Performance Funding for Higher Education E-Book

Kevin J. Dougherty

• Herausgeber: John Wiley & Sons
• Kategorie: Bildung
• Serie: J-B ASHE-ERIC Report Series (AEHE)
• Sprache: Englisch

Seitenzahl: 190

Veröffentlichungsjahr: 2013

Beschreibung

After first appearing in 1979 in Tennessee, performance fundingfor higher education went on to be adopted by another 26 states.This monograph reviews research on a multitude of states to addressthese questions: * What impacts does performance funding have oninstitutional practices and, ultimately, student outcomes? * What obstacles and unintended effects do performancefunding encounter? This monograph finds considerable impacts on institutionalpractices, weak impacts on student outcomes, substantial obstacles,and sizable unintended impacts. Given this, the monograph closeswith a discussion of the implications for future research and forpublic policymaking on performance funding. This is the 2nd issue of the 39th volume of the Jossey-Bassseries ASHE Higher Education Report. Each monograph is thedefinitive analysis of a tough higher education issue, based onthorough research of pertinent literature and institutionalexperiences. Topics are identified by a national survey. Notedpractitioners and scholars are then commissioned to write thereports, with experts providing critical reviews of each manuscriptbefore publication.

Leseprobe

Contents

Executive Summary

Foreword

Acknowledgments

Introduction

Performance Funding: Nature and Forms

Performance Funding versus Performance Budgeting and Reporting

Performance Funding 1.0 and 2.0

Types of Performance Indicators: Ultimate and Intermediate Student Outcomes

Conceptual Framework and Research Methods

Conceptualizing the Impacts of Performance Funding

Data Search

Data Analysis

Limitations

Description of State Performance Funding Programs

Which States Have Had Performance Funding Programs?

Florida’s Two Performance Funding Programs

Missouri’s Funding for Results Program

North Carolina’s Program for Community Colleges

Ohio’s Old and New Performance Funding Programs

Pennsylvania’s PF 2.0 Program

South Carolina’s Early PF 2.0 Program

Tennessee’s Old and New Performance Funding Programs

Washington’s Two Programs: One Abandoned, One Added Later

Policy Instruments and Their Immediate Institutional Impacts

Changing Funding Incentives

Increasing Awareness of State Priorities

Increasing Awareness of Institution’s Own Performance

Increasing Status Competition among Institutions

Building Capacity for Organizational Learning

Intermediate Institutional Impacts

Alterations to Academic Policies, Programs, and Practices

Changes in Developmental Education and Tutoring

Alterations to Student Service Policies, Programs, and Practices

Intended Student Outcomes

Graduation Numbers and Rates

Retention Rates

Remedial Education Completion Rates

Obstacles to the Effectiveness of Performance Funding

Inappropriate Performance Funding Measures

Instability in Performance Funding Levels, Indicators, and Measures

The Brief Duration of Many PF Programs

Inadequate State Funding of Performance Funding

Shortfalls in Regular State Funding

Uneven Knowledge about Performance Funding Within Colleges

Inequality of Institutional Capacity

Institutional Resistance to and Gaming of the System

Unintended Impacts of Performance Funding

Costs of Compliance

Narrowing of Institutional Missions

Grade Inflation and Weakening of Academic Standards

Restrictions of Student Admissions

Diminished Faculty Voice in Academic Governance

Summary and Conclusions

Main Findings

Research Implications

Implications for Practice

Concluding Thoughts

Appendix

References

References for Individual States

Name Index

Subject Index

About the Authors

Performance Funding for Higher Education: What Are the Mechanisms? What Are the Impacts?

Kevin J. Dougherty and Vikash Reddy

ASHE Higher Education Report: Volume 39, Number 2

Kelly Ward, Lisa E. Wolf-Wendel, Series Editors

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Cover image by © desuza communications/iStockphoto.

ISSN 1551-6970 electronic ISSN 1554-6306 ISBN 978-1-1187-5438-2

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Advisory Board

The ASHE Higher Education Report Series is sponsored by the Association for the Study of Higher Education (ASHE), which provides an editorial advisory board of ASHE members.

