Thursday, August 10, 2006

Should faculty salaries be higher?

It's almost an urban legend that our elite institutions (EIs) -- such as the IITs and IIMs -- are facing an acute faculty crunch. The shortfall in faculty in some IITs is alleged to be as high as 30%. With the impending 54 % increase in student intake due to the government's reservation policy -- this increase will preserve the number of general category seats -- the faculty crunch can only get crunchier. At least, that's the theory.

However, for each position that our EI's seek to fill, I'm sure they receive quite a few applications. The fact that so many faculty positions remain unfilled must be because the institutions find many -- if not most -- of the applicants unsuitable. Clearly, there's intense pressure on EIs to do something about making faculty positions more attractive, so that they attract more and better candidates. Increasing faculty salaries is one of the suggestions.

As attractive as this solution is -- hey, I would love a bigger paycheque! Who wouldn't? -- there are some issues that I want to ramble on about touch upon.

First of all, are the current salaries really too low? A fresh recruit (e.g., an Assistant Professor at an IIT) starts at a pre-tax salary of about Rs. 250,000 per year, which works out to a measly $5,000! Per year!! Convert this figure using purchasing power parity (and I believe the factor is about six for India), this figure magically 'grows' to a far more respectable $30,000 per year.

Let's add some non-monetary perks to this figure. Most EIs have rather nice campuses with their own residential zones with faculty housing, and on-campus schooling for their children. There are other benefits associated with staying on campus: silent, pollution-free campus and healthier living. Most importantly, commuting through brutal traffic conditions is not necessary. If you monetize these benefits, it would work out quite easily to between Rs. 50,000 to Rs. 100,000 a year, (or 5,000 to 10,000 PPP dollars).

From this point of view, the salary doesn't appear all that low. However, a PPP factor of six is only an average figure for the entire country. Presumably, this factor is different for different classes of goods; a dollar can go a long way in our country if food is what you are buying. It certainly doesn't go far when you are buying a car or a computer. Thus, the PPP factor is probably quite high for the former, and quite close to (or, even less than) one for the latter. Presumably, faculty members at EIs consume more of the latter than of the former; if so, the PPP factor appropriate for them is likely lower than six. This argument pushes the PPP adjusted salary back -- and down -- to sob-inducing levels.

Let's use another metric: compare the raw salary (without adjusting for PPP) against our per capita GDP, which is about Rs. 25,000. At about 10 times the per capita GDP, the salary of a junior faculty member in an EI doesn't appear too low. In fact, this salary would place our junior faculty members in the top 3 percentile of our population.

One may complain, rightly, that the above metrics are not quite correct. It's the low per capita GDP (and high PPP factor) that lead us to believe that the faculty salary is not too low. In absolute terms, the salary is still abysmal!

Also, one may argue -- and again, rightly -- that the comparison should be not with per capita GDP, but with a peer group of people with similar education and training who are working in other spheres, and in particular, in private industry.

To my knowledge, academics' salaries are generally lower than in industry in every country. If you think of this salary gap (between academy and industry) as the value of academic freedom, this value is huge in our country, and it's growing by leaps and bounds every year. [This perceptive observation comes from Jayant, a good friend and colleague of mine].

Does it mean that EIs should think seriously about enhancing faculty salaries? May be. However, across-the-board salary increases are unlikely due to practical difficulties, which stem from the fact that almost all our EIs are publicly funded. They are autonomous, all right; but public funding imposes certain restrictions. For example:

  • In our government, everyone is placed on a certain rung in an enormous ladder called 'pay scale'. The rungs in this ladder establish equivalence across areas. For example, an assistant professor's pay scale may be equivalent to that of a junior assistant deputy secretary (special duty) in the Central government. In our government, the structure of this pay-scale ladder is so sacrosanct, that only a high-power (but un-empowered) committee called the Pay Commission is allowed to tinker with it. Once every ten years or so. Bottomline: this is not a viable route, if you are thinking about enhanced faculty salaries in EIs.
  • Our government has difficulty in identifying high performers, and in rewarding them through differential pay. In theory, multiple increments in salary are possible, but this motivational instrument is used rarely. The upshot is that all assistant professors end up earning essentially the same salary. This implies that an across-the-board enhancement in faculty salary is not really a great idea, since it would end up 'rewarding' duds as well as the more deserving.

