Monitoring and Assessing Institutional Performance in Higher Education
During the last decade dramatic changes have emerged in the way governments interact with colleges and universities. Governmental authorities are no longer as receptive to the traditional self-regulatory processes that have dominated university development for centuries. A new economic motivation is driving states to redefine relationships by pressuring institutions to become more accountable, more efficient, and more productive in the use of publicly generated resources. Earlier attempts by states to measure institutional efficiency and performance have generally been met with passive resistance or benign neglect in academic circles. Although this trend still prevails, an increasing number of educational leaders are now exhibiting an awareness that the status quo is no longer a viable option for higher education. Barnett (1992) points out that our higher education systems have entered "the age of disenchantment" and "society is not prepared to accept that higher education is self-justifying and wishes to ex pose the activities of the secret garden. With greater expectations being placed on it, higher education is being obliged to examine itself or be examined by others" (p. 16). This observation reflects the increasing societal requirement that colleges and universities must become more responsive to national economic needs and new governmental demands for increased performance.
As part of the changing relationship between government and higher education, state governments are placing an increasing burden on higher education to play a pivotal role in transforming the existing low-wage economic structures into high-performance, technology-based economies. Governments are increasingly looking to the different sectors of higher education to augment learning skills and improve workers' ability to develop and use technology, thus enhancing productivity and strengthening the state's economic position. According to Marshall (1995), former U.S. Secretary of Labor, "Education is the crucial element in this transformation process. It can no longer be considered apart from the state's overall economic strategies" (p. 62). Marshall is inferring that education, and increasingly higher education, has become an essential component of national economic investment strategy. In a competitive and global environment, increasing educational investment to produce a highly educated and skilled workforce i s a vital element for future economic growth. Without this investment and reliance on education, and especially tertiary education in industrialized societies, the competitive status of a nation will substantially deteriorate in the coming years.
This reliance on higher education as a principal economic engine is accented by today's world economy, which is changing national economic and educational needs more rapidly than ever before. Higher education increasingly determines a society's evolutionary potential and, in economic terms, affects international competitiveness and choice of industrial location. In nations with comparatively sophisticated higher education systems, governments are adopting new economic and managerial strategies to assess and compare college and university performance. Government reporting and funding mechanisms for higher education are in the midst of a major transformation from complete input-based systems to the adaptation of more competitive outcomes-based approaches (Barnett & Bjarnason, 1999; Brennan, 1999; Ewell & Jones, 1994; Gilbert, 1999; Layzell, 1998; Schmidtlein, 1999).
Since the early 1990s, government interest in performance funding and budgeting for higher education has substantially increased in OECD nations (Burke & Serban, 1997; El-Khawas & Massey, 1996; Jongbloed & Koelman, 1996; Layzell, 1998; Peters, 1992; Piper & Issacs, 1992). This transformation has resulted from the realization that to strengthen their competitive positioning, states and nations must increase their involvement in the development of human capital and research through higher education. …