Using performance-based funding to incentivize change

doi:10.3768/RTIPRESS.2015.OP.0020.1501

Paper

Using performance-based funding to incentivize change

Published Jan 20, 2015 · Steven Klein

UNKNOWN SJR score

5

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1

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Abstract

Performance-based funding is a resource distribution strategy used in education to reward service providers for the outcomes they achieve. Institutions that produce above-average results earn additional financing, while those that fall short may face funding reductions and may be targeted for technical assistance to address their performance shortcomings. Efforts to introduce performance-based funding in education frequently encounter resistance from program administrators and their staff, who, among other objections, fear the application of competitive funding may unfairly penalize programs serving low-performing students. This paper describes how performance-based funding systems can be incorporated into state education resource distribution formulas to incentivize improvements in educational services, and presents a seven-step process that RTI has developed to build stakeholder support for system adoption. It draws on RTI’s years of experience working with state education administrators to create funding formulas that allocate federal and state funds— equitably and objectively—to the most effective service providers.

Study Snapshot

Performance-based funding in education can incentivize improvements in educational services and build stakeholder support for system adoption, despite initial resistance.

PopulationOlder adults (50-71 years)

Sample size24

MethodsObservational

OutcomesBody Mass Index projections

ResultsSocial networks mitigate obesity in older groups.

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Using performance-based funding to incentivize change

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References

Performance Based Funding in Higher Education

Performance-based funding models align with state goals and priorities, providing incentives for colleges to help students successfully complete degree programs.

Implementing Performance Funding in Three Leading States: Instruments, Outcomes, Obstacles, and Unintended Impacts

Performance funding in higher education can improve student outcomes, but faces obstacles and unintended impacts, such as restrictions in college admissions and weakening academic standards.

Unintended Impacts of Performance Funding on Community Colleges and Universities in Three States

Performance funding policies can have unintended impacts on higher education institutions, leading to restrictions in admissions and weakening of academic standards.

Popular but Unstable: Explaining Why State Performance Funding Systems in the United States Often Do Not Persist

State performance funding for higher education often fails due to higher education opposition, inadequate consultation, high implementation costs, and political resistance.

To Keep or Not to Keep Performance Funding

Performance funding for public colleges and universities has both popularity and instability, with some states maintaining it and others abandoning it, and this study aims to identify characteristics that distinguish stable from unstable programs.

Citations

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Local workforce investment areas can support degree completion through federal mandates, local partnerships, and staff knowledge, while balancing federal constraints with local priorities.

Exploring the Rationale of Performance Based Funding for Malaysian Public Universities

Performance-based funding is suitable for Malaysian public universities, but government issues need to be addressed before it can be successfully implemented.

An investigation into the Libyan Government policies relevant to financial resource allocation for public universities : an exploratory study

Libyan public universities' operations depend on government funding and resource exploitation, with factors like legislation, restrictions, and lack of government encouragement affecting resource allocation decisions.

Improving Institutional Report Card Indicators.

Institutional report cards can provide valuable information for consumers, but require improved transparency and meaningful data for effective accountability and performance evaluation.