The answer, clearly, is in getting the EIs to move towards a system where incentives are aligned with their overall goals. What might they be?

Many faculty members offer their expertise to industry through consultancy, and earn some extra money. For example, some IIM faculty have been reported to earn, through consultancy, several times their regular salary. This route of rewarding people has its pitfalls, however. First of all, not all fields are consulting-friendly. Also, consulting can only be a small part (typically, less than 20 %) of an academic institution's activities. Yet another problem is that consultancy projects often tend to be routine tasks, require little intellectual input, and don't lead to substantial, publication-worthy research.

Yet another method, practised in the US, is to allow faculty members to earn some money through their research grants. In India, much of the research funding also comes from government, and at present, our funding agencies don't allow a 'salary component' for the recepient of research grants. If at all anyone should clamour for any 'reform', I believe it should be to get our funding agencies to change this rule. This one change also has the virtue of aligning rewards with the EIs' mission.

[Oh, by the way, research grants from private sources -- such as industry, philanthropic trusts -- do allow faculty to earn some salary. This mode of funding, however, is small in our overall research pie.]

Entrepreneurship is another possibility, but we have too little experience with this route. Moreover, I'm not too conversant with the rules of the game here, so I won't say much about it.

* * *

Finally, faculty salaries can be as high as the market would bear in private institutions. The current, intense competition for highly qualified people should have pushed up salary levels in those institutions that require them. Thus, I would guess that the faculty salaries in the Indian School of Business at Hyderabad are considerably higher than those at the IIMs. Is my guess right? If so, does ISB attract better candidates because of this 'salary advantage'? If you have some insights to offer, please leave a comment.

* * *

Are there other initiatives that our EIs can adopt and implement that will make faculty positions more attractive? I do plan to get back to this topic; but since I have rambled on for too long, let me stop here. It should not, however, stop you from giving your ideas ...


  1. Anonymous said...

    yes, i do believe - from hearsay via friends who have accepted jobs at isb and other friends who have declined jobs at iims and decided to stay on in the us - that salaries at isb are substantially greater than that at the iims. but do they attract 'better' candidates? you have me there. what is a 'better' candidate? in my experience, which is limited to business schools and their faculties, very very few good academics go back to india, because indian business schools are all about teaching (read: churning out mbas in the hope of rising in the mba rankings) and precious little about doing research. (i speak as a faculty member in a top business school, who has a close relative who is the director of a major indian business school.) i remember a discussion i had a few years ago with the director of iim-ahmedabad. he wanted to know why i (and people like me) do not return to india. i told him that a major reason is that indian b-schools have no demand, no infrastructure, and no incentives for research. so no one does research. and that makes them far less attractive. his response: "if you come, then someone will do research." that's about the worst sales pitch i've ever heard. anyway, returning to the point, i've noticed that contemporaries of mine who return to india after phds in the west tend to be those who did not manage to get good research jobs there. hence the notion of "better" candidates is really quite subjective. a friend took a class at one of these b-schools, taught coincidentally by someone else i knew. his comment: "he entertained us; what more could we want?" so much for teacher quality.

    this comment is already too long but let me just add that one can impose arbitrary monetary equivalents on quality-of-life paraneters, like you have done, and pretty much defend any salary. but ultimately people do care about money in the bank, for that is what pays bills and supplies college funds for unborn children. also, for every benefit taht is monetized in this manner, one can find some other intangible that arises from living in a foreign country. i know it will be next to impossible for me to return to india as an academic not only because no place in india cares about the kind of research that i do but also because the financial hit will be just too hard to take.

  2. Anonymous said...


    Good post.

