GENERAL INFORMATION ABOUT THE ACADEMIC MARKET FOR FINANCE Ph.D. STUDENTS

GENERAL INFORMATION ABOUT THE ACADEMIC MARKET FOR FINANCE Ph.D STUDENTS Here is some information about the academic market This information comes from various faculty members The comments here are generalizations, and will not necessarily apply to every situation SETTING A GOAL Students who pursue a Ph.D must consider whether the Ph.D will satisfy their career goal The typical goal of finance Ph.D students at FAU is to become a faculty member at a university that has a reasonable balance of teaching and research The program is designed to provide the background and skills for this purpose People who want a much heavier weight on academic research (such as being a researcher at Stanford) should select a Ph.D program (such as University of Chicago or MIT) that trains them for that purpose People who want to work on Wall Street or in various businesses should first determine whether they need a Ph.D for that purpose In many cases, spending years beyond a master’s degree to pursue a Ph.D might not be necessary to achieve those goals There are some Wall Street jobs that require a Ph.D but many of these jobs are weighted heavily toward quantitative research (such as designing new derivatives products), and FAU’s Ph.D program is not focused on this type of training FAU’s finance Ph.D program is full-time and should be considered only by people who would be able to commit four years full-time to the program FAU does not have a shortcut finance program for people who are seeking a quick Ph.D There are many programs that advertise online “get your Ph.D within year or less” or “credit for lifetime experience” etc that may be more appropriate for people who want to obtain a Ph.D quickly and without adjusting their work schedule or life style However, anyone pursuing degrees from those programs is advised to obtain information about whether that degree will enable them to achieve their career goals In general, it is more difficult for people with a Ph.D from shortcut programs to obtain a faculty position at an accredited university Some people consider pursuing a Ph.D even though they have no plans to pursue a career once they attain the degree For example, they may have already been successful in the business world, and want a Ph.D just because they have an interest in finance However, the Ph.D program trains students to academic research People who have a natural curiosity about finance but not plan to use the degree for university teaching may be better off learning finance on their own Academic research is quite different from practical finance literature, because it is more technical and involves lengthy processes for conducting research People who think they want to pursue a Ph.D just for fun should read some articles in academic finance journals such as Journal of Financial Economics, Journal of Finance, and Journal of Financial Research and should ask themselves whether they would have a consistent interest in learning and doing this type of research over a four-year period in which they would be in a Ph.D program GENERAL JOB MARKET CONDITIONS The academic job market in finance represents the interaction between the finance departments at universities that have open positions, and the finance Ph.D candidates that are working on their dissertation and are seeking a position The demand and supply conditions have been more favorable for finance Ph.D candidates than for Ph.D students in most other areas of concentration throughout the university In many years, the number of jobs available for finance faculty members exceeds the number of Ph.D students who are in the job market Academic job market conditions are influenced by the economy, because state universities rely on state funding when they hire faculty, and states typically have more funds to spend when the economy is strong When a finance department has an opening for a faculty position, it may receive more than 100 resumes If there are 100 job openings and 100 candidates, all the candidates may ultimately find a position, but not necessarily in their most desired state or the region of the U.S Even though you may have some preferences about a region of the U.S where you might be hired as a faculty member, keep an open mind so that you reduce your chances of being disappointed SALARIES The salaries offered for faculty positions in finance are high They are generally higher than salaries offered for faculty positions in most other areas of concentration in a university The mean salary level for new faculty positions in finance can increase or decrease from one year to the next, depending on changes in the open positions and the supply of candidates in the job market It is natural to be curious about salary levels in the job market However, be careful when interpreting the information that you receive There is substantial variation among salaries offered by finance departments, and news about the unusually high salary offers tend to receive more attention than the other salary offers, which creates a general upward bias in the perception of salaries For example, a person who takes a faculty position at Stanford or MIT in finance may earn an unusually high salary, but that salary is not representative of the market At the other extreme, a person who takes a faculty position at a very small college that is completely focused on teaching may earn a lower salary than the norm in the job market Most students who complete their Ph.D in finance at FAU are hired for faculty positions at regional universities (numerous examples are listed on the course web site), which offer salaries in between these two extreme examples described above Do not overestimate the general market salary, so that you will not be disappointed In fact, if you maintain conservative expectations, you may be pleasantly surprised at the salary offer you receive once you are in the job market You may hear some general information about existing salary offers from other finance Ph.D students at FAU who are presently in the job market Keep in mind that the salaries offered to FAU finance Ph.D candidates have varied substantially in a given year, as some FAU finance Ph.D candidates have been more marketable than others Hopefully, the information provided here will help you to be more marketable You have control over some of the factors that affect your marketability FINANCE DEPARTMENT HIRING PROCESS The hiring process by a finance department is often more involved than the process used in industry, as explained here If you understand how a finance department screens its applicants, you may be able to build a resume that will make you more marketable when you enter the job market First, it is important to realize that most graduates of Ph.D programs take jobs at other universities This normally means that they will need to relocate Some graduates attempt to attain faculty positions at universities in the south Florida area This happens occasionally However, these universities not have job openings every year In addition, they prefer to hire faculty members with diverse backgrounds in terms of their training, so they may avoid loading up on FAU faculty POSTING A JOB POSITION OPENING A department may pursue a candidate who is just completing the Ph.D for an assistant professor position, or an experienced candidate who is at the associate professor or professor level Some departments may consider candidates who are at any one of those three levels Job Description The department specifies the general duties required such as the particular courses that the person hired would teach The job description may also specify that research is required A research-oriented university may specify that the job requires substantial research and publication of research Conversely, a university that has very little research requirements may specify a high teaching load within the job description Some universities fall in between these two extremes, and may specify a balanced blend of teaching, research, and service The job description is a means by which the department can indicate it is pursuing a candidate to serve as a major researcher, or to primarily teach courses SCREENING