Performance Measurement in Universities: A Comparative Study of Two A&F Groups in the Netherlands and the UK

Abstract

Traditionally, the management of universities has been relatively informal and, to a large extent, the responsibility of academics. However, with the rise of New Public Management in the 1980s, and its introduction of rational, ‘businesslike’ management into the public sectors of most Western countries, many universities have made various changes in their management and control systems. For example, in many countries university funding is now much more dependent on ‘performance measures,' with such things as journal rankings, research assessments, teaching quality audits and so on. In this paper we describe a study we conducted in our own two universities; i.e., the Accounting and Finance groups in Groningen and Manchester. The objective of this research is to explore the reasons for the similarities, and more importantly, the differences in the use of performance measurement systems in the two universities. Our research is informed by recent developments in institutional theory which have begun to explore the internal processes through which organizations respond to external institutional pressures. The aim is to examine how the institutional pressure for more performance measurement in universities in general is reproduced in terms of performance measurement systems within the specific universities and how these systems impact on individual departments and the academics working within them. Although there are differences, the perceived effects of the new performance measurement systems appear quite similar in both cases. For example, individual academics understand and probably to some extent positively welcome the new more ‘rational and objective’ systems, but these systems also create uncertainty, stress and, in some instances, even anger and frustration. In the past, resource allocation and performance measurement were relatively implicit and subjective, but they were largely developed and ‘owned’ by the academics themselves, and were a part of their ‘group culture’, whilst nowadays the systems are imposed from higher levels of the faculty and/or university. It seems that adding elements of rationality and objectivity to the systems does not necessarily reduce uncertainty and stress; more likely it can even add to them.