Performance Funding Frequently Asked Questions
What is the Tennessee performance funding program and what is the Tennessee Higher Education Commission's role?
The Tennessee performance funding program is truly a performance-based incentive program that financially rewards public colleges and universities for successful institutional performance on selected student outcomes and related academic and institutional assessments. Consistent with its traditional mission, the Tennessee Higher Education Commission (THEC) has been assigned responsibility for administering the program.
How did the performance funding program come about?
The performance funding program was established in 1979. The program addressed public policy concerns regarding the need to strengthen Tennessee’s public higher education system and make institutions more competitive in the region as well as from a national perspective. The ultimate goal of the performance funding is to promote the provision of the highest quality of higher education to Tennesseans enrolled in higher education throughout the state.
Is Tennessee the only state with a performance funding program?
A recent study by Burke and Modarresi (2002), noted that 19 states had implemented performance funding policies and nine more were almost at the adoption stage in 1999. South Carolina, Kentucky, Arkansas, Missouri, Texas, and New Mexico are among the states that are linking funding to retention/graduation rates, placement of graduates, and rates of transfer to four-year institutions. However, no other state has been as prescriptive as Tennessee of developing an accountability system that incorporates common standardized assessments across programs and institutions, and that bases funding levels on specific test scores and student and alumni satisfaction ratings.
What is the role of the governing boards with regard to performance funding?
The Tennessee Board of Regents (TBR) and the University of Tennessee (UT) as system governing boards are committed to academic excellence and institutional quality and actively support the coordination and administration of the performance funding program. TBR and UT are also participants in the development of the performance funding standards and assessments.
What types of information is collected in the performance funding program?
Approximately 60% of the indicators are devoted to student performance and satisfaction. The remaining 40% focus on academic program and institutional indicators. Provided below is a summary of the student and institutional indicators:
Student Performance and Satisfaction Indicators
- Performance on general education exams
- Pass rates on licensure exams
- Performance on subject field exams
- Student and alumni satisfaction
Program and Institutional Indicators
- Academic program quality (undergraduate and graduate programs)
- Number and percent of accredited programs
- Employer satisfaction
- Retention rates (freshmen and transfer students)
- Graduation rates
- Number of transfer students
- State Strategic Planning Goals (teacher education, distance learning/technology, continuing education, collaborative initiatives; and faculty development)
- Institutional Strategic Planning Goals (research funding, public service, student/faculty diversity)
How much money can colleges and universities get from performance funding and where does this money go?
Institutions are capable of earning up to 5.45 percent of their state operating appropriations. The program is based upon a point scale from 0 to 100, depending on institutional performance on assessment standards during an academic year (100 points would achieve the maximum of 5.45 percent). These performance funding dollars are made available to the college’s general fund to be used for institutional priorities at the discretion of the institution.
Why doesn't THEC just give the money to colleges?
The money resulting from performance funding is not a gift; these financial resources are earned for meritorious performance. This program is a rare incentive opportunity for institutions to earn resources above and beyond formula-based appropriations.
How do students benefit from the performance funding program?
Students are the direct beneficiaries of performance funding in two major ways. First, improvements generated from assessment results are focused on improving the quality of instruction and academic performance; such improvements directly and positively impact students. Second, resources earned through the performance funding program enable institutions to fund additional improvements and needs, such as instructional equipment and supplies, beyond operational budgets.
What does THEC expect of faculty in the performance funding program?
THEC expects that faculty are aware of the overall performance funding program, especially as it relates to assessment of students and academic programs. In addition, faculty need to be active participants in scheduling, conducting, and use of associated assessment as it relates to their areas of responsibility.
What does THEC expect of colleges and universities in the performance funding program?
THEC expects colleges and universities to use this program to improve institutional programs, services, and operations, especially those related to student outcomes and performance. It is also expected that colleges will be able to provide a high quality level of education to Tennesseans across the state, based on the assessment results.
