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Joanne B. Ciulla
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Joanne B. Ciulla

Joanne Ciulla is Professor and Coston Family Chair in Leadership and Ethics at the Jepson School of Leadership Studies, University of Richmond, the only undergraduate degree-granting school of leadership studies in the world.

Method Behind the Madness

When times are good people don't spend a lot of time looking at why they are good. Many of the questions we should be asking get pushed underground. In bad times these questions rise to the surface. For many years, we have been happy to relegate the question of who gets paid what to the market. The market is the best way to determine the price of commodities, but the value and to some extent, the market price of a person's work is also determined by the values of society.

The question "Should coaches and leaders take pay cuts?" is really about whether we are paying them the right amount to begin with. When leaders take temporary pay cuts, most people see them as token gestures, especially when they make between four and 100 times as much as other employees in their organizations.

The broader question is would the same sorts of people coach and lead if they were paid less? If the answer is no, then are these the kinds of people we want coaching our young athletes or leading our organizations? Would Coach Calhoun do the same job with the same skill if he were paid less? The usual assumption is that he would act like the so-called "rational economic man" and go somewhere else that paid him more. In good times, we've been content with this kind of behavior and haven't bothered to ask if we really want coaches who behave this way. Wasn't the original role of sports in education supposed to be about developing character, cooperation, and leadership in students?

Universities are a microcosm of the wage/value debate. In most private universities there is a range of pay scales, based on academic disciplines. Faculty members from the arts and sciences are usually shocked to discover what their colleagues in the business school make. The generally accepted argument for this wage disparity is that the salary for an accounting professor or other business professor has to be close to what he or she can make in business. The sticker shock from coaches' salaries is even greater because a coach can make at least four times the salary of an accounting professor.

The standard argument for this pay disparity between faculty and coaches is that winning coaches and strong athletic departments generate student applications, alumni loyalty, and revenue for the university. This may be true for a handful of schools, but most schools are fortunate if they break even on their athletic programs. In hard economic times, the argument for picking a school based on its sports teams looks weak. Most parents care more about academics. Good sports teams may be tie-breakers but it is unlikely that they are the primary reason why a student picks a particular college. Alumni loyalty and donations to sports teams may be important at a small handful of big sports schools but again, in difficult times, most alumni would not be alienated if their alma mater chose to pay less for their coaches to keep the math department going.

In some universities, the president makes about the same salary as the coach (in some places the president makes less than the coach, which is analogous to the case of Calhoun and the governor of Connecticut). So you have this hypothetical situation:

1 university president = 1 basketball coach = 4 accounting professors = 8 math professors (which, in a small school, is the math department).

Again, for years we have accepted, almost without question, that the wages of the two leaders in the equation (the president and the coach) and the accounting professor are based on the market but what about the math professor? Clearly the market does not want to pay much for math professors, perhaps as a matter of supply and demand. Nonetheless, another determinant of value is a person's usefulness to achieving the goals of a university. If we look at the goals of a university and the usefulness of various fields for obtaining its goal, coaches do not fare as well as professors in math, English or any other academic area. While coaches may be said to educate students, they usually only work with a few students. In terms of the value and wages of leaders, we also have to ask ourselves: Why are coaches of equal or greater value than the person who runs the whole university? And why pay a coach what you can pay a math department?

So to return to the case of Jim Calhoun, it does not matter much if he voluntarily takes a pay cut. What does matter is that the university rethink the way that it pays coaches. This economic crisis offers a wonderful opportunity to rethink the value and pay of leaders in all areas. If organizations do it now, they might be able to end the pay arms race that has not always given us leaders with the values that we want for our organizations and institutions.

By Joanne B. Ciulla

 |  March 17, 2009; 12:17 PM ET
Category:  Compensation Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Hey, if you did not know, we live in a society driven by capitalism and market place values. It is not surprising that these values slip out of commodity pricing and morph into wage and personnel pricing, even if the criteria for bidding does extreme violence to other more useful values.

Posted by: semeritus1 | March 18, 2009 10:59 AM
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Universities have compromised their academic programs for years to make money from the athletic department. This is an issue that won't go away soon. I do believe that the emphasis on sports to raise money for the university is unfortunate. We need to fund math departments, art and music departments in higher education --no matter what the economic conditions. Its time for the athletic department to be less of a dominant role and more of a partner in higher education.

Posted by: vedaman | March 18, 2009 7:29 AM
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