Regain Trust at UNC
The Denver Post
December 12, 2004

Years ago, I served five years as a trustee of the University of Northern Colorado. It was a terrible time because of severe budget problems, declining enrollments, and staff reductions. We had to cut programs and fire tenured faculty, who then sued us for breach of contract. Students as well as professors were outraged, even though we went through what we believed was a very thorough and careful evaluation of the University, its mission, and its needs before making the draconian decisions our financial difficulties forced on us.

No one received bonuses at that time, nor were any even considered. It would have been not just folly at a time when others were being asked to sacrifice for the good of the institution, but morally wrong to benefit while others lost their jobs. UNC is going through another wrenching budget crisis right now, having lost a quarter of its state funding. But, the Administration hasn't followed the earlier path of sharing the pain.

After asking faculty to give up pay increases for the last two years and to teach more and larger classes, UNC's top administrators paid themselves significant cash bonuses. They say these bonuses came from "support" funds, not "instructional" monies. They add that the bonuses were granted for reaching goals laid out in their employment contracts. Those are distinctions that just don't cut it. It reminds me of the mess former American Airlines Chairman Donald Carty got himself into when he had just wrenched huge pay cuts from his employees, but paid himself and senior managers multi-million dollar bonuses at the same time. Carty was ousted a short time later as infuriated employees howled in protest.

No doubt, the American Airlines executives also had contracts that provided for large bonuses if they met their goals. That is completely beside the point. When you lead an organization in trouble and ask for sacrifices from lower level, and lower paid, employees, you must lead by example. That means sharing the pay cuts or poorer working conditions or whatever you ask of your employees. It takes minimal common sense to realize that.

Besides common sense, there is a moral issue here. When you are a leader, you need to show the highest ethical standards. In this case, not only does that mean sharing the financial pain you're inflicting on your employees, but it also means being completely open with everyone in the organization about the problems you are facing and dealing fairly with all those who work under you, no matter what their pay grade. While paying bonuses to top administrators under these conditions is just plain dumb, it is also a betrayal when information about it is withheld from employees.

I know UNC President Kay Norton is a smart, competent, caring administrator. But she lost her way here. Likewise, Donald Carty was no doubt doing what was required to save American Airlines. But he left his political savvy behind just as Kay Norton did and, as a result, succumbed to the fury of American's employees, who could have put the carrier under by striking or defying work rules.

At UNC, as at American Airlines, it will take every employee to ensure a turnaround. Professors who believe they sacrificed for the good of the school and now feel betrayed by the administration's self-dealing will undercut any plans to revitalize the University. Students who suffer from an inferior education will go elsewhere, further eroding the health of the institution.

If I were President Norton, I would immediately rescind those bonuses to the top few at UNC. But, I doubt that that will be enough. It didn't work for Don Carty and it may not work for Kay Norton. She will need to reach out fully and honestly to the faculty, staff, and students, bringing them into planning and budgeting decisions. I used to tell my kids that it takes years to build trust, but only moments to lose it. UNC administrators will need both time and luck to rebuild trust if they can do it at all.