Research News

UW’s Hillman explains, ‘Why Performance-Based College Funding Doesn’t Work’

May 27, 2016

A new article by UW-Madison’s Nicholas Hillman is critical of policies that link state funding of public higher education to certain performance measures.

The report, released by The Century Foundation earlier this week, is titled “Why Performance-Based College Funding Doesn’t Work.”

Nicholas Hillman
Hillman is an associate professor with the School of Education’s Department of Educational Leadership and Policy Analysis and is an affiliate of the Wisconsin Center for the Advancement of Postsecondary Education (WISCAPE)

More than two-thirds of states are either developing or using some sort of performance-based funding for public colleges and universities, with performance being tracked in areas such as graduation rates and degree production numbers.

Hillman, who has studied these performance-based formulas extensively, argues that this way of distributing 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 writes in the report. "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."

To learn much more about this important and nuanced topic, check out the entire report for free on The Century Foundation’s website.

• The Washington Post picked up on Hillman's report and published ​a news article headlined, "States that tie higher education funding to performance have it all wrong, report says."