Performance Funding: What’s the Problem?

“Performance Funding” is all the rage in public higher education these days. A cornerstone of the Department of Higher Education’s Vision Project, it is playing a bigger role in how state allocations are distributed to our campuses. Basically, externally-imposed, one-size-fits-all criteria are used to assess how well a school is doing, and the better it does, the more funding it receives. Some strong supporters of public higher education advocate for this approach as one that demonstrates “accountability” and could convince legislators to increase funding.

PHENOM is very concerned about broad implementation of “performance funding” as the vehicle for advancing our public higher education system. We agree that demonstrating the value and effectiveness of what we do on our campuses is crucial, but we think this could be done with campus-centric implementations of outcomes assessment. Unfortunately, we see deeply-flawed notions of “performance funding” inserted in recent budgets having pernicious implications for our students and campuses.

First, performance funding tends to emphasize those things which are easily countable and comparable to other states. These are not necessarily the truly important contributions made by a college or university. That has led to using proxy data to evaluate the highly complicated and subtle idea of “an educated graduate.” For example, to summarize our effectiveness in teaching only by counting how many students pass licensure examinations belittles the subtle work of developing intelligent, reflective workers and citizens.

Second, when performance measures have high stakes attached to them, like the campus budget, there is always a tendency to game the system. For example, higher graduation rates can be attained through more selective admissions, easier grading, awarding more credits for the same course, or lowering graduation requirements. These are the opposite of what is intended. We have seen this problem proliferate around the country as high stakes testing has taken hold in K-12. People and systems cheat or cut corners when there is much at stake and tests or arbitrary numbers are the only tools for evaluation.

Finally, the very logic of improving quality through this kind of system is flawed. If we want to get graduation rates for minority students up at a smaller school like Berkshire Community College, depriving the campus of funds for failing to reach certain benchmarks will not enhance the college’s ability to achieve its goals. This funding model leads away from the desired outcome.

How would you reframe the issues of funding and performance? We believe our state could benefit from a broad and open discussion.

Return to PHENOMenal News Fall 2014