Monday, September 07, 2009

How not to ask for a pay hike: 3. We'll lose our smart faculty

I have a humble request to the faculty members at IIM-A.

Please don't say things like this:

"The MHRD wants world-class quality in the IIMs. But quality comes at a cost. Unless the government reconsiders the entry-level pay in premier academic institutions, it runs a very real risk of not only not attracting new talent, but also losing the faculty that it already has," the memorandum said. [Bold emphasis added]

Please remember that there are so many senior professors among your ranks. If you still insist on the correctness of this risk analysis, you are saying -- implicitly, of course -- that they are all lucking fosers.Or, incompetent retards. Or, ...

That's all.

* * *

Actually, that's not all. You know, perhaps you should consider the following:

  1. The salaries under the Sixth Pay Commission are higher by as much as 75 percent for all categories.

  2. The SPC award comes at a time when firms have been on either reduced or frozen hiring. I hear people talking about a "global recession" and a general glut in the market for managers.

  3. Putting these two observations together, I think a reasonable person would conclude that during the past decade or so, the salaries were far lower than at present, and the external conditions were far better than at present.

And yet, a large number of IIM-A's senior professors chose to stay on. To me, this cries out for an explanation. Unlike what you seem to think, I actually think of IIM-A professors as (somewhat) rational beings who respond to incentives. You know, incentives such as:

  • Non-salary benefits. Safe, comfortable on-campus housing, a congenial atmosphere for kids to grow up in, etc.

  • Many opportunities for earning extra money through consulting and EDPs.

  • Maybe, just maybe, a benign environment that makes minimal demands on faculty, generally making life quite comfortable.

One could think of several others. Thus, I suspect you are grossly overestimating the risk of losing people.

Please don't back up your salary demands using justifications that can't survive even minimal scrutiny.

At the least, please don't let your justifications give the impression that those who leave IIM-A are somehow superior to, or smarter than, those who choose to stay on. You are sending a very wrong signal.

That's all.


  1. Anonymous said...

    I think IIM faculty is definitely superior, specially to materials science types that like to blog a lot ;-)

    Jokes aside, I agree. You do have a point Abi. But have you seen the news story (I think it was on timesnow) that the government is considering amending the IIM charter to let the institute pay its faculty on prevailing market rates (apparently with Kapil Sibal's blessings). What do you think of that?

  2. Dhananjay Nene said...

    Hmm..They shouldn't be saying this. After all they may look out of their windows and see their batchmates getting 10x and they should really be shutting their eyes. In fact thankfully they didn't make any statements with respect to the fact that we might have already lost many more quality faculty who could've helped encourage, inspire and nurture strong students just because the so called security, comfortable on-campus housing, atmosphere for kids was not sufficiently important to them (the already lost faculty). Perhaps they should've confessed that they are not in it for the money but for the comfortable housing et al. and therefore the compensation isn't really important, and that it is actually helps them because it reduces the competition pool amongst the faculty.

    I'm sure one can have multiple views about what is the "right" remuneration - but questioning their statement actually hides the implicit and otherwise obvious conclusion that in all likelihood we've already lost many who could've been good faculty. So maybe even if they are in it for the comfortable housing et. al. (as partially inferred), their conclusion in terms of the implication on a poorer faculty pool, perhaps just might be bang on.

  3. Anonymous said...

    I think faculty salaries should be driven by market standards. How can somebody justify students making on average 12 lakhs/year whereas faculty making around 6 lakhs/year in IIMs? I don't think the salary structure even after the 6th pay commission is attractive enough. Even private business schools such as ISB pay Assistant Professors around 20 lakhs/year. If salaries are not comparable how can IIMs attract talented people. In Indian education system faculties get similar salaries irrespective of their disciplines. This is ludicrous. Market conditions should drive faculty salary. In US Business School faculty make more than Engineering faculty followed by Science and Arts faculty. I don't think Art departments in India face attrition problems because of salaries offered to faculty. We need to attract talented people to these institutions otherwise even students in these places, let alone the outside world, would stop giving respect to the faculty.

  4. Anonymous said...

    Excessively leveraging a currency or commodity can suddenly reverse the baseline. Some decades back, a lackluster school and college record followed by shitloads of income (if honest) used to elicit comments like "he must have had some talent to make this kind of money". Nowadays I often hear "if that guy is making so much money, you know the money isn't worth the electrons it's printed on". MHRD and Sibal should be liquidated w.i.e., but not because they screwed up IIX salary.

