Performance indicators in Australian universities: establishment, development and issues

This paper presents the findings of a project investigating the intended and unintended consequences of the contemporary performance driven environment in the Australian higher education sector (AHES) focusing on the performance mechanisms used and the performance information required. It is argued that the establishment of a performance-driven, market-oriented university system in Australia has created a context in which fiscal and economic performance indicators have become dominant in understanding the 'performance' of the AHES and of individual university's activities. This paper analyses the AHES policy environment since the mid 1980s and outlines Australia's performance-based funding approach to universities. The contribution of universities to the nation's economy and the developing benchmarks and performance indicators (PIs) used for annual reporting at system and institutional levels are described. Several key issues are identified as arising from contemporary government policies. These are: (1) the relatively short period for the government to move from full funding to partial subsidisation of universities and the longer term sustainability of this shift; (2) the distortion in the balance of disciplines and mix of students; (3) the quality of academic work within universities and the roles and workload of staff; (4) the reliance on traditional business accrual financial reporting frameworks, which are confined to financial monetary items; and, (5) the recent move to develop more sophisticated PIs relating to intangibles, 'value-added' and educational impact. These issues form the basis for the suggested future research agenda. The growing perception of the value of knowledge within society, in particular for the economic welfare of a country and its industry, make the successful development and use of PIs in the AHES imperative. These issues touch the core of university purposes and operations and need thought and resolution to ensure the long-term success of Australian public universities.