Shows the economic impact of employing various managerial processes at an academic institution

1. Running Head: THE ECONOMIC IMPACT AT HILLSBOROUGH COMMUNITY COLLEGE
The Economic Impact at Hillsborough Community College
Name:
Institution Affiliation:

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Company Description
Hillsborough Community College is a public academic institution that offers business
and other studies on both self- and sponsor-based academic packages. The college provides on-and
off-campus residence for students that do not live around its location. The current student
population is 28,329 students and offers in- and out-state tuitions of $1,931 and $7,728
respectively. Under the semi-sponsored, translatable to assisted academic sponsorship, the
institution offers up to 82% financial student aid. On performance, the institution’s graduation
rate is low as only 68% of students graduate within the normal time. The offered programs
within the institution include 99 academic programs and 5 athletic programs. Other details about
Hillsborough Community College include semester calendar system, 2-year degree courses,
offers only undergraduate programs, and the institution size category is 20,000 and more
(FindTheBest, 2014).
With reference to organizational structure, the institution is centralized and institution
wide decisions are made by the executive management that include the president of the
institution. As a large institution, the centralized organizational structure does no normally work
due to slow decision-making process. On the up side, centralized organizational structure
benefits small businesses but does not favor large organizations. Although setting objectives and
thriving towards the achievement of goals is a beneficial factor for centralized organizational
structures, it is overly excruciating that poor decisions in management are a common place. From
the executive management to the frontline faculty members, the centralized organizational
structure of HCC generate a variety of layered bureaucracy issues such as sluggish operations.
Following the centralized management, a variety of issues, among them unbalanced
compensation and low faculty member motivation, the institutions viability as a reliable

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academic entity falls short of meeting the community expectations especially taking into account
the low graduation rates (Faculty United Service Association, 2010).
Agency Problems
HCC suffers from one primary agency problem that generates a continuum of secondary
problems that prevent the institution from being a reliable academic institution to both the faculty
members and the community of students it serves. Drawing from the management structure, the
centralized approach has placed decision-making power to the executive management has
created income gaps between management and faculty members which is sprawling out of
control in keeping faculty members motivated to accomplish their duties. The poor performance
in graduation is a secondary repercussion from undercompensated staff members whose delivery
of service resembles the poor health of their income checks (Johnston, 2013). Additionally, the
income distribution gap between management and the faculty member is such pronounced that
the services rendered and the compensation offered do not assimilate the institution’s objectives
and mission statement (Brickley, Smith, & Zimmerman, 2009).
The primary issue facing HCC is that faculty members and management, specifically the
president, are comparatively compensated on the extreme opposite margins of highest and lowest
rates. The first secondary problem associated with the compensatory crisis are developed on the
Herzberg’s two-factor theory where employees’ hygiene-motivation factors do not sync with the
vision of the institution (Amstel, 2008). Adding to the secondary problem of hygiene-motivation
non-synchrony is the factor of staff dedication and overall performance of the institution. Faculty
members are receiving 2 to 3 percent pay raises while presidents receive lump sum amounts on
top of the base pay. The earnings of the faculty members continue to weaken through the lump

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sum compensation approach. Due to lack of synchrony between motivational factors and
responsibilities, staff members do not dedicate enough efforts in providing quality service. Value
and quality with regards to academic service and compensation have developed a performance
issue in that up to 32% of students graduate after 3 years in place of the standard 2 year-graduation
periods. The association of student performance and faculty members’ compensation
is backed by the under motivation effect on service delivery.
Job Dimension of the Firm
HCC management structure provides numerous job dimensions at the executive or upper
management level. The centralized management structure provides 20 management positions
within HCC. The college president is tasked with the duties of managing the institution from a
strategic position. Within the president’s office are staff and executive assistants. Under the
president is also the college attorney that reports directly to the president. However, the college
attorney has an independent office. Other additional management positions include executive
staff assistance, campus president director manager, president Yb, and vice president of
workforce in charge of training. The campus president overlooks the tasks entrusted to his
assistants and various senior managers. On the management schema, the management
department does not indicate the presence of a decision making committee which insinuates that
the president assumes decision-making responsibilities with no external consultation aid
(HCCFL, 2014).
On to the frontline level of faculty members, there are two major divisions that share the
responsibilities of education and mentorship to the students. Faculty members comprise of
instructors whose duties include tutoring, planning and presenting academic semester activities,

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provision of course work materials, setting of tests and grading of the same. This set of members
is not tasked with any form of decision-making responsibilities. Faculty members absorb
instructions related to the decisions made from the executive, supervisory, or senior
management. Additionally, a division named HOPE provides guided counsel to students with the
aim of reducing student turnover rates. Mentorship programs aimed at ensuring that students are
engaged academically both within the institution and outside the academic environment. The
HOPE division is also off the decision-making set of departments and reports to the higher
management as the faculty members at the frontline level.
Suggestions on Job Designs
In terms of the job design and management structure, two problems are profound and
contribute immensely on to the loss of value of service as well as the performance of HCC. The
centralized management structure is problematic in that the decisions made by the executive
management are affective of the entire institutions’ education fraternity. The power sharing on
the other hand, provide additional management problems in that the decisions and their
corresponding repercussions indicate a case of authoritarian management style. The allocation of
higher compensation and the disbursement of lump sum amounts to the executive is a decision
that is single-sided and aims to benefit the executive. On the other hand, the income distribution
approach continues to weaken as more funds are allocated to serve executive branch at the cost
of the frontline faculty members. With the application of the opportunity cost concept, it shows
that the faculty member’s job wellbeing is sacrificed for the sake of the executive’s lucrative
salaries.

