Performance Funding for Higher Education

Executive Summary ix Foreword xiii Acknowledgments xv Introduction 1 Performance Funding: Nature and Forms 5 Performance Funding versus Performance Budgeting and Reporting5 Performance Funding 1.0 and 2.0 6 Types of Performance Indicators: Ultimate and IntermediateStudent Outcomes 7 Conceptual Framework and Research Methods 9 Conceptualizing the Impacts of Performance Funding 9 Data Search 13 Data Analysis 14 Limitations 15 Description of State Performance Funding Programs 17 Which States Have Had Performance Funding Programs? 17 Florida's Two Performance Funding Programs 19 Missouri's Funding for Results Program 23 North Carolina's Program for Community Colleges 24 Ohio's Old and New Performance Funding Programs 25 Pennsylvania's PF 2.0 Program 27 South Carolina's Early PF 2.0 Program 28 Tennessee's Old and New Performance Funding Programs30 Washington's Two Programs: One Abandoned, One Added Later32 Policy Instruments and Their Immediate Institutional Impacts35 Changing Funding Incentives 35 Increasing Awareness of State Priorities 37 Increasing Awareness of Institution's Own Performance39 Increasing Status Competition among Institutions 40 Building Capacity for Organizational Learning 41 Intermediate Institutional Impacts 45 Alterations to Academic Policies, Programs, and Practices 45 Changes in Developmental Education and Tutoring 48 Alterations to Student Service Policies, Programs, and Practices49 Intended Student Outcomes 53 Graduation Numbers and Rates 53 Retention Rates 56 Remedial Education Completion Rates 56 Obstacles to the Effectiveness of Performance Funding 57 Inappropriate Performance Funding Measures 58 Instability in Performance Funding Levels, Indicators, andMeasures 61 The Brief Duration of Many PF Programs 62 Inadequate State Funding of Performance Funding 63 Shortfalls in Regular State Funding 63 Uneven Knowledge about Performance Funding Within Colleges64 Inequality of Institutional Capacity 67 Institutional Resistance to and Gaming of the System 68 Unintended Impacts of Performance Funding 71 Costs of Compliance 71 Narrowing of Institutional Missions 72 Grade Inflation and Weakening of Academic Standards 73 Restrictions of Student Admissions 75 Diminished Faculty Voice in Academic Governance 76 Summary and Conclusions 79 Main Findings 79 Research Implications 80 Implications for Practice 82 Concluding Thoughts 90 Appendix 91 Table A1: Data Analysis Categories: Number of Studies Where TheyAppear 91 Table A2: Multivariate Analyses of Impacts of PerformanceFunding on Graduation and Retention Numbers and Rates 96 Notes 103 References 109 References for Individual States 121 Name Index 125 Subject Index 128 About the Authors 133