    The PPP ratio is closer to 5 rather than 6.

    The second point is that while the salary for junior faculty might be fine, it does nor increase with seniority as much it should.

  3. Anonymous said...

    I have to agree with TR. I can't speak for the IITs, but at least for the IIMs I think the lack of research opportunities is as much, if not more , of a hurdle as remuneration. As someone currently doing a PhD and keen to be part of an international research community, joining an IIM feels just too much like going into exile. And an exile that there's no coming back from - if you go join an IIM as faculty your research productivity is almost certain to fall off, and the chances of your being able to move back to a good US business school (should you want to at some point) without a strong research record are practically nil. Even if the IIMs paid twice or thrice what they pay now, I'd still rather stick with a school here in the US where I can do research and be part of the broader academic community.

    A closely related problem, I think, is that as MBA schools, the IIMs don't really have a strong PhD program. Oh, sure there's the FPM, but that's not really competitive with a US / UK PhD program, in the way that IIM MBAs arguably are competitive with MBAs elsewhere. Which means that when it comes to looking for strong faculty for the IIMs we don't really have an internationally competitive local source. If we really want to fix the problem of faculty crunch, just paying higher salaries is almost certainly not the answer (or not the entire answer) - creating a strong research climate that attracts top researchers and fosters the growth of future faculty is far more critical.

  4. Anonymous said...

    My two cents but with a lot of hesitation. I am only familiar with some elite insitutions (like TIFR, ISI etc.) and I understand that the conditions vary considerably from central institutions and universities to state universities and private institutions. In the institutions I worked, accomodation was provided with a minimal payment and I found that the money was enough. I left because I was footloose. The working conditions , facilities and low teaching were much better than those I have come across abroad. And once in a while one could make some extra money by going abroad. Many of my my colleagues in similar conditions stayed on, educated their children (with many Ph.D's among the children. some of them are abroad and some came back). But I think the situation may be different in state universities. One of the reasons for the difficulties in attracting teachers to elite institutions may be two-body problem and educational facilities for children in some places. It is possible that government schools are not as good as they used to be and many want to send their children to private schools which tend to be expensive.
    Strangely, I think that I did my best work after the age of 55 (that gives you hope) in Australia. It is partly because I did not like it here in the beginning and worked harder than before.

  5. Anonymous said...

    You are absolutely right about the intangible benefits available to faculty of IITs/IIMs. As life becomes more and more hellish outside the campuses, the more attractive a faculty position is.

    I have only visited two of the EIs (IIT-M, IISC) as a visitor - and I know what you are talking about. A guaranteed school for kids within the premises, a large playground, gym, an activities centre with the occasional movie, life is good.

    The key therefore might be to raise the quality of living within the campuses even further.

    Finally a word of warning, the holy grail is not quotas for OBC students, it is quotas for OBC faculty. For single positions such as Chair/Dean, a roster system can be used.

    So it may not be an issue after all.

  6. Anonymous said...

    I don't think the quality of research in Govt. driven EIs will get any better since there is no incentive to work harder and do more research. The EIs have rigid models on seniority and scale of pay and do not take into account the individual abilities etc. Further, there is no "market" for the extraordinarily abled and accomplished researchers as it exists in the USA and hence there is no negotiating plank for the researchers to demand higher pay and/or perks.

    Therefore, in a perverse way, there is no point in increasing the salaries. EIs should simply focus on creating more MBAs and more engineers, which in a way contribute significantly to our economy at this stage. EIs will have to only focus on faculty members who are not too interested in research but interested mainly in teaching and compensate them adequately for this purpose.

    If some faculty members want to do research within the constraints, it is up to them.

    Is there then no hope for cutting edge research in India?

    If enough private research organizations come up in India - funded by corporate and driven by top of the line researchers. Like entrepreneurs going after the VC money to set up private enterprises in India, Indian researchers should look at putting together proposals to corporate houses for building research institutions in India.

    A TIFR or an IISc would not have happened purely with the help of Govt.

