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Problem Title: The Aluacha Balaclava College Problem

  Year: 1995      
  Student Level: Undergraduate      
  Source: MCM      
  Commentary: Yes (1)      
  Student Papers: Yes (4)      

Background Information:

Aluacha Balaclava College has just hired a new Provost. Problems with faculty compensation at the college forced the former Provost to resign, so the new Provost needs to make the institution of a fair and reasonable compensation system her first priority. As a first step in this process, she has hired your team as consultants to design a compensation system that reflects the following circumstances and principles.

There are four faculty ranks: Instructor, Assistant Professor, Associate Professor and Professor, in ascending order. Faculty with Ph.D. degrees are hired at the rank of Assistant Professor. Faculty who are working on a Ph.D. are hired at the rank of Instructor and promoted automatically to Assistant Professor upon completion of their degrees. Faculty may apply for promotion from Associate Professor to Professor after serving at the rank of Associate for seven or more years. The promotion decisions are made by the Provost with recommendations from a faculty committee and are not your concern.

Faculty salaries are for the ten-month period September through June. Raises are always effective beginning in September. The total amount of money available for raises varies from year to year and generally is not known until March for the following year.

The starting salary this year for an Instructor with no prior teaching experience was $17,000 and for and Assistant Professor was $32,000. Faculty can receive credit, upon hire, for as much as seven years of teaching experience at other institutions.


  • All faculty should get a raise any year that money is available.
  • Faculty should get a substantial benefit from promotion. If one is promoted in the minimum possible time, that benefit should be roughly equal to seven years of normal (non-promotion) raises.
  • Faculty who get promoted on time (after seven or eight years in rank) and have careers of 25 or more years should make roughly twice as much at retirement as a new Ph.D. starting off.
  • Faculty in the same rank with more experience should be paid more than others with less experience. But the effect of an additional year of experience should diminish over time. In other words, if two faculty stay in the same rank, their salaries should tend to get closer over time.


First, design a new pay system without cost-of-living increases. Then incorporate cost-of-living increases. The final piece of this project is to design a transition process for existing faculty that will move all salaries towards your system without cutting anyone's salary. The existing faculty salaries, ranks and years of service, are in Table 1. Discuss any refinements that you think would improve your system.

The Provost has asked for a detailed pay system plan that she can use for implementation, as well as a short executive summary in clear language, which she can present to the Board and to the faculty. The summary should outline the model, its assumption, its strengths and weaknesses, and the expected results.

Click here to view Table 1.


Judge's Commentary: The Outstanding Faculty Salaries Papers

Donald E. Miller
Dept. of Mathematics
Saint Mary's College

  Student Papers      

Paying Professors What They're Worth

Harvey Mudd College, CA


The World's Most Complicated Payroll

North Carolina School of Science and Mathematics, NC


Long-Term and Transient Pay Scale for College Faculty

Southeast Missouri State University, MO


How to Keep Your Job as Provost

University of Alaska Fairbanks, AK