in the description of the variability in remuneration. iii. The additional regression analyses show that no material effects are due to population group and gender once the effects of staff rank, qualification rank and age have been removed. A small but 21

22 identifiable university effect, as well as a CESM category effect, remains however, in academic staff remuneration after the effects of staff rank, qualification rank and age have been removed. [Comment: it is unclear what the actual differences are. Clearly the staff profile is very important as is the profile of the institution s CESM categories (i.e. medical schools, strong engineering schools and business schools are likely to have an effect on remuneration levels for those institutions. There appears to be little difference between institutions once the effect for all these variables are taken into account. ] The following conclusions were made from the analyses: 1. There is still a small institutional (university) effect left in the remuneration of academic staff once the remuneration values have been controlled for qualification rank, staff rank and age (meaning after the effects of qualification rank 7, staff rank 8 and age have been removed from the remuneration values of academic staff) 2. There is still a small institutional (university) effect in remuneration once remuneration values have been controlled for staff rank and CESM categories. 3. There is no material gender effect (difference between male and female) left in the remuneration of academics once remuneration values have been controlled for qualification rank, staff rank and age. 4. There is no material population group effect (differences between population group groups) left in the remuneration of academics once remuneration values have been controlled for qualification rank, staff rank and age. 5. There is still a small CESM categories effect (differences between the CESM categories) left in the remuneration of academics once remuneration values have been controlled for qualification rank, staff rank and age. 7 Type of highest qualification Qualification code Formal time of study in obtaining highest qualification 3 years or less 1 Formal time of study in obtaining highest qualification 4 years or more (excluding master and doctoral qualifications) 2 Master degrees 3 Doctoral degrees 4 8 HEMIS rank Rank coding Professor or Director (UoT) 1 Associate professor and Associate director (UoT) 2 Senior lecturer 3 Lecturer 4 Junior lecturer 5 Below junior lecturer, undesignated or unknown 6 22

23 Analysis of remuneration according to academic rank / level for the period Tables 5.7 and 5.8 show remuneration information according to academic rank 9. The summary report includes additional graphs depicting the associated annual remuneration. Points to note: Using the 2012 data, the average remuneration of Associate Professors, Senior Lecturers, Lecturers and Junior Lecturers relative to the average remuneration of Professors were respectively 79.2%, 65.7%, 51.8% and 38.6%. The fact that the senior academic staff, Professors and Associate Professors, had the highest real average growth over the period 2008 to 2012, as well as the fact that the average remuneration of professors was in 2012 almost twice that of lecturers, may indicate that institutional management are under some pressure to keep their senior academic staff. 9 HEMIS rank Rank coding Professor or Director (UoT) 1 Associate professor and Associate director (UoT) 2 Senior lecturer 3 Lecturer 4 Junior lecturer 5 Below junior lecturer, undesignated or unknown 6 23