The Campus Compensation Conundrum

The latest edition of the Review includes an opinion piece by Matt Sprague about what he sees as the need for reform in the way compensation is provided for student staff. In particular, he articulates his central thesis in this way:

Ultimately, the goal of any compensation scheme should be to reward employees in a reasonable and competitive way for the work they perform.  This is the standard to which student staff salaries should be held.

It’s a statement that deserves consideration, especially if we think more broadly about the way we compensate people in today’s society. Given the earlier discussion about executive compensation earlier and the more recent anger specifically about bonuses paid to bankers, it’s clear that the ways in which we compensate people and the reasons that we do so are important.

Why do we compensate people? Compensation serves one primary function: to motivate participation or work. However, this has two separate parts: compensation serves to both get people to do something and to reward people for the work they do. It is here that Sprague captures only one side of the equation, at least as regards monetary compensation. In arguing that RAs and Row Manager compensation should be changed, Sprague argues that the row managers at co-ops and freshmen RAs are currently insufficiently rewarded, as they do more work and receive either less pay or the same pay as other RAs. This seems reasonable, so why do I have concerns?

First, there seems to be no shortage of RA candidates; even strong candidates are routinely rejected. I think that in looking at the RA position, in particular that of freshmen RAs, it’s clear that it’s not about the money; instead, it’s much more about making a valuable impact on the lives of one’s residents. What better time to do that than freshman year? Freshman RAs are compensated through the bonds that they build with their residents and through the experience that they gain; it’s clear that even if salaries were doubled for them, they would still be relatively poorly compensated. Furthermore, as compensation rises, the risk of inviting people who are “in it for the money” rises. I agree that it would be wonderful to have the work of great RAs rewarded (which is why I support the idea of a bonus like that outlined by Sprague), but I’d avoid an across-the-board increase.

For co-ops, this disparity once again plays a key role in the self-selection of who wants to row manage. Living in a co-op is a distinctly unique experience; I think that the row manager there should embrace the unique life style there rather than resent it. Increasing the pay for that position would once again run the risk of attracting people who’d like to take home a few thousand on top of room and board. Perhaps living in a co-op is such a different experience that it would not have this problem, but it would be very concerning to me if co-op staff began divorcing themselves from the co-op lifestyle in any way.

Basically, a fundamental truth about compensation is that it not only rewards the people to whom it goes, but it also attracts different people. I’d prefer to have my freshman RAs attracted by a sense of devotion to Stanford and a desire to improve the freshman experience rather than money. I’d prefer to have co-op staff attracted by a desire to serve their cooperative community rather than money as well. It’s tough to offer bigger rewards without losing these social benefits.

The bonus idea (or at least the partial pay based on reviews idea) proposed by Sprague may offer a limited way to overcome this issue, but we can’t ignore it altogether. Compensation doesn’t just enhance incentives; it can skew them too.

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