Performance Management in Universities: Effects of the Transition to More Quantitative Measurement Systems

Abstract

The measurement of research and teaching performance is increasingly common within universities, driven probably by the rise of New Public Management (NPM). Although changing over time and varying from country to country, NPM involves the use of private sector methods in the public sector. Traditionally, performance measurement in universities has had a developmental role – helping individuals to improve their (future) performance. However, the new systems seem more judgemental – i.e. seeking to quantitatively evaluate (past) performance. We study performance measurement in two Accounting and Finance groups – one in the Netherlands and one in the UK. In both we see an increasing use of judgemental forms of performance evaluation and, in particular, the use of more quantitative performance measures. The use of these more judgemental quantitative systems is seen to have various effects. Although these systems emphasise objective quantitative measures, they relocate subjectivities (usually at a greater distance from the subject), rather than remove them. This creates uncertainty and anxiety about how the systems are used. There is a danger that the new systems could inhibit creativity in teaching and limit contributions to the world outside the university. Furthermore, they could damage creativity and innovation in accounting research – as researchers play safe in getting the publications they need. As we are both researchers and practitioners in this area, we should be challenging these trends and pointing to the dangers for research (and teaching) in our field.

Notes

Although there are differences from country to country, old public management, or old public administration, could be said to have been shaped by Weberian notions of bureaucracy together with ideas from scientific management (see, e.g. Hood, 2000; Gruening, 2001; Lynn, 2006).

Although the term managerialism can be defined in different ways, in essence it means that in the public sector politicians set policies and professional managers are responsible for their implementation through the use of private sector management styles (see, e.g. Hood, 1991; Lynn, 2006; Wallis et al., 2007).

However, Townley (1997) observed some variation between types of universities. Technical universities, which did not have the same tradition of academic freedom, seemed to accept the government pressure for the introduction of judgemental performance appraisal systems.

The number of students in higher vocational schools has increased even more: from 32,000 in 1950 to 403,000 in 2009 (CBS, 2010), but in contrast to the position in the UK (at least since 1992), the Dutch higher vocational schools (i.e. polytechnics) are not a part of the university sector (although in 2011 the government announced plans to bring them into the university sector).

In absolute terms, the contribution from central government to universities for teaching and research in 2007 was €2784 million (VSNU, 2010).

In Dutch: Wet Modernisering Universitaire Bestuursstructuur.

However, these formal changes in governance structures do not mean that, in practice, university and faculty boards have complete autonomy. The traditional Dutch ‘consultation culture’ and academic values still seem to play an important role.

However, student fees in the Netherlands remain relatively low in comparison with the UK. In 2007–2008 the annual fee for a three-year undergraduate degree and a one-year master's degree in the FEB was €1538 (in 2011–12 it is €1713). Although the fee for non-EU students is higher, at €6500 for undergraduates and €7500 for master's students in 2007–2008 (respectively, €6900 and €11,400 in 2011–12), there are relatively few non-EU students in the FEB – but the numbers have been increasing in recent years.

During the external visitations attention is given to such things as the content of teaching and research programmes, the quality of internal procedures, the views of employers and the labour market position of graduates, external rankings and research grants income. However, these do not play a role in the performance measurement system at the level of departments within the Faculty of Economics and Business.

As we started our research in November 2006, when we discuss developments before September 2007, we are speaking about the former Faculty of Economics. However, in that earlier period the two predecessor faculties, the Faculty of Economics and the Faculty of Management and Organization, were already working closely together. To avoid a complex mix of names, we will use the abbreviation ‘FEB’ for both the period before and the period after 1 September 2007.

In 2010 (i.e. after we completed our research) the Finance group moved to the Economics and Econometrics Department.

Other funding councils are the Training and Development Agency for Schools (TDA) and the Department for Employment and Learning Northern Ireland (DEL).

This is one reason why the number of international students in British universities has increased rapidly in recent decades.

These will increase fees very substantially in 2012, as the government will remove most of the public funding for university courses. At the time of our fieldwork, annual fees for three-year undergraduate programmes were £3145; this had risen to £3375 for the academic year 2011–12 and will rise to £9000 from September 2012.

The last RAE was in 2008. It will be replaced by a new Research Excellence Framework (REF) from 2014. However, there are many similarities between the RAE and REF; a discussion of their differences is not necessary for this paper.

Vice-chancellor is the traditional title of the senior person involved in the day-to-day management of British universities. However, some universities are now changing this title, for example, since the recent merger (see below) the University of Manchester has had a President at its head.

