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Table of Contents

Introduction 2

Research purpose statement 2

Literature review on compensation issues and its application in Canadian university 3

Compensation issues concerned with Canadian university faculty in the past 4

Current changes in compensation issues for Canadian university faculty and their reasons 5

Future trend of compensation issues for Canadian university faculty 6

Reference 7

Introduction

With the trend of economic globalization and the arrival of the era of knowledge economy, there seems to be an increasing demand for talents. It is widespread acknowledged that the competition for talents especially for high-quality talents has become the international competition. And it cannot be denied that the faculties in the universities are among the best talents in a country. Canada is a country with diversified and open culture and traditions. There are a variety of elite universities in Canada, making this country with prestigious reputation in terms of its high education quality in the world. High quality education requires high quality education; as a result, selection and appointment of faculties in colleges and universities in Canada often conforms to strict and rigid requirements and standards. In addition, the compensation system in Canada is more advanced and considerate towards faculties in universities in Canada than other countries in the world. The unique characteristics of the higher education system and the flexible personnel compensation system makes Canada become the most attractive western learning and teaching country. In this research paper, it will firstly make a literature review of the compensation issues and its application in Canadian universities. And through the introduction of the personnel compensation system of Canadian universities from the past to the current situations, it is possible to reveal the dynamic personnel compensation system’s incentive effect on the development of higher education and indicate the future trend of compensation issues for Canadian university faculty.

Research purpose statement

Compensation system lays the foundation for the development and maintenance of human resource management. In terms of the construction of compensation system, the Canadian federal government and state labor government departments only pose macroscopically control and influence on the compensation system in universities in the Canada. In most cases, it mainly concentrates on the lowest level of salary standards, the application of the belief of same standard for males and females as well as the adjustment on the conflicts and contradictions between employers and employees concerning with the compensation issues. In addition to these points, the Canadian federal government and state labor government departments do not concern about the concrete distribution of compensation and salaries of employees. In this research, it will be conducted based on the above traditions and customs in Canada about the compensation system in universities and higher education departments. By looking at the compensation issues and its application in Canadian universities in the past a few years, it is possible to draw some lessons from its experience and make some changes in the current compensation systems for Canadian university faculty. And at the last process, the research purpose is to make prediction about the future development trend of compensation system in Canada.

Literature review on compensation issues and its application in Canadian university

In Canada, it is the provincial ministry of education that takes responsibility for higher education. As for the local government, it is always committed to issues such as putting forward major policy, education planning and allocation of funds and so on. In most cases, local government has no right to interfere in the daily operation of university and its affairs. Most universities are famous for their high degree of autonomy, in which the "bicameral" management system is generally applied and used by setting up the board of directors and the general committee respectively. The board of directors is responsible for the appointment of school administration leadership, raising money for the university as well as posing supervision on the financial expenditure of university. They act as the link between school, the local government as well as the public. School board is composed of a variety of representatives from different departments, which is responsible for all matters relating to education and academic activities, including the arrangement of courses, teaching plan and scientific planning, employment of professors and so on. As for the human resources management, it is under supervision of vice president who is responsible for academic issues. And the department of human resources and employment relations management will contribute to the specific personnel management and evaluation issues in daily operation, which will be accompanied by the wages and employee benefits office. The hiring, promotion, salary and compensation issues of faculties in universities are dominated by corresponding levels of committees with specific operation. The employment system in university in Canada is composed of both the system of lifelong tenure as well as the employment system. By awarding some professors or associate professors with lifelong tenure or titles, it is possible for the university to inspire them to contribute more time and energy to the scientific research. And the employment system is still on operation for other faculties in university. The open wanted position is always for assistant professors. However, there are cases when professors are needed, they will be hired and even contracted to lifelong tenure.