PROCESS When a university receives resumes for its open position, it will attempt to screen the applicant pool down to about 10 or 20 applicants It screens the resumes based on the job description of the open position Some of the more common criteria are identified here for finance departments In general, a finance department would like to hire a candidate that will an excellent job in teaching, research, and service, without the need to be pushed in order to their job Teaching Background or Preferences The teaching ability of candidates may be measured by their educational background and teaching experience Thus, a finance department may assess a resume to determine whether the candidate has had special course work or performed research on the main topics covered by the course Some candidates may also have real-world experience that can be useful in the classroom, especially when there is a need to apply theory to practice Candidates with teaching experience are desirable because they already have invested the time to create course preparations In addition, they have teaching evaluations by their students, and grades that they assigned to their students This information indicates their performance (from the perspective of students) along with their grading standards and level of rigor Another important characteristic is a candidate’s willingness to teach a variety of courses Some finance departments may need a faculty member who can teach two or three different courses in a given semester Research Potential A candidate’s pedigree serves as an indicator of their research potential In the field of finance, graduates of high-powered research universities are perceived to have more research potential than graduates of other universities, and rightfully so They likely had more exposure to research than most other candidates, and may be the best qualified for faculty positions that have a very heavy weight toward research However, in most years, less than 10 percent of the open finance faculty positions available are at universities that require a very heavy weight toward research If a person wants to pursue a high powered research job in finance at a university such as Stanford or University of Chicago, they would need to (1) have the credentials to get in a graduate program at a top tier research university, (2) get through that PhD program Most finance departments (even those that emphasize teaching) seek candidates who are capable of doing some research Important indicators of research potential include any papers that you had published or accepted for publication in journals, or working papers In addition, your participation at conferences on research papers (such as presentation of papers, discussion of papers) may serve as an indicator One of the most important indicators is the candidate’s discipline Some candidates tend to achieve their work goals in a timely manner, while others are more talk than action Finance departments attempt to pursue candidates who have the discipline to complete their research ideas and not have to be pushed to perform their research obligations When PhD students submit working papers to journals while they are in their PhD program, this may signal that they are organized and disciplined and will be able to meet research obligations when they take a faculty position (as they will have more time to focus on research then) Candidates who are less organized and disciplined may be less likely to complete their research obligations, regardless of their intelligence Collegiality Departments hope to hire someone who demonstrates collegiality The term collegiality is defined here as a willingness to work with others within a department, or throughout the university Here are some examples of collegiality: *working on research with others, *being willing to offer research advice to colleagues even when you are not a co-author, *sharing your teaching ideas with other colleagues who have an interest, and *volunteering for committee assignments, even when you are not assigned to them In general, collegiality means that you are a team player, and serve the department or university, even when your efforts are not directly beneficial to yourself Some faculty members their assigned tasks and volunteer to cover some other services (such as advising) when needed While some people are very collegial and make great team players, there are other people who can cause friction within a department First, they not cover their share of responsibilities within the department Second, they take credit for work performed by others Third, they attempt to turn one or more colleagues against others Fourth, they complain constantly that they have been given less resources and compensation than everyone else Fifth, rather than attempt to boost their own productivity, they criticize the productivity of others That is, they attempt to reach the top by pulling everyone else below them A single non-collegial person can destroy the morale of a department Thus, departments attempt to avoid hiring candidates who lack collegiality During the time you are in a PhD program, you will have many opportunities to demonstrate your collegiality In general, your treatment of fellow PhD students during your PhD program may serve as an indicator of how you would treat fellow faculty members once you are a faculty member Initiative Finance departments also seek candidates who have initiative For example, they may want to hire a person who takes the initiative to some tasks (such as advising students) that may be part of the job even if these tasks are not officially listed in their job description In addition, they may want to hire a person who takes the initiative to their job (and it well) without being monitored This is a very important factor, perhaps more important than many Ph.D students realize From the department’s perspective, it pays faculty members a decent salary, and expects that its faculty members will perform their duties without being constantly monitored By the time Ph.D students are in the job market, they would have had many chances to demonstrate their initiative (or lack of it), including their willingness or ability to: *attend all classes (and on time), *complete assignments on time, *initiate their research ideas, *learn unusual computer or other skills on their own, *cover all of their responsibilities without having to be prompted Dissertation Topic and Status A finance department commonly screens resumes in the fall and spring semesters for a position that will begin in the following fall semester Thus, many candidates who expect to complete their Ph.D by the following fall semester have not yet completed their dissertation when they submit their resumes The status of the dissertation is critical The status should indicate whether the candidate has officially completed the dissertation, and if not, how much work still needs to be done Your dissertation progress will likely influence the number of interviews you have at finance conferences or on campuses There are cases in which the candidates are not finished with their dissertation when they take a job They often have difficulty in doing their job duties while trying to complete their dissertation Departments want to hire someone who has completed their dissertation and can focus completely on the job that they were hired to Consequently, departments may screen out candidates who appear to have much work remaining on their dissertation EXAMPLE OF THE SCREENING PROCESS Consider the following example in which a Finance Department of a university wants to hire a faculty member starting in the fall semester It will start the screening process about one year before the time at which the faculty member will be employed Position Approval Tom Barkley, the chair of the Finance Department, notices in July that the recent enrollment for finance courses has increased, and that most of the classes were completely full last semester He writes a memo to the university administration about why he needs funding to hire an additional faculty member While he wishes he could hire someone immediately, he realizes that the screening process will likely take about a year So he requests a new faculty member