Does performance funding framework provide incentives for better outcomes?

The National Tertiary Education Union (NTEU) warned that the measures for distributing $80 million in performance-based funding announced today by the Minister for Education, Dan Tehan, will have many foreseeable, albeit presumably unintended, perverse consequences.

1. Graduate employment outcomes

The creation of jobs is beyond the control of universities and is a function of business and government. Including graduate employment rates gives universities an incentive not to enrol students in fundamental courses essential to the community that have either traditionally higher drop-out rates or low labour market demand.

NTEU President Dr. Alison Barnes said “If the job outcome is not linked to the learning, we may see the perverse outcome of many more lawyers being qualified, but working in fast food outlets.”

2. Student experience and success rates

Including measures such as first year student drop-out rates and student satisfaction scores will see university staff come under greater pressure to improve pass rates and consequently reduce quality and threaten the reputation of the Australian university sector.

Research has shown that student satisfaction surveys do not reflect teaching quality and are known to contain inherent bias. The linking of outcomes in these discredited surveys to funding will increase pressure on academics to lower pass marks and include fashionable and popular content regardless of its academic merit.

3. Enrolment of Indigenous, disadvantaged and rural students

NTEU supports measures that encourage universities to enrol more students from under-represented groups, however, given their traditionally high drop-out rates they must be exempted from the drop-out rate measure.

“While the sector was calling for a simple and robust model, the expert panel has delivered anything but,” said NTEU National President Dr Alison Barnes today.

“We are concerned that the model’s distribution mechanism is unnecessarily complicated and opaque.”

“NTEU believes that performance-based funding should be tied to real measures of input and output within the control of the university that genuinely reflect the quality of the performance. Such measures might include the level of insecure employment amongst the academics who teach students, the depth and range of student academic and welfare support services provided, and student progression rates.”

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