Table Of ContentQU
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UniversityofAlbertaLibrar
CANADIANS
FEB 19
(99g
EncouragingExcellence
andRewardingSuccess
in Alberta’s public
adult learning system
A Proposal for implementing a
Performance Funding Envelope
A
beria
ADVANCED EDUCATION AND
CAREER DEVELOPMENT
DECEMBER1996
UNIVERSITYLIBRARY
UNIVERSITYOFAl Rprta
3 053 7
Encouraging Excellence
and Rewarding Success
in Alberta’s public adult learning system
A Proposal for implementing a Performance Funding Envelope
Contents
Background-
1
Current status ofthe funding envelopes - 2
Implementation ofaPerformance Envelope- 3
Theperformance rating calculation -4
The indicators - 5
General notes abouttheperformance ratingcalculation- 8
Determining financial rewards - 1
Performance calculation: Key performance indicators - 1997-98 - 11
The next steps: furtherconsultation- 1
Questions - 1
Appendix I: Indicatordescriptions - 1
Appendix 13: The performance rating calculation in practice - 1
Appendix El: Program clusters - 21
Foradditional copies ofthis proposal contact:
System Finance and Information
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Edmonton, AlbertaT5J 4L5
Telephone: (403) 427-5603
To beconnectedtoll-freecall 310-0000.
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Encouraging Excellence
and Rewarding Success
in Alberta’spublic adult learning system
A Proposal for implementing a Performance Funding Envelope
This documentis the latest in aseries ofreports andcorrespondence from Advanced
Education and CareerDevelopment aboutthe developmentofanew funding mechanism
forAlberta’s post-secondary education system. This document:
• reports on the status ofthe various funding envelopes thathave been established as
part ofthe performance-basedfunding mechanism; and
• presents aproposal forthe implementation ofaPerformanceEnvelope toencourage
andreward excellence inAlberta’spublic adultlearning system.
Background
In October 1994, following extensive consultation, JackW. Ady, MinisterofAdvanced
Education and CareerDevelopment, announcedanewpolicy frameworkto meetthe
learning needs ofadult Albertans.
One strategy inNewDirectionsforAdultLearning inAlberta related to the provision of
funding to institutions through anew mechanism that rewards performance in providing
accessibility, quality and relevance to learners atthe lowestpossible cost.
To develop such afunding mechanism, we researched otherjurisdictions and consulted
with Alberta’s post-secondary institutions and with organizations associated with post-
secondary learning in theprovince. Comments were invited on anumberofdiscussion
papers preparedby the department, which outlined proposals for afunding mechanism.
Basedon the feedback received, anew funding mechanism was developed, consisting of
two main parts:
1. A general operations granttofundprogramdelivery, administration and general
infrastructurerenewal requirements within each institution’s mandate. The grant
willbe tiedto the department’sbusiness plan and institutional performance.
2. Performance-driven “envelopes” thattargetfunding
a) torewardperformance in meeting Alberta’s goals for adult learning, and
b) assist and act as incentives forthe adultlearning systemto make changes
in support ofsystem objectives.
1
The diagrambelow illustrates the funding mechanism.
Fundingtomeet
systemobjectives
Current Level ofFunding
Fundinginfluenced
byperformance
Current status of the funding envelopes
TheAccessibilityEnvelopewas conceived as asuccessortothe Access Fund. In 1994-
95 the Access Fundwas createdto increase students’ access to learning opportunities by
adding, overthreeyears, 10,000 new studentplaces at acostof$47 million. By 1996-97,
plans were in place to establish more than 10,000places at an ongoing cost of$26
million. Owing to the successful results ofthe Access Fund, the fundwas suspended and
the implementation ofan Accessibility Envelope has been postponedforthree years. The
Accessibility Envelope will be activated when enrolmentdemands warrant its
implementation.
TheInfrastructure RenewalEnvelopewill fund, on amatching basis, investment in
approved equipment andlong-termprojects such as the upgrading andreplacement of
equipment and facilities. No new construction is supportedin the department’s current
businessplan. Beginning in 1996-97, the department secured $5 million in new funding,
reallocated $3 million fromthe Access Fund (for 1996-97 only) and secured $5 million
fromLotteries (for 1996-98) to supportupdating ofequipmentused forlearning. Overall,
$23 million will beprovided over 1996-99. Grants will be on aone-time, specific basis
and will match an institution's income from othersources such as endowments and the
private sector.
