Decision Utility of Productivity Indicators at the Campus Level

In today’s higher education environment, costs are increasing, tuition is increasing, subsidies are decreasing, student attrition is extensive, and global competition is increasing. These and other internal and external factors in higher education have created a mounting interest in productivity indicators, the ratio of outputs divided by inputs (Hanushek, 2007; Harris, 2010; Levin, 1993; Massy, 2011; Massy & Wilger, 1992; NCHEMS, 2010; Vedder, 2004). Leaders in higher education as well as external governing bodies are increasingly using productivity indicators to create systems of transparency and accountability. Despite the increased focus on productivity and productivity indicators, little has been done to assess the decision utility of productivity indicators for campus level decision makers.

The purpose of this study was to assess the decision utility of selected instructional productivity indicators as seen by key campus level administrators. Data were collected through a survey created by the researcher from Presidents, Chief Academic Officers, Associate/Assistant Vice Presidents directly tied to teaching activities, Chief Financial Officers, and the senior member of institutional effectiveness/research offices (typically Directors of Institution Effectiveness) at nonprofit, regionally accredited higher education institutions in Tennessee. Four domains were identified to assess the decision utility of each productivity indicator: the importance for resource allocation decisions; the importance for institution trend analysis; the importance for internal accountability; and the importance for external accountability.

A number of conclusions were drawn from the findings of the study. First, the lack of statistically significant differences in the importance level assigned to the any of the indicators suggested general agreement across the population about the decision utility of the indicators. Second, not only was there general agreement in the importance level assigned to the indicators, eight of the nine indicators included in the study were of relative importance to respondents and returned a scaled ranking between “Important” and “Of Strong Importance” for overall decision making. Third, although increases in staffing levels have been identified as a cause of cost increases in higher education, the primary productivity indicator of staffing, Degrees/Back Office Employee, was ranked the lowest across groups.