Ben Baez

Florida International University

Amy Bergerson

University of Utah

Edna Chun

University of North Carolina Greensboro

Susan K. Gardner

University of Maine

MaryBeth Gasman

University of Pennsylvania

Karri Holley

University of Alabama

Adrianna Kezar

University of Southern California

Kevin Kinser

SUNY – Albany

Dina Maramba

Binghamton University

Robert Palmer

Binghamton University

Barbara Tobolowsky

University of Texas at Arlington

Susan Twombly

University of Kansas

Marybeth Walpole

Rowan University

Rachelle Winkle-Wagner

University of Nebraska – Lincol

Executive Summary

Over the past three decades policymakers have been actively seeking new ways to secure improved performance from higher education institutions. One of the more popular approaches to this has been performance funding. In contrast with performance reporting or performance budgeting, performance funding uses a clearly specified formula to tie funding to institutional performance on indicators such as student retention, attainment of certain credit levels, and graduation numbers.

After first appearing in 1979 in Tennessee, performance funding was adopted by an increasing number of states through the 1990s and has been enjoying a considerable revival in the past few years. Several states recently adopted or readopted performance funding, and many other states are actively discussing it. This monograph presents findings from studies on performance funding programs in a multitude of states to address the following questions: What impacts does such funding have on student outcomes, how are those impacts produced, and what obstacles and unintended effects are encountered in the process?

After a brief overview in the first chapter, the second chapter defines performance funding and describes its leading forms. It distinguishes between the early and still dominant form of performance funding (dubbed PF 1.0) and a striking new development (dubbed PF 2.0). In PF 1.0, institutions receive performance funding as a bonus over and above regular, base state funding for higher education. In PF 2.0, performance funding indicators are embedded in the base funding formula itself.

The third chapter provides a conceptualization of how performance funding works and describes the research methods used in this review of the literature. Performance funding programs aim to improve institutional performance, particularly with respect to student outcomes. These “ultimate” outcomes desired include improvements in, for example, student retention, passage of key courses, attainment of certain levels of credit accrual, graduation, and job placement. In order to realize such outcomes, performance funding programs embody—following Argyris and Schön (1996)—theories of action as to how these ultimate outcomes are to be achieved.

There are several theories of action espoused for performance funding. While the primary theory involves the use of material incentives, there is also some evidence that performance funding advocates have considered three other theories of action: providing colleges with information about the goals and intended methods of performance funding as a means to catalyze institutional change by persuading colleges about the importance of improved student outcomes; making colleges aware of their performance, particularly in comparison to other colleges, in order to mobilize feelings of pride and status striving; and building up colleges’ capacity to engage in organizational learning and change. Changes in college revenues, colleges’ awareness of state priorities and of their own performance, and colleges’ learning capacities can be termed the immediate institutional impacts of performance funding. To be effective, these immediate changes must catalyze intermediate institutional changes involving modifications of institutional policies, programs, and practices that will result in the ultimate student outcomes that are of interest to policymakers, such as more baccalaureate graduates or higher job placement rates.

The fourth chapter lists those states that have ever had performance funding and describes the programs in the eight states that account for almost all of the studies available on the impacts of performance funding.

With this background, the monograph shifts to analyzing the research data on the impacts of performance funding. This analysis not only discusses the immediate, intermediate, and ultimate impacts of performance funding, but also the obstacles and unintended impacts it encounters.

The fifth chapter provides a review of the research on the immediate impacts of performance funding. It finds evidence that performance funding does produce changes in institutional finances, college knowledge of state goals, and college awareness of their performance. However, there is little evidence of state efforts to improve institutional capacity for organizational learning.

The sixth chapter presents the evidence on intermediate institutional impacts, consisting of organizational changes that are designed to boost a college’s student outcomes. The monograph finds extensive evidence that colleges do make substantial changes to their academic and student services policies, programs, and practices in response to performance funding. Moreover, there is also some evidence that they do improve their capacity for organizational learning, even if there is little state support for this.

The seventh chapter analyzes the impacts of performance funding on ultimate student outcomes, particularly on graduation and retention, for which we have the most extensive data. Unfortunately, despite the importance of these outcomes, the current research literature on performance funding sheds relatively little light on the extent to which the desired student outcomes are being realized and on the mechanisms that might be facilitating such outcomes. This is largely due to the dearth of careful multivariate studies on performance funding impacts and the fact that the studies that do exist focus on organizational outputs and ignore organizational processes. Although there are a few noteworthy studies that find that performance funding does have a significant impact on graduation numbers, the bulk of the rigorous multivariate studies have failed to find such an impact.