position for the following September (14 months from now) when that fall semester begins Tom specifies the job description (types of courses that the new faculty member would teach) and the salary that he would need to pay to attract a qualified candidate He also explains why he needs to hire a new faculty member A common argument is the need to offer additional courses to satisfy the increasing enrollment, or to replace a faculty member who retired or left the department for other reasons University administrators receive more requests from department chairs to hire faculty members than they can accommodate, because the university has a limited budget In some cases, a position will be tentatively approved, and then eliminated several months later because the budget was worse than expected Placing an Ad Once Tom receives approval for the position, he creates a job description for a new faculty member, which specifies the typical courses that would be taught, and mentions that there are research expectations He mentions in the ad that he and other faculty members in the department will be attending the upcoming Financial Management conference in October and that he would like to interview candidates there He provides his email and regular mail addresses He places the ad in August, about two months before he goes to the conference, and about 12 months before a new faculty member would be employed First Screen of Applications During the next month, Tom receives 100 applications for the position by Ph.D students who are presently at the A.B.D (all but dissertation) stage and are hoping to complete their dissertation in about one year He plans to interview about 14 candidates at the upcoming Financial Management conference He will first screen the stack of 100 applications down to 14 candidates, and will then call the candidates to schedule a one-hour interview period for each of the 14 candidates at the meeting He recognizes that each of these candidates is attempting to get interviews at other universities as well, so he wants to complete his initial screening of the 100 applications quickly He asks four of his faculty members to review the resumes of the candidates, and provide a list of the candidates that he should interview Tom invites this input because a new faculty member will likely be working on research and on service committee assignments with the existing faculty members in the department It is important to hire a candidate who will work well with existing faculty members Tom receives the list of the top candidates from each faculty member Tom identifies candidates that are named on each list, but it is more difficult to determine which of the other candidates should be interviewed Tom organizes a meeting with the faculty members to come to a consensus on an additional candidates to be interviewed He then contacts the 14 candidates and schedules a one-hour interview with each candidate Interviews at Conference In October, Tom goes to the Financial Management conference He prepares a summary of his department’s goals and the backgrounds of his faculty members, which he provides to each candidate He also prepares the following list of questions that he asks each candidate: *Would you be comfortable teaching the specific courses that need to be taught? *What is the status of your dissertation? *When you expect to have your dissertation completed? *What type of research you intend to do? *What is your teaching philosophy? After each interview, Tom fills out a report about each candidate Some candidates received favorable comments such as: *enjoys teaching the types of courses that need to be taught, *is very interested in a job at our university, and *should finish with the dissertation within months Some other candidates received unfavorable comments, such as: *seems disinterested in teaching, *does not have social skills, *views our university as a last resort if he does not get a job elsewhere, *has not even started on the dissertation, and *lacks the intellectual curiosity to research After Tom returns from the meeting, he provides his comments about each candidate to his faculty members The unfavorable comments allowed Tom and his faculty members to eliminate some of the candidates from the list Based on his interviews and the input of faculty members, the list of 14 candidates is reduced to candidates Second Screening Tom then asked his faculty for recommendations on the top three candidates to invite for a campus interview He used a limit of three for a campus visit because it is too expensive and time-consuming to bring in all remaining candidates He and his faculty members narrow the list to finalist candidates that should be invited for a campus visit They also identify other candidates that should be considered if none of the first candidates work out Based on this screening process, of the 14 candidates that were interviewed are eliminated from further consideration Tom writes a letter to the candidates who have been eliminated and tells them that they are no longer being considered He then contacts the top three candidates and arranges a separate 2-day period for each of the finalist candidates to visit his department and campus Finally, he contacts the candidates who should also be considered if none of the first three candidates work out, and informs them that they are still being considered, and that he will be back in touch with them in a few months Conducting Interviews on Campus During the month of November, each of the finalist candidates is invited to campus for a 2-day interview For each campus visit, Tom sets up a schedule so that the candidate can meet separately for one hour with each faculty member in the department, along with a few university administrators In addition, a one-hour period is scheduled for the candidate to present his or her dissertation topic This enables the department to assess the communication and research skills of the candidate In addition, the department can judge the candidate’s progress on the dissertation, and the likelihood that the dissertation will be completed by next fall After the presentation, Tom also takes the candidate to dinner, and invites a few faculty members to come along The dinner allows for a more relaxed atmosphere in which the faculty can further assess the candidate, and the candidate can assess the department The campus visit allows the department to learn more about the candidate and the candidate to learn more about the department to determine if there is a “fit.” Making an Offer By the end of November, all three finalist candidates had their campus visit, and Tom asks the faculty for their opinions about each candidate Tom and the faculty members rank the candidates They conclude from their collective opinions that two of the three candidates would be acceptable The third candidate would not be given further consideration, because his presentation showed some deficiencies in his research skills and his communication skills In January, Tom extends an offer to Karen Wilson, their “top choice” candidate who was rated the highest by the department Karen responds that she will be going on campus visits to two other universities in February, and asks Tom if he can defer his decision until the end of February Tom is concerned about waiting so long, but agrees to the request because he believes that Karen will likely accept the offer At the end of February, Karen informs Tom that she has accepted another university Tom then calls Mike Martin, the “second choice” candidate who he and his department rated highly, and extends an offer to him Mike responds that he recently accepted a job offer from another university, and that he probably would have accepted Tom’s offer had he called her a month ago In this case, Tom’s gamble of waiting on the top candidate did not pay off, and suddenly Tom and his department are scrambling to hire someone for the position before every qualified candidate takes a job elsewhere Recall that Tom and his department identified two candidates that deserved consideration if none of their top candidates worked out Tom calls each of these two candidates to invite them for a campus visit in March Both of the candidates have their campus visit