Effects of an Incentive Based Budgeting System on Institutional Performance Indicators

Download or read book Effects of an Incentive Based Budgeting System on Institutional Performance Indicators written by Michael S. Willett and published by . This book was released on with total page 170 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this exploratory longitudinal case study was to examine how the implementation of an Incentive Based Budgeting (IBB) system (i.e., Responsibility-Centered Management [RCM]) affected selected institutional performance indicators at the campus level and two comparable schools at a large Mid-Western public University. The value of addressing this problem was in applying the theory that an IBB system can lead to measurable changes in outcomes. The theoretical constructs that guide RCM, and that are consistent with experiences within an RCM environment, drive the outcomes from its implementation. These outcomes can lead to modifications in the implementation of RCM, or the perceived expectations of RCM, providing useful information to budget administrators. Performance indicators identified by the literature were referenced with measurable IBB outcomes. Longitudinal performance data were analyzed over a 23-year period at the flagship campus and two comparable schools within the campus system. Analysis of the data revealed significant differences between multiple pre- and post- RCM performance indicators as well as significant trending for other selected performance indicators. The main findings suggest that in most instances the application of the RCM model produced the expected results to address student needs and services. RCM had a significant measurable effect at the campus level illustrated by increases in financial assistance per student, increased funds for quality instruction and decreased teaching loads. Findings for the two comparable schools examined indicates that the application of the RCM model impacted the schools in similar ways with the exception of a significant difference between post- RCM performance indicators for total credit hours and total operating expense. These findings indicate that RCM facilitated increased total credit hour growth as well as total operating expenses post- RCM implementation for one of the schools. These differences were attributable to a shift in market interest impacting both schools. The implications of this study are important for higher education budget administrators that implement, or are considering implementing, an IBB system. These findings should be of interest to administrators when considering the selection and use of measurable institutional performance indicators as a means for assessing outcomes or in institutional decision-making.