2
The LearningEnhancementEnvelopeencourages innovation toenhance the quality
and availability ofadult learning in Alberta. This will be achievedthrough integration of
technology to the learning-teachingprocess, both on andoffcampus. Beginning in the
1996-97 fiscal year, the departmentwill reallocate $10 million annually fromthe Access
Fundforathreeyearperiod.
The Research Excellence Envelopewas implemented to supportresearch excellence.
Beginning in the 1996-97 fiscal year, $2 million will be reallocated annually fromthe
Access Fundforthreeyears.
The Performance Envelopeis intendedtorewardperformance andpromote excellence
in ouradultlearning systemby linkingfunding toperformance. In June 1996, the
Minister announcedtheplanned implementation ofthis envelope. The Performance
Envelope will stimulate post-secondary institutions’ progress towards achieving the
system-wide goals ofaccessibility, responsiveness, affordability, research excellence and
accountability. It will be the main instrumentofadjustmentforthe general operations
grantto the institutions. Albertawill be the firstjurisdiction in Canadato implement
such amechanism.
Beginning in 1997-98, $15 million in new funding will beprovided through the envelope.
A
further $15 million will be distributed in 1998-99. Institutions will also contribute one
halfofonepercent oftheiroperations grants in 1997-98 and 1998-99. Itis proposedthat
each institution wouldreceive aminimum award of 1.5 percent for 1997-98 and 1998-99.
Implementation of a Performance Envelope
Funding fromthe Performance Envelope to an individual institution willbe afunction of
each institution's progress towards achieving the goals forthe adult learning system:
accessibility, responsiveness, affordability, research excellence and accountability.
Progress will be measured by selectedkey performance indicatorresults as comparedto
benchmarks ofhighperformance.
Aproposedmethodfordeterminingtheperformance ratingcalculation using key
performance indicators is presentedin this paper.
Key Performance Indicators
DevelopmentofKPIs hasbeen aconsultativeprocess among institutions and the
department. In October 1993, the departmentpublishedAccountability: Expectations of
thePublicPost-SecondarySystem as adiscussion paperto initiate developmentofa set
,
ofKPIs. Thepaperproposedthree steps:
(1) agreement on areas to measure andthe indicator set;
(2) developthe definitions andmethodologies; and,
(3) collectthe data andpublish theresults.
The Information ReportingExchange Project (IREP) was initiatedto establish data
definitions forreporting KPIs. In the fall of 1995, apilotphase ofdatacollection was
begun. KPIreportingmanuals were distributed in May 1996 tobegin the secondround of
datacollection to ensure comparability.
Currently, the Office ofthe AuditorGeneral, atthe request ofthe department andpost-
secondary institutions, is completing a“specifiedprocedures audit” ofselected KPIs
across six institutions. Feedback will be consolidated and distributed to institutions in
A
January. first annual reportby the Ministeron the status and health ofAlberta’spost-
secondary system, as describedby KPIs, is plannedforearly in the 1997-98 fiscal period.
Benchmarks
Toprovide thepropercontextin which KPIs can be compared, benchmarks ofexcellence
andhigh performanceneededtobe established. Benchmarks are definedas bestknown
business practices indicating superiorperformance. Benchmarks are adopted as targets
foroptimal organization performance.
AdvancedEducation andCareerDevelopmentpublished adiscussion paper. Benchmarks
forAlberta’sPost-secondaryEducation System, inJuly 1996. The documentpresented
some ofthe underlying principles andchallenges thatneedto be considered in the
developmentofbenchmarks. In general, institutions supportedthe followingprinciples:
• Performance is acombination ofperformance againstself, comparison against others,
andcomparison relative to a standardofexcellence.
• Institutions wanttobebenchmarked against superiorperformance.
• Where relevant, institutions wouldbe differentiatedbased on size, mandate and
geography.
• Determiningthelevel ofcomparison foraparticularindicator woulddepend on
whetherthe indicatoris relatedtoprogram.
• In general, with the exception ofthe research indicators, benchmarking wouldfirst
occurbased on Albertaexperience, due to the lackofexternal data.
• Determining whetheran indicator wouldconsistofyear-to-year, multi-yearaveraging
orbecorridor-based would dependon the statistical properties ofthe indicator.