At the end of March, Tom extends a job offer to one of these candidates, who accepts Tom’s offer in mid-April Summary of Process The process described here is typical for many universities Given the different schedules of Ph.D students and departments, and the time needed to schedule long distance trips, the campus interviews stretch over several months Even if a university is very organized, it may have to wait until a specific candidate has completed his or her campus visits Of course, it can impose a short deadline for an answer to its job offer, but may then lose out on the ideal candidate Because it takes so long for the job market to clear, it is understandable why the screening process may begin 12 to 14 months before the position is filled A key lesson is that the hiring process is slow, and it helps to keep your options open Do not automatically assume that you will be hired by a specific university, because there are many factors and people involved in the hiring decision Control what you can control to maximize your marketability, but not let the anxiety of the job market absorb most of your time Some candidates not complete their dissertation before taking a job because they lose focus while in the job market MAKING YOURSELF MARKETABLE Now that you understand how the interviewing process works for a university, you can understand how you can use the interviewing process to make yourself more marketable By increasing your marketability, you may be able to increase your number of interviews at a conference, your number of campus interviews, and your number of job offers Thus, you are more likely to achieve a job at a university that you desire and at a salary that is acceptable to you The suggestions here are general and not cover everything Your dissertation chair or other faculty members may have other suggestions for you TIMING YOUR ENTRANCE INTO THE JOB MARKET To be seriously considered for a full-time tenure track position, you need to be at the A.B.D (all but dissertation) stage by the time you submit your resume to the Financial Management job market web site In addition, you should have a dissertation idea by this time, and a dissertation proposal that is You may be able to eliminate journals from consideration just on the basis of an expensive submission fee Journals often set the submission fee high just to discourage people from sending low quality papers Other information, such as the average time it takes to review the paper, can also be used as a screening device If you would like to have a paper accepted, or at least under subsequent review in the near future, avoid outlets that have long average review times THE JOURNAL REVIEW PROCESS A journal’s objective is to disseminate useful information on a particular field or a subset of the field Role of the Editor and Reviewers The editor of a journal relies on a set of reviewers to review the research paper Such journals are referred to as “peer reviewed.” Each journal has an editorial board, which consists of professors at various universities who have expertise in one or more topic areas in which the journal publishes In addition to the editorial board, the editor also relies on other reviewers to review research papers These reviewers are selected based on their perceived expertise on a particular topic Reviewers are sometimes chosen because one or more of their articles that were published is referenced in a research paper that the editor needs to have reviewed Some journals rely on just one reviewer to review a particular article Other journals rely on two or three reviewers When a journal relies on more than one reviewer, the review process may be slower, because the editor waits for all reviewers to provide reviews before responding to the author of the research paper Some journals are blind peer reviewed, whereby the reviewer does not know the identity of the author of the paper The blind peer review process allows a more objective review, rather than a review that is political or corrupted by personal relationships Criteria Used to Evaluate Research Papers Some journals provide a rating sheet to the reviewer and request that the reviewer complete the rating sheet while reviewing the paper The rating sheet lists the criteria that the reviewer should consider when evaluating a paper Some journals not provide a rating sheet, and simply ask the reviewer to make a recommendation about whether the research paper should be accepted, rejected, or revised (based on the reviewer’s suggestions) and resubmitted after the revisions are completed Even if the journal does not provide a rating sheet, most reviewers probably use the same type of criteria when evaluating a research paper Some of the more common criteria are listed here: Motivation The introduction of a research paper needs to sell the theme of the paper It needs to make readers buy into the theme That is, the introduction needs to provide a good response to the question: “Why would anyone want to read this?” It needs to motivate potential readers to read it Just like most forms of media, journals want to disseminate information that is of interest to the audience that they are targeting If the research paper lacks motivation, a reviewer may reject the research paper without reading any further This may seem cruel but it is reality The logic is that if the paper does not really have a valid purpose, it does not deserve to be published even if all other parts of the paper are well done If the paper lacks motivation, it will not be read by readers, and will not serve the journal’s objective of disseminating useful information Some research papers offer a limited contribution beyond what has already been documented in previous research Reviewers would likely suggest that the motivation within these papers is limited Even though the general topic may be of interest, the motivation is limited if the contents are already known by potential readers It is advisable, before working on a research idea, to a detailed search to make sure you are not doing research that has already been published Review of Related Literature A research paper should identify existing research that serves as a foundation for the primary topic It should also explain its contribution above and beyond the foundation of related literature Hypotheses A research paper should clearly explain what it expects from the research that is being conducted This can be done in the form of formal hypotheses or informally, depending on the field and the typical format of the journal Data Your paper should contain a detailed data section explaining the collection procedure and data screening criteria Maintain your data in case you perform other research on the same data, or revise the research in response to reviewer comments Research Design The research design specifies the methods used to test hypotheses If the research does not properly control for other factors, the research paper may be rejected on the grounds that the results are not reliable That is, any difference in the performance of the two groups may have occurred because the one group of students is in a better elementary school where the teachers have higher standards, and not because of the computerized tutorials This criticism of the research paper will likely result in a rejection, even if all other parts of the research paper are properly done If the results are not reliable, the implications are limited Conclusions Authors should summarize to the reader what the main contribution to the literature is, and mention any limitations of the study Writing Style Research papers are expected to communicate to the reader The writing needs to flow well It needs to be tight, meaning that the thoughts are focused, and not wander far from the main theme While the editor may provide research paper guidelines explaining the formatting and presentation of tables, the usual rule of thumb that applies to data presentation is that the reader should be able to look at the table and understand the point without having to read the text of the paper In other words, the tables should be able to “stand-alone.” Hence, notes to tables should be provided to help the reader understand what they are reading Editorial