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As a recommendation, the use of the incremental concept of managerial economics can
fix the decision-making processes as well as the associated outcomes. Thus, as directed by the
incremental concept, decisions made by the executive can be reconfigured such that they
increase output while maintaining costs. However, for this management change to be effective,
the one-man decision-making regime has to change to decentralized organizational structure.
Organizational decentralization involves the making of decisions from a board’s perspective.
This structure of management is effective in making sound decisions backed up by organization
wide considerations on management and frontline employee welfare – balances decision effects
and controls affects. Additionally, the long term effects of centralized management structure in
HCC is the lack of sensitivity to the concept of time prospective. As a solution to the
management- inspired institution’s poor performance, the appreciation of time prospective
concept can offset effects of poor decisions.
Compensation Packages
The compensation packages between employees and management differ
remarkably. Pointing this out from a state wide analysis, it is reported (Fineout, 2013) that
outgoing college presidents receive as much as $1.2 million on severance package. With relation
to a state-wide information on salary packages, 12 college presidents within the Florida state are
compensated over $10 million within a fiscal year covering basic pay without benefits. Specific
figures show that college presidents such as the North Florida State College receives more
$144,000 to more than $630,000 for Miami-Dade College. It is against the state laws for college
presidents to earn more than $225,000 provided the earnings are from the taxpayers’ federal
reserves. On a more HCC-specific case, it is indicated with the HCC’s salary schedule that the

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president, as of June 25, 2014 is set independently and does not feature the same income
calculations subjected to the rest of the stakeholder besides college attorney. The minimum and
maximum pay for staff members and administrator is $17,303.77 to $89,821.25 considering
grade E and L respectively and $58,596.30 to $169,511.48 considering levels ADM07 and
ADM02 respectively (Johnston, 2013).
With the consideration of basic pay per hour for a grade L staff member being $9.63 and
that of grade E being almost five times as much at $45.8857; it is conclusive that the
compensation packages even within the same level features destructive financial gaps that affects
performance and employee engagement straight right from the frontline level. On the other hand,
the executive/administrator compensation indicates a difference of over $76 in hourly pay
between the least paid grade E employee and the highly paid level ADM02 administrator. The
two compensation packages, regardless of whether they are qualification and responsibility-sensitive
probe major motivation on the frontline grade E staff.
Effectiveness of Compensation Package
The compensation packages of the faculty members and the management staff at HCC is
a total failure of administrative planning. According to the equi-marginal concept, an
organization does not need to incur more costs over a decision it makes (Dhaqaalaha, 2011). As a
recommendation, it is effectively probable for the institution to be more successful in terms of
performance if management and faculty members’ packages were balanced within the equi-marginal
concept such that management receives much lower compensation packages in favor of
a upscaling the faculty member’s pay (Hartman, 2009). Additionally, based on the current and
the future values of an organization, the discount concept can be incorporated in the

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compensation packages such that the management trades its high compensation rates based on
the opportunity cost theory in favor of creating value by raising the compensation for faculty
members in support of the now-value of their efforts rather than effecting compensation changes
when inflation demands pay adjustments. If the faculty members were provided with salary
increments from the executive packages, the employees would benefit from the discount concept
while their performance levels would increase by motivating employees and considering
executive management’s salary cuts as the opportunity cost in upgrading performance.

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References
Amstel, D. (2008). Applicability of Herzberg's Motivation-hygiene Theory to War-zone Security
Contractors. ProQuest.
Brickley, J., Smith, C., & Zimmerman, J. (2009). Managerial economics and organizational
architecture (5th ed.). New York: McGraw Hill/Irwin. ISBN: 978-0-07-337582-3.
Dhaqaalaha. (2011). The Fundamental economic concepts. Accessed online on October 1, 2014
from dhaqaalaha.com
Faculty United Service Association. (2010). Hillsborough Community College. Faculty United
Service Association
FindTheBest. (2014). Hillsborough Community College. Accessed online on October 1, 2014
from http://colleges.findthebest.com/l/868/Hillsborough-Community-College
Fineout, G. (2013). Florida college presidents given expensive perks. Accessed online on
October 1, 2014 from http://staugustine.com/news/florida-news/2013-05-13/florida-college-
presidents- given-expensive-perks#.VCDF4e8tCUl
Hartman, B. (2009). Economics. McGraw-Hill
HCCFL. (2014). College Presidents as of 08/072014. Accessed online from
http://content.hccfl.edu//dao/hr/org/pdfchart.pdf
Johnston, C. (2013). Hillsborough Community College faculty, administration at odds over pay.
Accessed online on October 1, 2014 from
http://www.tampabay.com/news/education/college/hillsborough-community-college-faculty-
administration-at-odds-over-pay/2156139