The performance rating calculation
Each institution wouldbe given aperformance rating: 1, 2, or 3 foreach indicatoras
well as an overall performance rating. Foreach indicator, institutions with the highest
rating wouldbe given a“1”, those with the second highestrating, a “2”, andthose with
thethirdhighestrating, a“3”. The rating wouldbe directly linkedto aperformance
award.
Theperformance rating calculation proposed andpresentedon page 11 reflects the
concepts ofprevious discussion papers. However, the PerformanceEnvelope will now be
subdivided into twocomponents: learning andresearch. All institutions will be eligible
for an award from the learning pool. Progress towardresearch excellence will be
measured foruniversities only.
The indicators
The performancerating calculation on page 11 shows the indicators we areproposing be
usedfor 1997-98 and 1998-99 as well as the weighting assignedto each. Immediately
following is achartthat lists the specific years ofdatarequiredforeach indicator. The
intention is to fixthe calculationfor 1997-98 and 1998-99, in the interests of
predictability and stability. Fine-tuning may takeplace, butthe indicators wouldnot
change. Forexample, one areathatrequires furtherworkis activity associated with
brokeragedprograms and institutional collaboration.
Throughoutthe consultations, we heardthatthe measurements relative to benchmarks
should take into consideration differences among institutions owingto size, geography
andprogram mandate; thatit shouldbe simple andeasy tounderstand; andthatcorridors
andmulti-yeardatashouldbe used whenpossible. As well, we heard itis necessary to
acknowledge an institution’s current standing orperformance.as well as improvement
from oneyearto the next.
The following section provides an overview ofthe indicators used foreach goal. In
choosingthe indicators, we used several criteriaincluding simplicity, explanatory power
in measuringprogress toward goals andobjectives, reliability, understandability and
comparability.
The learning component of the Performance Envelope
Accessibility
Goal The system will increase access for motivated Albertans to a diverse range of
quality learning opportunities.
Two indicators would beused:
• Full-time equivalent (FTE) creditenrolment; and
• completion rate.
CreditFTEhas been used as ameasure ofenrolment across Canadaforsome time.
Definitions are sufficiently refinedforcomparability. Itmeasures institutions’ relative
effortto provide access to credentialedprograms.
While access to learning is important, it is also importantthat students graduate within a
reasonable time period. No standard ofachievementforcompletion rate has been set.
Public policy preferences are notclear: some argue thatopen access andcompletion of
some portion ofadiplomaor degree program is betterthan no exposure at all; others take
the view that, to be meaningful, access to learning must lead to completion ofaprogram
ofstudy. Nonetheless, given entrance requirements, it is reasonable to expect institutions
to improvecontinuously theircompletion rate, while maintainingprogramquality.
Completion rate is given about one quarterofthe weight ofCreditFTE; institutions are
therefore not encouragedto tighten entrance requirements atthe expense ofaccess.
Discussion is required as to whetherthis indicatorhas been sufficiently developed to be
used atthis stage. Options may benecessary.
Eventually rolling three-yearaverages would be usedforboth CreditFTE andcompletion
rate to minimize the effectofyear-to-year-fluctuations.
Responsiveness
Goal The system will increase its responsiveness to the needs of individual learners
and to the social, cultural and economic needs ofthe province.
Two indicators wouldbe used:
• student satisfaction; and
• employment.
Both measures are theproduct ofinstruction. While there is ageneral expectation that
people will gain social andcultural benefits fromtheiradult learning, especially from
university level programs, mostAlbertans expectthat, at aminimum, theirlearning will
provide them with skills andknowledge to participate in the economy. The graduate
employmentrate is aproxy measure ofinstitutions’ success in meeting this expectation.
The social andcultural outcomes, while important, have notbeen clearly articulated. The
general satisfaction ofgraduates is intended to capturethe degree ofsuccess thatthey feel
institutions have achievedrelativeto these expectations.
Affordability
Goal The system will provide quality learning opportunities tothe greatest number of
Albertans atthe lowest possible cost.
Two indicators wouldbe used:
• cost perfull-time equivalent student (Cost/FTE); and
• instructional expenditures as apercent oftotal operations expenditures.
The first is ameasure ofefficiency ofprogram delivery. It is the costthatmustbe
supportedby taxpayergrants, tuition and otherrevenue sources. The second indicatoris
intended to capture the expectation thatresources will be allocated, first and foremost, to
the learning function.
The indicators wouldeventually encompass three-yearrolling averages to minimize the
effectofyear-to-yearfluctuations.