Decision Once the editor receives the reviews of a paper, he or she makes a judgment about whether the paper should be accepted as is, rejected, or offered to revise and resubmit A high proportion of papers are rejected Some papers are given a revise/resubmit after the first review and require the author to more work to improve the paper based on the reviews of the paper When there are many favorable reviews, an editor must screen the reviews That is, many papers may be given a revise/resubmit recommendation by the reviewers Yet, the editor makes the final decision, and may reject some of the papers for which the author might have been able to satisfy the reviewer Authors are usually disappointed when the reviewer recommends revise and resubmit, but the editor rejected the paper outright Yet, the rejection is sometimes a blessing in disguise, because the authors may never be able to satisfy the reviewer’s requests and therefore are better off sending the paper to a different journal Furthermore, if the editor rejects the paper rather than allowing it to be resubmitted, he or she is usually sending the signal that investing more time at the particular journal is futile, and the author should submit the paper to a different publication outlet with a better “fit” for the paper Interpreting a “Revise and Resubmit” Letter When authors are invited by the journal to revise and resubmit a paper, they assess the reviews and decide whether they could satisfy the reviewer For example, if a reviewer requests that the analysis within the paper be redone using a different model, the authors will likely attempt to the revision Conversely, if the reviewer suggests that the authors need to use different data that are not available, the authors may decide to send the paper to a different journal Sometimes it is not clear exactly what the reviewer wants When there are two or more reviews, there will usually be some amount of overlap between comments provided by the reviewers, so grouping suggestions and criticisms point by point helps to illustrate what needs to be done and if it can be done Later, when the author revises and resubmits the paper to the journal, the author will send the revised paper to the same reviewer The author should also enclose a “response to the reviewer” when resubmitting the revised paper, which explains the revisions that were made in response to the reviewer’s request Sometimes reviewers use a condescending tone, but it is important to sort through the comments objectively There is also the temptation to dismiss the reviewer as an idiot because he or she didn’t understand what you were doing in the paper But if the reviewer did not understand your paper, it is likely that others won’t either, so attempt to rewrite sections the reviewer found confusing Once you have compiled your response to the reviewer and done all the revisions you can, you will resubmit your paper to the journal At this point, the reviewer rereads the paper and decides whether all suggested revisions were made The reviewer may recommend acceptance, or may identify specific improvements that are still needed Alternatively, if the reviewer is dissatisfied with the revised version of the paper, he may reject the paper Many papers that receive a revise/resubmit invitation from the editor are ultimately rejected by the journal Example of Efforts to Get Research Published Here is a common example of the results from attempting to publish a paper Brad Lake just completed his Ph.D and was hired as an assistant professor at a university He wants to have at least one article published in his first year He completed a research paper within two months of taking the job, and submitted it to a high-quality (A-level) journal He realizes that it is a long shot, but wanted to set a high objective If this journal rejects the paper, Brad figures he would be able to get the paper published in a mid-level journal Five months later, he received a rejection from the A-level journal The reviewer bases the rejection on the opinion that the paper does not provide a sufficient contribution to the literature and may have some empirical design problems He then decides to send the paper to a mid-level (B-level) journal Four months later, he received a revise/resubmit, but the suggested revisions are difficult Brad attempts to some of the suggested revisions, but not all of them, because it would have been too time consuming and difficult He resubmits the paper to the journal three months after he received the review Four months later, he receives a response from the journal, rejecting the paper Meanwhile, Brad noticed another article that was recently published that overlapped with his idea He needed to revise his paper to incorporate this article It took Brad five months to differentiate his paper from that of the related paper that was recently published, but he was aware that his paper’s results were now largely redundant Then he submitted the paper to a lower level (C-level) journal Three months later he received a revise/resubmit He worked on the revisions for two months, and resubmitted the paper Three months later, he received a letter from the editor, stating that his paper would be accepted for publication, contingent on his having the paper copy edited He hired a copy editor, who provided the work a month later He then resubmitted the paper, and it was officially accepted by the editor in one month Because the journal had a backlog of accepted papers, (as most journals), the paper is scheduled for publication in one year Brad’s university officially recognized his research as published at the time it was accepted, so the delay in publication did not affect him From the time Brad started the paper, here is a summary of the path of the paper: Activity Paper reviewed by first journal Review time at the B-level journal Brad revises paper and resubmits it to the B-level journal Review time of the revised manuscript at the B-level journal Brad revises paper to distinguish it from another paper that was recently published and then sends the paper to a C-level journal Review of paper at the C-level journal Brad revises paper and resubmits it to the C-level journal Review of resubmitted paper by the C-level journal Copy edit process Final review of paper by the C-level journal Total Time to Formal Acceptance Number of Months 4 3 1 31 Overall, it took 31 months from the time that Brad first submitted the paper until the time at which the paper was accepted for publication Now compare this result to Brad’s original goals He had hoped to have a paper published in his first year His paper was accepted 31 months after he started his position, which is in his third year Some papers are accepted more quickly, but others take longer or may never be accepted The main point of this example is to recognize how long the review process takes One should never anticipate an immediate acceptance of a paper Lessons About the Review Process There are some obvious lessons from the review process First, there is a tradeoff when targeting the journal You want to shoot for the highest level journal in which you think the paper can be placed But if you shoot too high, you lose some time before the paper is ultimately submitted to a journal that is at the appropriate level, and another paper could get published on the same subject [Some journals post their proportion of papers accepted.] Second, attempt to submit one or more papers to journals while you are in your Ph.D program This allows you a higher probability of having a paper accepted for publication by the time you are in your first year as a faculty member at a university Third, the long time involved from the time you submit the paper until its eventual acceptance is due to the time taken to review the paper Many reviews could probably be completed within a full day or less Yet, reviewers have other work priorities ahead of reviewing a paper They may squeeze in a few hours in one week, but then get busy with other work, and are unable to complete the review until several weeks later Most reviewers are not compensated for their work, so it is difficult to expedite the review from reviewers who are essentially providing a free service You can not control the