  5. Gaurav Varma said...

    Has it occurred to you that faculty now are presented with far more options than in the past? That it hasn't happened in the past is scarcely a line of reasoning to build an argument upon.
    The threat is real..I know of a couple of Profs. who joined ISB leaving IIM Lucknow around the time that I was there. The incentives are very disproportionate. And this is why a mass exodus seems imminent if that imbalance isn't addressed.

  6. Anonymous said...

    The only thing that I can say about IIMs is that they are nowhere compared to IITs or IISC on the research level. I (or my students at our so called bigshot B school) have never read ANY paper by ANY current IIM faculty. More specifically there are Zero, Zilch papers by ANY FPM (the Phd program at IIMs) in any reputed management journal. I graduated from IIMC, so have a soft corner for IIMs , but am quite clear that IIMs do not deserve to be ranked at a similar pedestal that can be accorded to IITs and IISC. Yes, the Indian industry is also callous about academic partnership with B schools, but I still remember my Professors playing PACMAN (oh I have aged!) on their computers when we went in to talk to them at IIMC.

  7. Anonymous said...

    There are very few who are self-motivated. For others you need an incentive scheme. I don't think the professors at IIMs are callous or less smart than professors from any other top business school or iits or iisc for that matter. When there are no fruitful benefits given to them for publishing papers why would they spend time on writing papers. With salaries that are "peanuts" in current market scenario they look at consulting or MDPs to bolster their income. We need incentive schemes and "right" salaries, otherwise you will see professors playing "pacman".....

  8. Anonymous said...

    I have a naive question - Should govt be in the business of IIM's ? I understand the need for new IIX'x but IIMs through taxpayer money - not sure at all.

    The bottom line is however much the salaries are increased, the rate of savings will increase even more and at the end the cry for more money will not end. India is perhaps one of the few lucky countries where the global or national fortunes are completely delinked from the fortunes of government salaries.


  9. Anonymous said...

    To Anon above - You missed the point. Research is not linked to salaries. Why? Because salaries at IIT and IIM are same. YET, there is good research in IITs and dismal research at IIMs. Got it now?

  10. Anonymous said...

    To Anon just above- My point was you need to give incentives to get the best out of somebody. It is the inherent flaw in our Indian education system. My objective was not to compare the research done in IITs with that in IIMs. If there is adequate reward system I am sure the faculty at IIM would do "good" research. For the IIM faculty there is more reward if they generate revenues through consulting and MDPs. My point is there needs to be an adequate reward system for research as there is in US Univs. Then you will see papers being published from IIMs.

  11. Abi said...

    @Anon (8:08:00): IIM faculty do get their salaries, don't they? If it's not for the job they are supposed to be doing -- some minimal teaching and some minimal research -- what the hell is it for? Why do they need "incentives" for doing research?

  12. Anonymous said...

    To Abi- I don't know why you are not understanding my point. I am not trying to justify why IIM faculty or for that matter faculty at any other institute, are not doing research. My whole point is Indian education system lacks the proper incentive mechanisms. Does the salary that faculty at IIXs earn depend on the research they do? NO...That's my point. The salaries these people earn or their promotions do not depend on their research output. I think IIXs need to change that. You can argue on this, but I think one of the main reasons why faculties in US universities are far ahead in their research output is because of the reward schemes. Unless we develop something similar we would lag far behind.

  13. Anonymous said...

    IIM faculties are leaving because there is not enough money to be made - well, if you are a prof in a business school in the US you can never make more money than an executive on Wall Street ? If that is true, there should be similar problem in the US, and yet they manage to survive ?

    As for linking pay to output, majority of the jobs in US are temp in nature. Even govts downsize and govt employees lose jobs. Can you imagine indians being prepared for that ? (I am not even going into the arguments of whether that system should be replicated)

    If jobs are safe, as they currently are in IIX'x, and if it is to be believed that there is a lot of grant money waiting for good ideas, what is preventing good research ? The lack of good salaries ? I wish (an utopian wish ?)the govt would once for all satisfy everything that faculties ask for and give them 10 years, and see what the output would be like.

    I am reminded of bank employees who used to argue, and maybe still do, that if they received equivalent amounts to what their colleagues in private banks got, their work culture would improve dramatically and there would be no difference between the state and foreign banks in India. Unfortunately, we will never know but this is something that I find hard to believe.