University Discovers Incentives! Strangeness Ensues.

Little advances in free-market entrepreneurship among universities always make my heart go pitter-patter. It's like seeing a man sling off his leg braces at a church revival and start jitterbugging down the aisle to the collection plate. I don't doubt the process is much different, in fact -- some university provost or president attends a management seminar or reads a business book, has an epiphany about how people might actually -- just maybe, who woulda thunk it -- be self-interested problem-solvers, and the next thing you know he's spreading the gospel of incentives, or streamlined authorization processes, or continuous improvement.

Then, likely as not, no matter how he soft-peddles and tiptoes, no sooner does he breathe "incentivize" than the high-strung territorial hens who are his faculty and staff stir themselves up into a shrieking frenzy, and the next thing you know, people who have feuded for 20 years over who gets the office with the fewest rain-soaked ceiling tiles are joining arms and singing The Internationale.

A university has to baby-step to markets, is all I'm saying. This is why I read with interest in The Chronicle of Higher Education (subscription required) that Kent State will soon pay over $2 million in bonuses to 800-plus faculty members, based on increases in freshman retention, research grants, and fundraising.

The catch: only tenure-track faculty are eligible, and all get a cut, regardless of their contribution. One professor interviewed for the article, the union's "first vice president" (not very egalitarian, that title), is pleased about his coming bonus, but notes that he rarely interacts with freshmen; is in a department (Journalism) that doesn't attract big grants; and has little to do with fundraising.

The university's vice president for research, meanwhile, helped land several major grants, but is ineligible for a bonus because he isn't a tenure-track professor.

The incentives certainly seem skewed, what with people who have done little getting rewarded based on title, while others hit home runs and get left out because they aren't in the right department. Then again, that sounds like more than a few big corporations with which I'm familiar, where bonuses are more rigidly tied to longevity and status than in the Nomenklatura.

So while I'm inclined to cheer this first taste of something like market discipline at Kent State, I'm thinking it just reinforces bad ideas about rewards and value-creation, namely that cleverness and position are themselves value-creating, and that rewards ought to be distributed based on the same.

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