slow review process, but you have control of where you send the paper Try to target a journal that not only satisfies the level you want to target, but also one that is known to have an efficient review process Fourth, you have control to work on other research papers while waiting for the review Given the very small percentage of papers that are accepted at reputable journals, attempt to continually submit research papers so that you are not relying on one single paper In the academic world, this is referred to as “filling up the pipeline.” As applied to the previous example, Brad should have been working on other research while the paper was being reviewed by the reviewer Thus, by the end of his second year, he may have several completed research papers that have been submitted to journals Fifth, your university may have requirements on the mix of journal quality and number of publications you have when you apply for promotion and tenure Many universities distinguish between quality and quantity of research You will need to meet the requirements for both quality of journals and quantity of publications It is important to understand the quality and quantity of published research that is required by the university, so that you can conduct research in a manner that would be consistent with the requirements of the university LIFE AS A FACULTY MEMBER What does a professor all day? Most people not really understand the duties of a professor, including some Ph.D students who plan to be a professor Consequently, some people underestimate the work requirements of a professor, while others overestimate the work requirements Regardless, any Ph.D student who is planning to be a professor should understand the typical job description BACKGROUND In general, a professor’s duties can be classified as teaching, research, and service The allocation of time to each of these three duties will vary among professors within a department, within departments within a university, and among universities Research-oriented universities tend to allocate more of a professor’s assignment to research, which results in a smaller allocation to teaching or service Some institutions are more teaching focused TEACHING The teaching loads of professors in universities are usually much lower than that of teaching loads by elementary schools, high schools, or junior colleges For example, the teaching load at a university that is heavily focused on teaching may be 12 hours a week That is, the load may be four 3-hour courses during a semester, whereby a professor teaches sections of one type of course, and two sections of a second course At the other extreme, the typical research assignment at some research-oriented universities may be one or two courses during a week In this case, a professor may only be teaching or hours during a week People are typically surprised to hear that a professor teaches between and 12 hours a week When considering that a professor may not teach at all in the summer, the work load may seem very light However, the work load is not as light as it seems, as explained next First, teaching a total of 12 hours a week may fill out a week if substantial preparation is needed The first time a professor teaches a course, there is a substantial amount of preparation Some courses also require much grading and many office hours each week in which students ask questions about the material outside of the course time The teaching-oriented universities may require exam review sessions to be held and extra lab sections held outside of class hours Then there are the exams that must be created and graded In order to stay current in the field, course materials must be updated regularly as well New assignments should be generated, in order to make sure that students are not merely recycling past semesters’ exams and assignments Furthermore, most professors must check their email regularly and reply to student questions Teaching a load of or hours a week will normally allow for more free time during the week Yet, when the teaching load is this low, it is usually because the professor has been assigned other duties in addition to teaching These other duties are discussed next RESEARCH Research is perhaps the most misunderstood part of the professor’s job description Research may be defined as an activity that allows a professor to gain more knowledge about topics that they teach However, many universities use a more narrow definition, because they want to benefit from the research that is conducted This is only fair, as the university is essentially supporting the professor to perform research by reducing the teaching load Most universities would like professors to use research in a manner that disseminates knowledge and brings in outside funding, rather than just consume knowledge For example, reading books may be viewed as consuming knowledge But conducting research, writing up results, and having this work published is a method of producing research When the research is published, it is spread to a larger audience Professors are more likely to be viewed as experts in the field when they produce research rather than if they just consume research In addition, by having their work published, a professor can help to make a name for a university The biggest state university may require hours of teaching per week combined with a requirement of high research productivity, while a regional university may have a greater teaching emphasis and require hours of teaching per week combined with a requirement of moderate research productivity Thus, there tends to be a tradeoff between the research required and the teaching load SERVICE Most professors perform some service obligations, regardless of whether they are employed by a research-oriented or teaching-oriented university At one extreme, some professors have assumed major service obligations, such as serving as the chair of the department Internal Service Many professors are assigned internal service obligations For example, they may serve on a committee to select the teacher of the year in their department They may be asked to develop a syllabus for a new course that will be offered by the department in the future Professors are also often required to participate in service internal to the college but outside of the department, such as the faculty senate, college-wide forums on academic honesty, committees that determine the allocation of faculty development funds, etc External Service Some professors volunteer for external service obligations by participating at conferences in their related field For example, they may present their research findings at conferences in their field Alternatively, they may serve as a discussant at the conference, in which they are asked to provide constructive criticism about the research presented by another professor at the conference Or they may even organize a session at a conference in which they lead a discussion or provide a tutorial on a particular topic These forms of external service are encouraged by a university because they may help the professors keep up to date on the latest research in their field, which may indirectly improve the courses they teach In addition, these forms of external service may provide some name recognition for the university Service Role of the Department Chair The chair normally serves as a manager of the professors in his or her department One of the key duties is course scheduling Chair first attempts to offer a set of courses that will satisfy the needs of students He or she needs to provide a diversified set of courses so that any students who are majors can complete their course work in a timely manner In addition, the chair must offer the courses that will allow students who are majors to complete their curriculum and graduate This requires some ability to recognize when students want courses After deciding on the courses to be offered, the chair must assign professors to teach the courses Ideally, the chair considers the preferences of the professors when setting the course schedule For example, the chair may be able to schedule a professor’s course schedule so that they teach multiple sections of the same course, and teach only on Tuesdays and Thursdays