1. Maintaining Excellence When You Don’t Control Funds Flow Barbara Petit 1 AASA Annual Meeting October 6, 2015

2. Background 1998-presentBudget process changes virtually every year 2006-2013Individual department compensation plans 2011-presentBudget to achieve targeted contribution margin 2012-presentManage revenue and expenses to achieve margin October 2012New Dean / Provost March 2014(Second half of fiscal year) New faculty compensation and incentive plan (FCIP) 2

3. Department of Surgery – All Funds Adjusted Margin Report August FY 2015 (unaudited) 3

4. FCIP Guiding Principles Simplicity Each faculty member should understand and be able to explain the principles guiding how he or she is compensated Positively correlate productivity with compensation Progressively reward high performing faculty members across all missions while establishing accountability, covering appropriate overhead and addressing any productivity outliers More clearly define clinical and academic performance expectations, the relevant metrics and corresponding incentives 4

5. FCIP Overview 5

6. Incentive Structure: Qualifications Faculty members will have a total FTE of 0.5 or higher to be eligible to participate. Within each mission area, you must either be 50% clinical effort, 50% research effort and/or 20% education effort to be eligible. Plan participation includes faculty at the rank of Assistant Professor, Associate Professor, and Professor. Administrative effort up to 10% for clinical, research and education for all faculty members Research salary support assessment begins after last year of ramp- up time (12-month rolling average calculation with potential for extended period based on scored, but not funded grant submission). 6

7. Incentive Structure: Individual Clinical Incentive Example 7

8. Incentive Structure: Individual Clinical PBA Example 8

9. Challenges We are expected to “manage to a margin” we do not control. Examples: Net patient care and grants and contracts revenue projections are increased for “non-productive faculty” Depreciation expense Overall School of Medicine or academic enterprise targets Individual incentives are calculated and distributed by the Provost’s Office. We only partially control up to 20% of the incentive distributed. Not all faculty effort is paid at the same rate. 9

10. Maintaining Excellence Make tough choices Examples: Unfunded research, travel, staff support Communicate Advocate Negotiate Start-up commitment (Really makes it easier!) 10

11. Questions? 11