How Much Is Too Much?
After spending over 30 years in human resource management, formerly called personnel administration, you might think that I would know something about wage and salary administration. And I guess, in a way, I do but recent events involving salaries for coaches in college athletics causes me to question my level of knowledge in this field of endeavor.
I guess what caused me to question my level of expertise were the fairly recent announcements of salaries for several college football coaches that exceed $2 million per year. I believe Steve Spurrier was the first one and you just knew that once this figure was paid to anyone, others would surely follow. The next one I heard of was Bobby Bowden because you know the Florida State administration and fans were not going to let the Florida coach be paid more than their head man. Bobby owes Steve a debt of gratitude because there is probably no way that Coach Bowden would have gotten the 2 Million except to match Spurrier's. The third one was Bob Stoops at Oklahoma when Florida went hunting for a new coach. It has been rumored that Phil Fulmer at Tennessee gets in excess of 2 million but there has been little publicity given to Fulmer's salary.
Which brings us to an important point. Can we believe what we read about coaches' salaries? For state schools, this information is supposed to be available under various Freedom of Information Laws and in all of the cases cited above, state schools are involved. But getting this information is another thing and understanding it after you get it is even another separate matter. I tried to get a copy of the UNC Athletics Department budget last year and it got so complicated that I finally gave up. I was asked why I wanted the budget while the North Carolina FOI law clearly states that the reason for the request does not have to be divulged. I had a friend of mine who resides in N.C. make the request because I knew from previous experience that the information requested does not have to be provided to persons residing outside the state involved. Finally, the Athletics Department verbally provided the total figure amount of the Athletics Department budget but this was hardly what I was interested in securing. The total figure has been published many times and does nothing to tell you where the money goes or the sources and amounts of income. It finally reached the point where I knew I was going to have to go to court to get the information so I decided to drop the matter. Life is too short for me to battle my alma mater in a court room even though it's possible I could have been rendering the University a service. Things would never have been the same between me and UNC had we gone to court and I decided to back off. Incidentally, I was told by one of North Carolina's most prominent attorneys that I was entitled to the information I had requested but he is a Wake Forest grad and possibly just wanted to see the fight. :-)
Back to the salary question. Just exactly how does an organization go about determining how much they pay their employees? Most sizeable organizations have wage and salary administration sections in their human resources department and determine salary levels and ranges after evaluating the duties and responsibilities involved. Number of employees supervised and consequence of error are two examples of job elements that are used to determine salary levels. Salary surveys of other organizations with similar jobs are often used to determine salary levels.
Now all this works pretty well until something happens like the Steve Spurrier situation. It was fairly common knowledge that SS aspired to be an NFL coach some day. University of Florida officials cringed at the conclusion of every football season because each year there are NFL teams who are seeking new head coaches. In an attempt to retain Spurrier, they made the position at Florida more attractive by increasing the salary to 2 million even though it still doesn't reach the levels of top NFL salaries. Perks offered college coaches and other administrative personnel oftentimes make the job much more attractive financially than would appear based on salary alone. Frequently, there is free tuition for coaches' children which could be significant for a coach with a large family at a private institution like Stanford or Duke. When Pepper Rogers was terminated at Georgia Tech several years ago, he took his compensation case to court and the court ruled that such things as free laundry and dry cleaning, clothing discounts, use of automobiles, tickets etc. were a part of compensation and were a legitimate part of Rogers' claim against Ga. Tech.
Another consideration is the relatively new factor of shoe contracts. This is handled differently at each school and the degree of impact varies according to the market attractiveness of the school and the sport involved. Basketball shoe contracts at premiere basketball schools like Carolina are the most lucrative. Shoe contracts are a part of total compensation and internal budgets can be modified in many ways to accommodate them so that the net result is a financial savings for the institution. The more the shoe contract pays, the less the university has to pay. sounds like a good deal for everybody but there is always the danger that income from outside sources not normally allied with the University will create accountability problems.
There is also the question of competition with similar organizations at the same level ( college coaching versus professional ) and what constitutes ethical behavior within these confines. I remember vividly when I was at Duke, another fine Medical Center offered our entire staff of nurse-anesthetists jobs at salaries considerably above what we were paying at Duke. If our staff had left in force it would have been a disaster. It would have had a dramatic impact on the number of operations that could be performed at Duke and there would have been a ripple effect throughout the Medical Center. I sent word to this medical center through a third party that two could play the game and if they took our entire nurse anesthetist staff by offering them much higher salaries, they should expect there to be some sort of response from us that could negatively impact them. The matter faded away and I will never know if my message caused parties at the other medical center to rethink their strategy or not.
So, where does this leave us when it comes to deciding what salaries should be paid college coaches? I'll tell you where it leaves us. If a school makes the decision they want to hire or retain a particular coach for whatever the reasons and have sufficient financial resources, the salary paid will be what is required to engage the services of the individual involved. Not very scientific is it and the worst part of it is that 90% of the Athletics Departments at colleges and universities operate in the red. Carolina is one of the 10% that operates in the black but last year was a close call. At one time, we were on course to end the year in the red, but things improved near the end and we wound up approximately $200,000 in the black. Keep in mind, booster groups are prohibited by the NCAA from contributing financially to the normal operations of their school's athletics departments. So that rules the Ed. F. out. Who will pay if we do wind up in the red?
Are you starting to see a little better now why I was interested in taking a closer look at the UNC Athletics Department budget?