The sparse evidence that performance funding actually does result in significantly improved student outcomes points to the strong possibility that performance funding programs encounter significant obstacles to their effective functioning. The eighth chapter reviews the evidence on obstacles and does find widespread evidence that performance funding programs encounter a broad range of impediments. Among the obstacles that crop up in the research literature are the use of inappropriate performance measures; instability in funding, indicators, and measures; the brief duration of many performance funding programs; funding levels that are too low; shortfalls in regular state funding for higher education; inequalities in institutional capacity; unequal distribution of knowledge and expertise about performance funding within institutions; and resistance and “game-playing” by institutions.

Policymakers announce certain goals when adopting performance funding, but as with any policy intervention, there are also consequences associated with performance funding that are unintended, at least publicly. The ninth chapter provides a review of the evidence on the unintended impacts that are produced by performance funding. Among these are significant costs of compliance, a narrowing of institutional missions, restrictions on student admissions, and grade inflation and a weakening of academic standards.

This monograph closes by reviewing its main findings, discussing the limitations of the research reviewed and how they should be addressed, and drawing policy lessons from the research. This discussion of policy lessons focuses on ways to overcome obstacles to the effective functioning of performance funding and address the unintended impacts documented by the studies reviewed.

Foreword

As budget crises loom in all sectors of education, issues associated with accountability and institutional outcomes are at the fore of people’s minds at the federal, state, and institutional levels. Performance funding is one response that an increasing number of states are using to communicate and potentially influence higher education outcomes, ranging from learning and development to graduation rates. Despite tremendous interest among policymakers in performance funding, there is very little systemic analysis of its impacts or effectiveness. In this monograph, Dougherty and Reddy provide an overview of what performance-based funding is and its multiple manifestations. They also provide different theoretical perspectives on the topic. This broad-based approach presents itself as an opportunity to bring more people into the conversation about state performance funding.

This monograph stands to make a significant contribution to our understanding of state-level performance funding programs. As the authors indicate, states have increasingly adopted new forms of performance funding (PF 2.0), making a comprehensive account of the outcomes of earlier iterations of performance funding even more important. These performance funding programs are often quite intense, and they too often were created without the assistance, guidance, or insights gleaned from research. When one examines the limited research on performance funding, what is most apparent is that it focuses on one state or one institution at a time. In contrast, this monograph takes a broader approach. It looks at research on more than one institution and more than one state—it lays a strong foundation for understanding the outcomes of performance-based funding. It is important to note that this isn’t an advocacy piece, which represents much of the writing on the topic. Instead, this is a careful, balanced, and systematic assessment of performance funding drawing on all the evidence available.

As part of its analysis, the monograph tries to lay out the explicit and implicit theories of action underlying performance funding and call attention to its obstacles and unintended impacts. This is one of the only pieces of literature of which I am aware that conceptualizes performance funding in causal terms. There is a great tendency to assume that the process by which it might improve student outcomes is quite obvious (“just put money on the table and things will happen”) and need not be specified or closely scrutinized. The authors make clear that this process is more complicated than that. The analysis reveals many subthemes related to obstacles and unintended (negative) impacts related to performance funding. And, perhaps more important, the analysis reveals limited evidence of significant positive ultimate impacts of performance funding. The monograph provides some evidence to determine if states should continue to adopt such programs. Higher education researchers and policymakers need to understand the landscape of these programs and their effects on a host of outcomes and processes, and this monograph delivers.

There is a varied audience for this monograph, including scholars, students, and policymakers. It also will be of interest to those “on the ground,” who would have to actually alter or change their practices in order to meet the performance funding mandates. This monograph is readable and accessible to a broad audience, including anyone who works in the areas of student access, student learning, retention, and workforce development. Indeed, a lot of conversations about performance funding are limited to policymakers at the state level and to administrators responding to the requested outcomes. This leaves out the majority of people at colleges and universities, whose work likely affects those outcomes. This wider audience of practitioners and faculty members will find this monograph to be informative, interesting, and pertinent. Among its strengths, this monograph does a laudable job of translating policy conversations into specific institutional realities. This monograph is a “must-read” for all interested in improving higher education and its outcomes and who think that public higher education needs to be more accountable.

Lisa E. Wolf-Wendel

Series Editor