As for the compensation system for faculties in universities in Canada, the government will act as the general leader while universities will construct their compensation system according to the market demand and prices respectively. Generally speaking, in Canada, universities are equipped with the autonomy of distributing salaries and compensation by taking collective bargaining mode, namely the balance and negotiation between bilateral interests. Various levels of trade unions that are representative of a certain group of faculty and staff may conduct collective and negotiation talks with the government or the university. In most universities in Canada, there are four levels of faculties’ positions, namely the lecturer, assistant professor, associate professor and professor. This faculty level system lays the foundation for the compensation and salary system in Canadian university. The compensation system for faculties in Canada is consists of three parts, namely the basic (position) salary, performance salary or bonus and welfare. In general, the compensation level is settled when faculties sign their employment contract with the universities. First of all, there are limitations in terms of the highest wage and the minimum wage of all the employees in all the universities. The education degree of teachers, teaching level, the quantity and quality of academic achievements and the working years are the factors that determine their real wage level. In addition, due to the difference of school property, reputation and social needs in different subject area, there are differences in terms of the compensation system in different universities. Apart from this, the teachers' salaries will change and fluctuate according to the consumer price index every year. In order to encourage faculties to carry out scientific research and inspire their teaching innovation and enthusiasm, university will also offer quite a proportion of performance pay with the average of increasing rate at around 3 percent except for administrative personnel (Sparks and Waits, 2011). Another important part of the compensation system for faculties in university is the benefits system, including social insurance and some unique types of welfare. Social insurance refers the way of collecting funds from both the employers and employees and applying the funds to issues like pension and medical treatment. As for the welfare, it includes the protection of vulnerable groups, holiday system, and career development. In addition, faculties in the higher education in Canada may benefit from the overall nationwide social welfare system, which may provide all kinds of benefits, such as medical, unemployment as well as pension etc. The comprehensive and incentive compensation system for faculties in the Canadian university may contribute to arousing teachers' enthusiasm for a positive service and a high degree of social responsibility.

Compensation issues concerned with Canadian university faculty in the past

In 2003, compared with Australia, the United Kingdom, the United States and New Zealand, compensations for all levels of faculties in the universities in Canada are much higher than their counterparts in the above countries after removing all kinds of variables factors (U.S. Department of Education, 2009). According to the statistic, among the five member countries of the Commonwealth of United Kingdom, compensation levels for faculties in Canada rank the second place in the ranking list in the school year from 2006 to 2007. And Canada has been regarded as the ideal teaching country for higher education teachers, which may account for the phenomenon that why there are a large number of foreign teachers flowing to Canada in recent years. However, if take the social and economic development of Canada into consideration, the compensation and salary increase for faculties in Canada are not so obvious. In the 1990s, as a result of the negative growth of university teachers' salaries, the number of faculties in universities dropped from 32,669 in the year 1991 to 28, 647 in the year of 1999. And the sharp decrease of student-faculty ratios posed huge losses to higher education and its sustainable development. It was not until the year of 2000 that the situation had been improved. However, the fact that the relative low increase rate of faculty enrollment number as well as their compensation and salaries still posed negative effect on the development of higher education in Canada. As has been estimated, between the years of 1994 to 2004, the national university teachers' induction rate rose only by 6 percent, compared with a professor and associate professor induction rate fell by 6% and 5% respectively. As for the compensation system, the average salary of teachers in universities in ten years rose only 4 percent. The slow growth in faculties’ compensation and salaries has greatly hindered the development of higher education in Canada and may be the root of a variety of unstable factors. In order to safeguard the legitimate rights and interests of faculties, the association of faculties in the university decided to work together to negotiate with university and argues for a raise in compensation. Take the University of Toronto as an example, in August 8, 2007, the faculty association reached an agreement on the compensation system, welfare as well as pension issues with the university under the mediation of the referee. According to the new agreement, in the school year of 2007 to 2008 and 2008 to 2009, the university should reach a pay rise of 3 percent per year at least for meal allowance. And retirees’ pensions should be adjusted depending on the cost of living cost in the previous year. And according to the children education allowance program that will take effect in January 2009, the university should make up for the cost for children education cost in the year of 2008. For faculties’ children who are under the age of 7, the compensation will be about $ 2,000 education subsidy for each of them, which accounts for 50 percent of the whole children education cost throughout the year. Apart from this, other medical aid also increases accordingly (Williams and Olson, 2009).

