What does performance-related funding achieve?
Budgeting issues are among the most important but also most controversial aspects of higher education reform. This is reason enough for the CHE – Centre for Higher Education Development to take a critical look at one of the main financial management instruments in higher education, namely performance-related funding, and to identify possibilities for its further development. In the CHE working paper, 13 authors reflect on current practice.
Performance-related funding is both a public and intra-institutional management instrument that aims to deliver performance improvements via monetary stimuli. It is only one instrument among many, but it is particularly important as it affects the lifeblood of higher education institutions. Performance-related funding also touches on another sensitive area, namely assessment of research and teaching. Professors in particular often criticize assessments for being insufficiently detailed and inadequate. No adequate solutions have yet been found for the conflicts resulting from this. Performance-related funding overall is, therefore, “work in progress”.
The 146-page volume by Sigrun Nickel and Frank Ziegele called “Bilanz und Perspektiven der leistungsorientierten Mittelverteilung“ (“The outcome and perspectives of performance-related funding”) shows how far ministries and higher education institutions have come in terms of assimilating the reform module. The text analyses performance-related funding from three perspectives:
1. Effects from the point of view of academic research
2. Practical reflections from the point of view of higher education management
3. Critical assessment from the point of view of public planning
The results show clearly that performance-related funding is becoming increasingly important in the academic landscape in Europe and that, within a short period of time, it has lead to enhanced efficiency and greater responsibility at higher education institutions. Risks are emerging at the same time, however, namely the high costs arising from the necessary acquisition of information about performance data, the obstacles to strategic action resulting from the fact that remuneration is awarded retrospectively, and the loss of a sense of common welfare due to heavy competition. There are still many improvements to be made. It is against this background that the authors want to develop a discussion and invite all interested parties to respond to the articles.
The CHE working paper, number 111, is a collection of articles by 13 authors from higher education research, higher education management and higher education politics who reflect on the practice of performance-related funding and analyse the effects that can be identified. The instrument is not examined in isolation, however, but in the context of other fields of management, such as strategy, quality and research management.
Further Information can be found in the publication stated below.