    We need more TATA style investment in research institutions in India.

  7. Anonymous said...

    I would like to add a comment, not necessarily related to the precise content
    of Abi's message, but something that comes up all the time in lunch table

    On the one hand, we are always complaining that our salaries are no good,
    and no body cares about us (possibly true to an extent) and so on. So one
    would conclude that only a loser would take up such jobs.

    On the other hand, there are also complaints that people sit in such Institutes
    and do nothing and take home their salaries and live off the fat of the land.

    So I see logical paradoxes all around me in this regard! The resolution of
    this paradox lies in the fact that most of us do know that our jobs are really
    quite nice, not so high salary or not, that we don't really have killing
    responsibilities, have a lot of freedom to choose our own problems to
    work on. We also know, as Abi has pointed out that our living conditions
    really are not so bad compared to what most of our countrymen and countrywomen
    have. All in all, I would not trade this job for anything else.

  8. Anonymous said...

    isn't PPP closer to 12? (an easy way of finding it out is looking at the value of the "international dollar")

  9. Anonymous said...

    I agree with what Falstaff says about lack of research culture at the IIMs and how that acts as a major deterrent. ISB does pay a lot more than IIMs but still has been finding it difficult to attract new faculty.

  10. Abi said...

    First of all, I thank all of you for dropping by and for commenting.

    TR, Falstaff: Didn't realize my post would trigger a strong critique of our IIMs from you both. I sort of figured that the situation there is bad, but I didn't realize it's this bad.

    TR: After seeing your comment, I realized that I didn't make my point well. I have posted a clarification here.

    In any event, the arguments that used PPP and per capita GDP cannot be wished away. Ours is a country with many poor people, and this fact will necessarily be reflected in the salaries of government employees.

    Anant: You pointed out something that I didn't want to say explicitly: there are people who do very little and yet continue to "live of the fat of the land". Under these circumstances, asking for an across-the-board increase in salary is not at all a good idea. I just wanted to point to other mechanisms that might work.

    Badri: You have basically reinforced my view that there is probably not much point in an across-the-board pay increase. We should certainly aim for a differential pay structure that rewards high performers.

    As for private research organizations, all I can say is "dream on!"

    Swarup: This post is only about EIs, and not about state universities (most of which need oxygen first before they can worry about attracting faculty). Thanks for pointing to the two-body problem as a potential cause; while I am not sure of how important it is, it is certainly worth finding out.

    Finally, Anon: if what you say is true, then the entire thesis ("an enhanced pay package would attract more and better talent") falls apart! Say it ain't so, Joe!

  11. Anonymous said...

    this was a very timely and thought-provoking post for me. Thanks. I have a couple questions for you, if you don't mind me asking.

    1) What is the experience of a person joining at the junior level faculty in these EI. i.e, how many years post-phd experience do they come in with?

    2) How many hours of work does an asst. professor put in per week?

    I have no clue how the system in India works, just asking (and making my mental comparisons with the picture here)

  12. Anonymous said...

    I have been working for the past 5 years in US/Canada as a faculty in a global top 50 business school. I can certainly say that the system here is no bed of equal opportunity roses either. If incenting with money is no way to make people more research productive, publish or perish is not an ideal philosophy to stimulate creative research either. Most junior folks here are caught in a web of inconsequential publications to make up numbers for at least the first 10 years of their careers. Of course the stars exist but by their own admission, many are assembly line products from the top schools/advisors rather than ones who devise brilliant solutions to thorny issues through their research.

    Anyway, to come to the point, I think looking at the systemic/structural disincentives to do research is simply passing the buck. I do agree that a well-below comfortable salary looks ridiculous to a north american trained researcher. It really is, no matter how you cut the PPP manipulations. However, I don't think the "if you come, then someone will do research" line is a lousy sales pitch. A conscientious researcher would try to get that line translated to some specific clauses in a contract (read research time, fieldwork support, teaching relief, etc) and be just as well positioned to conduct very interesting research as they assume they do in north america. Ultimately, the business context shapes interestingness to a large extent, and the challenges existent in India are just too interesting. Even if you are engaged in a series of mundane consulting projects, you are bound to stumble upon great research ideas. It is upto the researcher to have the guts/desire to step into publication-worthy research projects and blaming the system for everything is just not good enough.