Current changes in compensation issues for Canadian university faculty and their reasons

In Canada, there is tendency that the compensation system favors faculties with higher education degree, namely the higher education degree one gets, the higher compensation will be. Generally speaking, university teachers' salary development is characteristic of the following characteristics:

First, the regional difference is remarkable. As has been stated in the former part of this research report, the compensation system for faculty in university in Canada is regulated by the government, but it is finally decided with universities’ own autonomy. The compensation management pattern results in big differences in Canadian universities teachers' compensation system in different regions. According to the latest data, in the 2005 to 2006 academic year, the average salary for professors in Canada is 116, 040 per year, and there are only three provinces, namely the Alberta, British Columbia and Ontario’s average level go beyond the national average (Foldesi, 1996). Ontario gains more advantage in terms of the quantity and number of higher education compared with other provinces, which makes it the leader in terms of the teacher's compensation allocation. Judging from the concrete data, there is large gap in terms of the compensation system for different faculties in Canadian university with the differences of several times. Another feature is that professors and associate professors with administrative positions tend to get higher compensation than ordinary professors and associate professors.

Secondly is the significant difference between male and female faculties’ compensation level. As has been widely acknowledged, the number of female scholars and their positions in the subject system may act as the indicators reflecting the degree of gender equality in a country's intellectual and academic circle. In academic field in Canada, female's status in Canada academia has yet to be promoted. In terms of the compensation and salary, it is found that female faculties’ pay is much lower than male. In 1996, female’s pay is only 83.3% of male with the same objective conditions such as education degree and working years, and this percentage only rose to 88.9% by 2005. In spite of the fact that all walks of life in Canada are actively advocating equality of different genders and equal pay for equal work, the reality is not optimistic which may pose negative effects on female’ working and research enthusiasm to engage in academic research and teaching.

Last but not the least is the significant difference in different subjects. The compensation system for faculties in Canadian university stays a close relation with the price level in labor market in Canada, which is known as the market-oriented salary system. Faculties in subjects with more social demand, higher anticipated social benefits and more employment chances will likely to receive higher level of compensation and salary, such as dentists, law, business administration and so on. According to the statistics, it shows that in the 2005 to 2006 school year, all levels of medical school teachers earn average salary which is much higher than their colleagues in universities. At present, the highest paid profession is the medical professional with professor average earning reaches as many as $122, 592. And the lowest subject is art major, with only $105,444 (Sutton and Bergerson, 2001).

Future trend of compensation issues for Canadian university faculty

From a historical perspective, based on the characteristics and position of university teachers' knowledge professional, the compensation system in Canada is characteristic of stable and sustainable development, making it possible to attract and encourage faculties to devote more energy and time to scientific research and teaching. However, with the trend of fierce competition and economic globalization, the flow of high level talents tends to be an internationalization trend. In response to the demand of the development of higher education, in the 2000s, there was a revolution in the Canadian faculties’ compensation system by addressing the enhancement of the cost effectiveness of teachers, strengthening the flexibility in personnel employment and competitive mechanism. The application of performance and incentive mechanism in the compensation system may also contribute to development of higher education.

Reference

Foldesi, R. S. (1996). Higher education compensation systems of the future. CUPA Journal, 47(2), 29–32.

Sparks, E., and Waits, M. J. (2011). Degrees for what jobs? Raising expectations for universities and colleges in a global economy. Washington, DC: National Governors Association.

Sutton, T. P., and Bergerson, P. J. (2001). Faculty compensation systems: Impact on the quality of higher education. ASHE Higher Education Report, vol. 28, no. 2. San Francisco: Jossey-Bass.

U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System. (2009). Enrollment and Institutional Characteristics Survey. Washington, DC: Analysis by the American Council on Education.

Williams, R. L., and Olson, S. D. (2009). Leadership development in higher education: Dispelling the myth of intellect. In J. C. Knapp and D. J. Siegel (Eds.), The business of higher education, Vol. 1. Leadership and culture (pp. 79–112).