Traditionally, the position of dean rotated amongst senior academics within the faculty. Nowadays, more and more deans are recruited from outside the faculty/university and, increasingly, to permanent positions.

Although the ‘Victoria University of Manchester’ was the formal name of the university until the merger, it was generally known as the ‘University of Manchester’. However, to distinguish it from the post-merger University of Manchester, the pre-merger name of the Victoria University of Manchester (usually shortened to VUM) has been used internally to distinguish it from UMIST. Hence, the merger was between VUM and UMIST and it created the University of Manchester.

This was prior to a re-organisation that took place in the summer of 2007.

MBS is subdivided into ‘Divisions’, one of which is the A&F Division.

More recently, the financial position of the A&F Group has become more transparent and the surpluses it generates are acknowledged, although they are not under the control of the head of the A&F Group, as they were (at least to some extent) prior to the merger.

We are aware that this could mean that not all relevant factors and aspects were recollected and mentioned (cf. Malmi, 1999, p. 668).

A more detailed list of the topics covered in the interviews is set out in the Appendix.

Copies available on request from the authors.

At that time there were 63 people in the Manchester A&F Group. This comprised 33 lecturers/senior lecturers (to whom the questionnaires were sent), 20 professors, 6 post-doc researchers and 4 teaching fellows.

In the Groningen A&F Group there were 36 people, including 10 professors, the remainder held positions equivalent to lecturer/senior lecturer in the UK. Only 25 questionnaires were sent to the non-professorial staff as, at that time, one person was working abroad for an extended period.

In 2007 the name was changed to personal development interviews, but they remained essentially the same as the job appraisal interviews.

The position of the professors in the Groningen A&F Group was quite similar, with 80% having worked there for more than seven years.

In this section we discuss individual performance measurement as this is the focus of our research questions. There is no formal system for measuring the performance of the A&F Group per se, although the Director and the senior management team of the Business School will, from time to time, discuss various aspects of the performance of the A&F Group with the Head of A&F and with others who have administrative roles within the A&F Group and within the Business School more generally. These discussions may have an impact on, for instance, the resources allocated to the A&F Group or the approval of plans put forward by the Group, but they do not directly affect the way in which the performance of the individual members of the A&F Group is evaluated. Furthermore, such performance measures as national student surveys, employers' views and business school rankings are used at the Business School and University levels, but they do not directly affect the evaluation of individual performance measurement.

The position of professors in the A&F Group in Manchester was very different to the lecturers/senior lecturers, with 65% having worked there for more than seven years and most had held other (more junior) posts in Manchester before being promoted to professor.

The importance of journal rankings has been increasing in MBS since our fieldwork, partly due to the nature of the new REF. However, there continues to be some resistance to the use of journal rankings within A&F.

For this purpose, we can include the tenure decisions as a form of promotion.

As will be mentioned below, these appraisals are now called Career Development Reviews.

More recently this has changed, particularly since the tenure track system was introduced for new employees.

This includes the scores rather/highly/completely formal (values 5, 6 and 7) on a seven-point scale, ranging from completely informal = 1 to completely formal = 7.

However, this is now changing, due primarily to the increasing emphasis on journal ranking in the new REF.

However, in 2010 some academics with permanent positions were more or less ‘forced’ to leave the FEB.

The research output certainly increased over those 10 years. In 1998, seven members of the A&F Group were involved in writing the 11 papers for international journals, whereas in 2008 there were 34 papers written by 15 staff members. Over that period, the number of staff in the A&F Group did not change significantly.

The British Accounting Review Research Register, which is published every two years, lists the accounting staff in each UK university together with their publications in the two preceding years. The figures shown in the text relate to the publications in international journals shown in the 2010, 1998 and 1990 Research Registers, based on the entry for the Manchester Business School in 2010 and for the combined entries for the Manchester Business School, UMIST School of Management and MSAF in 1998 and 1990.

On a 1–7 scale, in Groningen 43% of the respondents were 5 (rather positive) – there was no 6 or 7, in Manchester 27% were 5 and 5% 6 (very positive) – there was no 7.

And from 2012 largely through the fees paid by students.

Although from 2011, teaching inputs will again become important.

At the time of writing, this danger has been recognised in the Manchester Business School and, rather than relying on journal rankings to assess publications for the forthcoming REF (the successor to the RAE), a system of peer reviews is being developed, in which colleagues within specific subject areas will evaluate the publications to be included in REF 2014.

Additional information

Notes on contributors

Henk J. ter Bogt

Paper accepted by Markus Granlund.

Robert W. Scapens

Paper accepted by Markus Granlund.