    Having said all this, I do agree that private schools like ISB stand a better chance of attracting good faculty at the moment. Whether such high-paid, and high-flying folks will sustain the motivation to conduct research over a career is another question, to which I dont know the answer.

  13. Sociologist on the Loose said...

    hi, Thanks for this post. This is an issue I've been thinking about and so it was great to discover this post by accident. Everyone here seems to know each other so let me first give you a basic intro about me. I'm a 4th year Phd student in one of the top 50 univs in the U.S, married, one 20 month old son. Now that the demographics have been conveyed, here is my comment - I think one of the intangible benefits that the PPP and pay doesn't capture is that in India, teaching is a joy and I can't say the same about teaching here in the U.S. I'm teaching an undergrad strategy class this semester (my first teaching experience in the U.S) and this just doesn't give me the feeling of exhilaration and connection with my students that I experienced in India. The problem is that I can't emotionally connect with the students here. I feel like I'm talking to a blank wall. I have no idea what these kids like/dislike/think is funny. Basically no shared collective memory = no emotional connection = total lack of exhilaration. So here is my question - do you think things will get better as I keep teaching or will I always feel so emotionally distant from these students? What has been your experience?

    To come back to the more general question you've raised - I think the inherent joy of teaching just doesn't translate well across cultures and I'd think this is an important consideration for someone considering staying or going back home to India.

  14. Anonymous said...


    It gets easier over time, not necessarily more enjoyable. There are two kinds of Indian faculty in business schools I notice - one that immerses itself in mainstream American business culture and thus achieves the connection with students you are talking about; and the other that remains rooted to ongoing Indian business news and never really develops an intimate connection with American business. If you are the second kind, you'll never be able to strike a chord with the kids here and have teaching be memorable.

    I haven't taught in India, so I cannot speak to the "exhilaration" you describe.

  15. Anonymous said...

    Why don't you see clearly the difference that a student graduating from IITs often earn more than the faculty at IIT.

    You are right about the good campus living. But what about the living in US or Europe. You can easily find much better place than IIT campus everywhere. In IIT you always have to live in an apartment. But in all faculties have spacious houses. Why would they join IIT. If we really want to improve the quality of IITs, there is need to recruit to people who graduate with PhD from top universities in the world. The student in US can save more than Rs. 25000 per month. Why would they come to India to earn less their savings during their student life.

  16. Anonymous said...

    Wow...Im amazed at the analysis of PPP, GDP which I consider bullshit. Typical of you academics who live in Campus jungle spending most of your time away from reality. My comparision is with my peer groups and how I see them. Well, may I ask, Practically and Logicially, Is it fair on the part of IEs to produce excellent resource for the Industry while their mentors get paid unattractively ?

    Go ask your students in IEs how many of them want to get into Academics. Less than two percent will raise their hands.Ask them why my dear friends.

    You expect an academically brilliant guy/gal spending 3+ years of their precious Earning time to spend on getting PhD and working for peanuts? "If you pay peanuts you only get monkeys."

    Even when you do PhD how much do these IEs offer as stipend? A mere 10,000/ whereas their counterparts in Industry get over 10times before they complete their PhDs.


    Before giving me the PPP bullshit try convincing your kid to go for a cheap mobile phone/bicycle instead of motorbike/desktop instead of laptop/Plastic toys instead of PlayStation.Then you will realise whats the value of money in India.

    Gone are the days when you do ur masters,PhD, job, Marriage, Bike, kid,Car ,finally house and retirement (In that order).Nowadays, kids graduating from IITs buy a House and Car within their first two years. By the time you finish your PhD their property would be worth in Crores.


  17. eatmyundy said...

