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Critique of Performance-Based Funding

May 25, 2016

The Century Foundation on Wednesday published a report that is critical of state policies that link funding of public colleges with measures of their performance, such as graduation rates and degree production numbers. Roughly 35 states are either developing or using some form of performance-based funding for higher education.

The new report's author, Nicholas Hillman, an assistant professor of education at the University of Wisconsin at Madison who has studied such state-based formulas, argues that performance-based funding is rarely effective.

"While pay for performance is a compelling concept in theory, it has consistently failed to bear fruit in actual implementation, whether in the higher education context or in other public services," Hillman wrote. "Performance-based funding regimes are most likely to work in noncomplex situations where performance is easily measured, tasks are simple and routine, goals are unambiguous, employees have direct control over the production process, and there are not multiple people involved in producing the outcome."

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Paul Fain

Paul Fain, Contributing Editor, came to Inside Higher Ed in September 2011, after a six-year stint covering leadership and finance for The Chronicle of Higher Education. Paul has also worked in higher ed P.R., with Widmeyer Communications, but couldn't stay away from reporting. A former staff writer for C-VILLE Weekly, a newspaper in Charlottesville, Va., Paul has written for The New York Times, Washington City Paper and Mother Jones. He's won a few journalism awards, including one for beat reporting from the Education Writers Association and the Dick Schaap Excellence in Sports Journalism Award. Paul got hooked on journalism while working too many hours at The Review, the student newspaper at the University of Delaware, where he earned a degree in political science in 1996. A native of Dayton, Ohio, and a long-suffering fan of the Cincinnati Bengals, Fain plays guitar in a band with more possible names than polished songs.

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