Pay Peanuts and Get Monkeys? Evidence from Academia

In most countries, academic pay is independent of discipline, thus ignoring differences in labor market opportunities. Using some unique data from a comprehensive research assessment exercise undertaken in one such country -- New Zealand -- this paper examines the impact of discipline-independent pay on research quality. I find that the greater the difference between the value of a discipline's outside opportunities and its New Zealand academic salary, the weaker its research performance in New Zealand universities. The latter apparently get what they pay for: disciplines in which opportunity cost is highest relative to the fixed compensation are least able to recruit high-quality researchers. Paying peanuts attracts mainly monkeys.

Academic Salary Compression: A Productivity Model as a Remedy

Salary compression in academe continues to be a problem into the 1990s, especially for faculties in Colleges of Businesses. Even when funds have been available to ameliorate compression, most models used to assess and remedy the effects of compression have not taken faculty performance into consideration. The model in this article is superior in that productivity is a consideration as well as the usual factors of rank, time in rank, and longevity with an institution. The model is illustrated for selected individuals within different departments of a College of Business Administration.