Such an efficient schedule would allow the professor large blocks of time to complete research obligations In reality, it is difficult for the department chair to create a course schedule that will satisfy all students and all faculty members Another important duty of the chair is to evaluate the performance of the faculty within the department The evaluation would include an assessment of each professor’s teaching, research, and service duties This is often done for tenure track faulty members with the help of a committee made up of tenured faculty members The chair also serves as an intermediary between the faculty within the department and the higher level administrators within the university Thus, the chair may serve as a lobbyist to fight for higher salaries for the professors within the department At the same time, the chair may need to serve the administration by ensuring that the faculty in the department their jobs properly FACULTY EVALUATION PROCESS Faculty members are commonly rated by their department chair and/or by their colleagues They are evaluated according to how they perform in terms of: (1) teaching, (2) research, and (3) service The proportion of time that is expected to be allocated to each task varies with the university, the department, and even the years of university experience The department chair normally sets the assignments, subject to approval by other administrators such as the dean of the college For example, the weight assigned to teaching may be 80% at a teaching oriented university versus 30% at a researchoriented university The weight assigned to service is usually small However, faculty members who pursue a position in university administration may be rated almost exclusively on their service in that administration role A faculty member usually submits a package of information to the department chair on an annual basis, which is called the “annual review” or “annual evaluation.” The package should show evidence of the faculty member’s performance in teaching, research, and service The department chair can use this package to assess the faculty member’s performance The department chair might also use other information such as comments received from students throughout the year The reviews can be used for recommendations by the chair regarding how merit pay increases should be determined The performance of faculty members can be viewed like a weighted average Their performance in the general tasks of teaching, research, and service are measured The weight (proportion of their assignment allocated to each task) applied to each task is considered along with the performance rating of each task For example, a rating system could be scaled from to 10, with being the worst and 10 being the best rating Example Consider a faculty member who has the following assignment at the beginning of the year as shown in the second column of the following table Assume that at the end of the year, the faculty member received the following performance rating as shown in Column The 4th column shows how the overall rating was derived In this example, the faculty member received an excellent rating in teaching, and lower ratings in research and service Yet, her overall rating of 9.1 is very high, because she achieved excellent performance in teaching, which was given a very high weight If she had excellent performance in service, but only adequate performance in teaching, her overall rating would have been weaker Example of Performance Evaluation of a Faculty Member Responsibilities Teaching Research Service Total Weight Applied to the Task (% of the Total Job Assignment) at Beginning of the Year 60% 30% 10% 100% Performance Rating Achieved During the Year Weight x Rating 10 2.4 Total = 9.1 INDICATORS OF PERFORMANCE Some examples of indicators of a faculty member’s teaching, research, and service are shown in the following list Possible Indicators of Teaching Performance Teaching evaluations by students Evidence of innovative teaching techniques Number of different course preparations New course development Development of innovative assignments Publication of pedagogical research Standards imposed in class • based on content of exams • based on grades that were allocated Teaching awards received Possible Indicators of Research Performance Publications in major journals in the appropriate field Publications in other journals Written research that has been accepted for publication Working papers that have been submitted to journals for consideration Presentations to outside organizations Grants that have been awarded by sponsors outside the university Possible Indicators of Service Performance Service on committees within the university Service to the local community as a university representative Involvement in professional meetings that may enhance the image of the university Service to the department for recruiting new faculty members PROMOTION AND TENURE PROCESS Each university has its own guidelines for a faculty member to pursue promotion or tenure In general, an assistant professor may pursue promotion to associate professor after five or six years, though some universities allow candidates who meet the requirements prior to that time to go up for tenure early An associate professor may pursue promotion to professor after to 10 years A faculty member may pursue tenure after a period of five or six years Thus, some faculty members pursue promotion to associate professor and tenure in the same year What is Promotion? The term promotion implies that your job title has changed from assistant professor to associate professor or from associate professor to professor Being promoted from assistant professor to associate professor or from associate professor to full professor does not change your job description A faculty member who does not take an administrative position may conceivably the same type of job from the first year as an assistant professor until retirement In many cases, the promotion is one way in which you can be rewarded for your teaching, research, and service over the years Many universities have a formula for a percentage increase in salary that is awarded for a promotion Thus, faculty members benefit financially from being promoted What is Tenure? Today, if you ask professors what tenure means, you may receive different answers Most professors would agree that if you are granted tenure, the university is less likely to remove your job position A tenured faculty member still has responsibilities and can be held accountable for those responsibilities But in general, tenured faculty members who perform at a satisfactory level are able to retain their jobs Steps to Evaluate An Application for Promotion or Tenure For promotion or tenure, faculty members are evaluated with a set of several steps The steps involve information gathering and organizing by the faculty member, and then a set of evaluations conducted within the university, as explained next Composing the Promotion or Tenure Package A faculty member who pursues promotion from assistant professor to associate professor must compose a portfolio of information (sometimes referred to as a package) that represents their work over the period that is being evaluated There are usually specific guidelines provided by the university regarding what should be included in the package The same types of contents that are in the annual package would also be in the promotion package Thus, the promotion package may represent the accumulation of the packages that were submitted to the department chair in previous years The contents can be evaluated by various parties within the university to determine whether the faculty member deserves to be promoted to associate professor Many universities also have an external review process where the candidate‘s portfolio is sent to an objective reviewer outside of the institution Sequence of the Evaluation Process While the exact process varies among universities, the evaluation of the faculty member usually starts with the faculty member’s department and moves up the organizational chart An example of the process is provided next Example of Deadlines Involved in the Process of Applying for Promotion September 30 Faculty member must