16 September 2010

UC Regents vote to increase UCRP contributions

We knew this was coming. From UCOP's official announcement:
The University of California Board of Regents today (Sept. 16) voted unanimously to increase the amount UC and its employees contribute to the pension plan, taking an important step towards putting it on solid financial footing.

Beginning in July 2011, employee members of the UC Retirement Plan (UCRP) will begin contributing 3.5 percent of salary into the plan; UC will contribute 7 percent. The amount will increase again in July 2012, with employees paying 5 percent and UC paying 10 percent.
Of course, further changes to the Retirement Plan might be forthcoming at the Regents' meeting in November.

14 September 2010

The Bain Berkeley model for faculty: the sequel

First of all, here's why we should all care about what happens at Berkeley. The model being pushed at UCB by the administration on the basis of their Operational Excellence  initiative and the report commissioned from Bain is bound to be a benchmark for the whole system. The other nine campuses will be under increased pressure either to take similar measures or to be relegated to second-tier teaching institutions. It's important therefore that faculty and staff through the system respond to the more extreme distortions of the Berkeley-Bain model, on pain of seeing that model pushed on them as well.

We already commented on the two main components of the proposed model, i.e., the push to both centralize and standardize, and Chris Newfield now has a detailed analysis. In particular, Newfiled points out how the solutions proposed by the Bain report do not align with the problems they identify. Their diagnosis of the administrative problems at Berkeley should rather recommend a bottom-up, distributed organizational model (which is characteristic of organizations with a capacity to innovate), not the top-down, authoritarian model that Bain imported wholesale from  corporate culture – and an outdated one at that.

The most disturbing aspect of the report, of course, is the proposed staff reorganization based on the concept of supervisory span (the target here is a 6.6 span, meaning that each supervisor should have on average 6.6 position immediately below in the organizational chart). Moreover, the advertised 6% to 8% cut in their $700M payroll would translate in laying off close to 10% of the staff. Berkeley staff are understandably worried, especially in absence of any meaningful and organized response (see the comments to Michael Meranze's Staffing the Downsize).

Faculty should not be lulled in the conviction that the proposed reorganization does not affect them. It does and it will. If the recommendations of the Bain report are implemented, this would make life much more difficult for faculty as well (as also Chris Newfield points out). Let's not make any mistakes about this: until and unless the faculty speak up about this and support, even lead, the staff in their push-back, this what the future will look like at UCB and across the system.

But there is more: the Berkeley administration has, of course, a particular vision for the faculty as well (we would not expect anything less from them). It's just that it's easier to deal with staff first. The documents posted in preparation for the Aug 19 "Retreat" for Deans and Chairs spells it all out. A handout ominously entitled "Beyond Compromise" (written by two Berkeley faculty and an administrator) explains the implications of the Commission on the Future recommendations for Berkeley. Beside the by-now old chestnuts of online instruction and non-resident tuition, the presentation introduces "alternative faculty compensation plans." The handout does not go into much detail about these compensation plans, but it does indicate clearly that it would involve a "two-tiered status of faculty." The top tier supposedly would be comprised of research faculty (bringing in copious amounts of grant money under increased overhead rates), while the bottom tier would be comprised of mainly teaching faculty, including a "greater proportion of courses to be taught be lecturers and GSIs." The proposed shift would naturally result in "fewer ladder rank faculty, more lecturers."

Not a lot of reflection is needed to see just how bad an idea this is. The two-tiered model for faculty runs counter to very idea of a research institutions and undermines shared governance. The whole point a student coming to Berkeley is the opportunity to be taught by world-class faculty and, for instance, learn physics from a Nobel laureate. Conversely, our top faculty should relish the opportunity to teach introductory-level courses. Expanding the roles of lecturers and GSIs would greatly damage the idea of an institution such as Berkeley. Graduate students are not here to provide cheap labor but to learn the trade and develop their research skills.

One also has to wonder how exactly Berkeley plans to reduce the ratio of ladder faculty to lecturers and GSIs. Attrition through a hiring freeze? Tightening tenure standards? Encouraging people to leave by not matching outside offers?

Again, if the faculty at Berkeley and elsewhere do not speak up and develop an articulated response to these guidelines, this is what the future will look like.

09 September 2010

The Berkeley Bain Report

The consulting firm of Bain & Co. has finally released their Operational Excellence report commissioned by Chancellor Birgeneau. It's chok-full of organizational jargon and catch phrases, not excluding crimes against the English language (who knew that to "incent" is now a verb?). I have taken only the most cursory of looks at the 205 slides of the report, and here are some first-hand impressions.

There are, of course, some commendable ideas in the report, for instance when it comes to energy savings (yes, it's a good idea to turn off the lights when you leave your office). But the rest of the recommendations are informed by just two principles: centralize and standardize. The distributed nature of many services at UCB, along with the diversification it entails, are identified as cost sources. The proposed solution is to centralize as much as possible the delivery of services, not just to achieve economies of scale but also to bring about increased efficiencies when the units reach a given critical mass – the appropriate size (measured in FTEs) to allow for  a more rational allocation of tasks.

The report addresses several areas:
  1. Procurement
  2. Organizational simplification (including HR, Finance) 
  3. IT
  4. Energy management 
  5. Student services
  6. Space management
(the last more tentative). One recurring theme that is bound to be the most controversial is the issue of supervisory span, i.e., the average number of people who report to a given supervisor. The average span at Berkeley is relatively low (about 4.4). The report recommends bringing that closer to the benchmark of "6-7 for expertise-based functions and 11-13 for task-based functions" (whatever that means). The result would be a much flatter organizational chart, with many people now in supervisory position re-classified as "contributors" (i.e., people with no further employees below them – gotta love the jargon, in the best Minitrue tradition). The report makes no effort to hide that as part of this flattening process, many employees would have to be "transitioned" (the transition is of course from "gainfully employed" to "out of work").

The main thrust of the report seems to be that about $100M of potential savings can be achieved by reducing diversification in the delivery of services, downsizing and re-organizing lower-level staff, and centralizing many functions. (I also could not help noticing how the report makes no mention of the extravagant expenses incurred by the supposedly self-sufficient UCB Athletics department, which, have been consistently backfilled with campus funds for many years.)

It is also important to take notice not just of the substance of the recommendations, but also the manner of their implementation. Bain envisages these changes to be brought about in a completely top-down manner (the word they use, of course, is "cascaded"), with no participation by the staff and faculty that would bear the brunt of these measures.

And all this, of course, cost Berkeley about three million dollars. I am sure many of our own faculty at business schools across the system could have come up with better solutions for a lot less.