Performance measurement in universities

Universities have traditionally possessed as their primary objectives the pursuit and the transmission of knowledge. During the 1980’s, financial pressures on British universities have greatly increased, all budgets being cut in real terms, dramatically so for a handful of universities. The current emphasis on effectiveness and efficiency has naturally led on to a thorough examination of measures of performance. What is the organisational effectiveness of a University (and of a constituent department) and how do we measure it? Universities may be regarded as offering three major categories of output: (i) highly qualified manpower; (ii) research and scholarship; (iii) various other social benefits e.g. contribution to ‘national culture’ or valuable contributions to the life of their local communities. Clearly some of these outputs are much easier to measure than others. The paper will examine the methods used to measure output and to relate categories of output to the relevant inputs, including the concept of ‘the social rate of return’. Performance indicators will be included under three major categories: (i) Internal, e.g. first degree graduation rates, success rates of higher degrees, attraction of research funds. (ii) External, e.g. acceptability of graduates in employment, staff publications, patents. (iii) Operating, e.g. unit costs, staff/student ratios, staff workloads. The third category includes a number of traditional problem areas for OR/MS work such as establishing service levels for libraries and computer systems. The overall approach clearly possesses considerable implications for the whole philosophy and culture of universities and for individual members of staff. The paper will touch on these aspects too.