Senior Administrator Moment July '18: Some Thoughts on Performance-based Funding

Senior Administrator Moment – Dr. Sally McRorie, Provost, Florida State University – July, 2018

Our first Senior Administrator Moment entry comes from Dr. Sally McRorie, Provost and Executive Vice President at Florida State University. Dr. McRorie has had a distinguished career in art education including service a department chair, Dean of the College Visual Arts, Theatre and Dance and Vice President for Faculty Development and Advancement at FSU. She is a graduate of the Institute for Women in Higher Education Administration at Bryn Mawr and the University of Kansas, where she earned her doctorate. She served two terms as president of the National Association of Arts Administrators, is Vice President of the National Association of Schools of Art and Design and served as senior editor of Studies in Art Education.

Some Thoughts on Performance-based Funding

A number of state university systems now have some form of performance or metrics-based funding model. These models require public universities to maintain a laser focus on areas of strategic emphasis delineated by the state legislature, governor, or another government agency in power. That focus may lead to steady or increased budget allocations in this time of greatly decreased state support. Universities have long been less than nimble in their abilities—and yes, willingness—to change. Losses in state funding, however, have made such resistance to change a poor strategic choice.

Performance-based funding’s focus on specific outputs (degrees awarded in certain areas like STEM, retention, graduation rates, cost per degree, first-year salaries, etc.) rather than inputs, dramatically changes the traditional patterns of how quality historically was determined (funding per student, faculty to student ratios, etc.). Although student success surely is the goal of every institution of higher education, performance-based funding further specifies:

1. What is valued and how it is measured based on metrics chosen.
2. The fiscal impacts of how one university in a system performs relative to every other one in the system.
3. Whether additional performance funds will be allocated.

For nearly the last decade in my own state, Florida, those universities in the bottom three of our twelve publics across the Florida State University System (FSUS) annually have not received any new performance funds, and may have lost their “skin in the game” funds, which every institution must contribute as a significant part of the total performance funds available for allocation throughout the entire system.

Every university has its own unique mission and vision. My institution, Florida State University, offers a number of very highly ranked programs in the arts and humanities as part of meeting our mission. We are proud of the impact of those programs on the quality of experiences for all our students, faculty and community. However, graduates of these arts and humanities programs typically do not earn points on performance funding metrics, which are heavily weighted toward STEM. Similarly, arts and humanities graduates typically do not earn first-year salaries (a Florida performance metric) that are as high as STEM graduates, although by mid-career their salaries often are commensurate with those of their STEM peers.

As another example, we have a major focus on entrepreneurship on our campus, with entrepreneurs-in-residence in 12 of our 16 colleges, from music to medicine. A recent gift of $100,000,000 to start the interdisciplinary Jim Moran School of Entrepreneurship has broadened even more the entrepreneurial and innovative nature of student experiences. I often say that no artist is ever successful without being entrepreneurial! However, business start-ups and performing careers do not usually yield a lot of money in the first year, a reality that a metric on first-year salaries does not take into account.

Finally, universities are ethically charged with helping prepare students not just for their first jobs, but also for a lifetime of evolving careers. Integrating critical thinking and collaborative working experiences, as well as research, internship, and social service opportunities into the education of students is primary. The impacts of these accomplishments of universities are difficult to measure, but are bedrock to becoming fully engaged and productive citizens.

The need to meet performance-based funding metrics by its nature may lend itself to a homogenization of curricula and programs. If the only “new” money an institution receives is due to its short- and long-term investments in state-defined areas of strategic interest, for example, then every institution feels pressured to make such changes to ‘earn’ that money. Long-term impacts may be the increased difficulty of a public university system to provide access to students, including minority students, who have not had the best secondary school opportunities in STEM, for example, but who are capable of success in STEM (or other) degrees with a strong scaffolding of academic support.

A major question of how one chooses to invest performance funds, should they be allocated, is decided by whether or not they are awarded as recurring or non-recurring funds. Universities make recurring investments in faculty and staff in particular, so if funds are given as non-recurring, it is difficult to make the kinds of personnel investments that yield long-term impacts in curricula and student success programs, as well as research initiatives.

The possibility of a tiered or a mission-driven approach to determining the specific metrics might be useful in performance-based funding. For example, the mission of New College of Florida, a top-ranked liberal arts college, is simply not the same as the mission of our large research institutions. Grouping similar colleges within a system might lead to a lessening of homogenizing impacts or to the allocation of funding for exceeding performance expectations in meeting institution-specific missions.

Despite concerns related to some unintended consequences of performance-based funding, it seems increasingly entrenched in many states. Florida is now examining what a fully performance-based budget process would look like, with no baseline budgets, and funds allocated only as based on relative annual performance on metrics among all the universities in its system.

It is increasingly important to understand the formulas and methods for public funding of state university systems. If an institution’s new or continuing funding is not measured by enrollment or another such factor, but is determined by relative placement in a performance-based system of metrics, change likely is not just needed, but imperative.

The opinions expressed in this post are those of the author and do not necessarily reflect those of the Commission on Academic Affairs or ACPA. Comments or questions should be addressed to Lynn Hogan (lhogan@fsu.edu), Commission on Academic Affairs Faculty in Residence.

If there is a seasoned administrator you would like to hear from, please send that information to Lynn Hogan at lhogan@fsu.edu and we will do our best to woo them to write.

Lynn Hogan

Faculty in Residence

Commission on Academic Affairs