submit promotion package in accordance with university guidelines October 30 A committee within the finance department of the faculty member must meet and assess the faculty member’s package They offer a recommendation on whether the faculty member should be promoted Their written recommendation is included in the package, and submitted to the chair of the finance department The recommendation does not have to be unanimous, and may specify the number of faculty on the committee who support the promotion versus the number who not support the promotion November 15 The chair of the finance department must write a letter recommending whether the faculty member should be promoted The letter is placed within the package, and the package is submitted to a College of Business promotion and tenure committee The college promotion and tenure committee consists of a representative from each department within the college December 15 The College of Business committee conducts its assessment, and submits its recommendation along with the package to the dean of the college January 15 The dean of the college assesses the package and submits his or her recommendation along with the package to the university promotion and tenure committee The university promotion and tenure committee contains a representative from each college in the university For example, there would be a representative from the colleges of arts, sciences, education, and business February 15 The university promotion and tenure committee submits their recommendation on whether the faculty member should be promoted along with the package to a high-level administrator, such as the university president The president assesses the package, reviews the recommendations by the committees, and decides whether the faculty member is to be promoted The specific deadlines vary among universities The schedule shown here illustrates why the process takes several months For state-supported universities, the process may even continue beyond the president There may be a board of regents or some other layer at the state level that makes the final decision Important Advice As explained earlier, the process for getting research published in quality journals can be slow In addition, when you are first starting an academic career, you may need to teach a variety of courses that require an investment of time for preparation It is important that you are well organized so that you can produce what is expected of you If you treat the job as if you were working in industry, and create a disciplined schedule for yourself, you can increase your chances of being successful For example, if you teach from 9:00 to 10:00 a.m and from 3:00 to 4:00 on a specific day, it is important to use your free time effectively, either preparing lecture notes or conducting research Even though there is some flexibility regarding when you your work, the work has to get done The work is not completely assessed on a daily or even a weekly basis, but the production needs to accumulate over time There is a large amount of free time that faculty members have to achieve their production, but if they are only effective when deadlines are coming due, they may find it difficult to catch up after falling behind They may also be rated by some other faculty members within their department, typically the tenured faculty, and often a letter of progress is given to the faculty member by the tenured faculty jointly The letter informs the tenure track candidate if they are meeting expectations, making superior progress, or not making satisfactory progress for tenure RE-ENTERING THE JOB MARKET Some professors periodically change jobs by moving from one university to industry, government, or another university The motives and strategies for changing jobs are discussed next MOTIVES You may want to move to a particular location to be closer to your family Second, you may simply want to leave your present position if you are not satisfied with the work conditions or your responsibilities Third, you may want to move to catch up with the prevailing market salaries The first two motives are common for any position but the third motive is somewhat unique to the university environment In universities, the amount of money available to raise salaries is often limited The market salary can increase substantially in a field that suddenly has many job openings because of increasing enrollment in that field Consequently, the universities that try to recruit must bid higher salaries if there are more job openings than there are Ph.D graduates who are looking for a job It is not unusual for a recent Ph.D graduate in finance to have a higher salary than the existing faculty members who have much more experience Universities typically cannot afford to raise the salaries of all the existing faculty members up to the prevailing market level Consequently, some faculty members decide to re-enter the job market so that they can catch up with the market salary TRANSACTION COSTS One problem with moving from one university to another is the transaction cost involved It may be difficult to obtain a job in your field at another university that is in the city where you live Therefore, changing jobs may require you to move, which will result in transaction costs There are explicit transaction costs such as loss of a spouse’s income, moving expenses or commissions paid to a realtor if you must sell your house There are other costs such as the time and anxiety of having to move children into new schools In some cases, the transaction cost may exceed the extra income that would be earned over the next several years If you plan to move to catch up with the market, determine whether the extra income is really worth the cost involved in moving MARKETABILITY One advantage that a faculty member has over Ph.D candidates in the job market is their experience They already have course preparations and have had more time to conduct research However, their experience sometimes works against them if they have not used their time efficiently to complete research projects This is especially true for job openings at departments that require significant research output A limited level of research productivity of a new Ph.D graduate is more acceptable because the new graduate has not had time since graduation to work on the research Thus, a department might view a new graduate as having more potential for producing research than a faculty member who has not shown much productivity since graduating years ago Those faculty members who have shown research productivity are generally more marketable, because they have proven that they have the discipline and skills to research MOVING WITH TENURE When tenured faculty members attempt to move to a different university, they can attempt to negotiate to come in to the new job position with tenure In some cases, the department will only hire someone without tenure They may be willing to count some years as credit toward tenure, but may want a period in which the person’s teaching, research, and service performance can be assessed directly within their own department Tenure standards are not the same at all departments in a given field, so a department that wants to hire a person does not necessarily grant tenure just because the person has tenure elsewhere Some faculty members who have tenure at one university not want to go through the process again at another university Thus, having tenure may discourage them from pursuing a job at another university Alternatively, they may only consider job positions in which the department that has a job position would grant tenure ... teaching evaluations by their students, and grades that they assigned to their students This information indicates their performance (from the perspective of students) along with their grading standards... at the salary offer you receive once you are in the job market You may hear some general information about existing salary offers from other finance Ph.D students at FAU who are presently in the. .. a four-year period in which they would be in a Ph.D program GENERAL JOB MARKET CONDITIONS The academic job market in finance represents the interaction between the finance departments at universities