    I would agree with the main article about changing the rules of funding agencies as a possible solution of part of a solution. One thing which must worry most people when deciding go back to India is the amount of funding available for traveling abroad for conferences and collaborations. I believe that is not much, but correct me if I am wrong.

  18. Anonymous said...

    @Anonymous 2 posts above: couldnt agree with you more.. i am myself an iitian and feel that unless u increase the pay of the academic community, research in india will continue to suffer.. As in, my professors in iit are amongst the best in the world(i have been to other univs in the world) and i cant seem to figure out their motivation for staying in india where they arent paid much...

  19. Anonymous said...

    "i cant seem to figure out their motivation for staying in india where they arent paid much"

    Most IIT/IISc faculty have no way of getting tenure in US universities even if they a job there in the first place.

  20. Sanket Kakkad said...

    Another NRI who accidentally came across this post. Being NRI and a teacher are the only commonalities that exist between me and people who have posted here.

    I am surprised to see how monetary benefits and a so-called 'organised' NRI lifestyle seem to have blinded so many who have posted here.

    Any one who has made these points keeping in mind their own personal motives - is justified. But aren't you guys (presumingly looking to do some research!) ultimately contributing towards the betterment of a country?!! If that is the primary motive, working towards it and in the process fighting salary issues and hence the system, should satisfy your mind of working towards that goal. Yes, you may not end up researching on subjects you always aspired for, but your primary motive has been fulfilled.

    Easier said than done, but can we please make an attempt to do it rather than discouraging aspiring repatriates through such time-killing analysis, no matter how much logical and precise the analysis may sound?!!

  21. Anonymous said...

    I just find it a very crappy and cliched post telling you to add up your housing and kids education options and so on. If you have money you can "chose" your options... that is what if I dont want my kids to go to that on campus school, or what if I want to live in the city and not on campus? These arguments are very defensive arguments, and cannot really hide the fact that faculty salaries are indeed quite low in india and I fukcing hate it. I want to come back to India and be a faculty but I just can't when I will see joker-faculty around me making more than I do and where I clearly I should be getting paid more since I work harder, bring more reputation to the institute and contribute more to the global international picture of the institute... I of course want to be paid for what I am worth.. and that is what is preventing me from going there. As someone said, I want to see how I look when I stand with my peers!! I love exploring the beauty of my ideas, but do I have to lose so much in terms of money!! Well I don't really think so my dear. You want me a faculty at your place, show me where the money is. As simple as that. Look at any US universities trying to hire a good faculty: salary sees amazing swings, they get paid for their excellent work when they do it, and so on. India is just not like that; no one gives a shit to how well you have been doing in your research and reward it. On its face, there is no difference between you and the lazy-ass across the corner who does nothing but sit in his chair, enjoy the sunshine, and fart after the tasty lunch. Do you really want to be seen someone like that? I mean, sure you'd like to pursue your research and freedom and all that, but the compromise is just too much; and your post is sort of a failed attempt of pulling a curtain on that.

    I am speaking from lots experience, personal feelings, and frustration. And no, I am not going to quit research for money, but I am not going to a place where I am not valued for what I do.

  22. Anonymous said...

    Abi: I am a faculty at a B-school abroad, who is willing to come back to India.... But cannot given the pathetic faculty salaries (other than at some new private schools such as ISB).
    Your post makes no sense to me whatsoever. I am not a yogi, I am a regular individual with hungry mouths to feed at home. BTW, I went to IIM for my MBA, and see all my friends earning at least 10 times the salary of IIM faculty.
    Please do not obscure the real and important issue of pathetic faculty pay in India by writing such nonsense on your blog. It is a great disservice to 1) the extant faculty who are impoverished and expected to work selflessly like saints, 2) those who plan to do a phd, 3) the students who have to cope up with poorly compensated teachers who have little incentive to do their jobs, and 4) the greater society in India, which can be potentially be induced, through your nonsensical verbiage, to beleive that faculty job does not deserve to be well paid.