This paper identifies and analyzes the types and numbers of unintended impacts—actual or potential—of state performance funding policies on higher education institutions. The authors conducted telephone interviews with senior administrators, mid-level academic and non-academic administrators, and department chairs at nine community colleges and nine universities in three states: Indiana, Ohio, and Tennessee. This paper discusses the types of unintended impacts that interviewees reported as resulting from performance funding programs, making a distinction between impacts that the authors judge as actually occurring and ones that were stated as possibilities.
The unintended impacts most frequently mentioned were restrictions in admissions to college and a weakening of academic standards. Besides documenting main trends, the authors also analyze how interviewee responses varied by state, by type of institution (community college or university), by institutional capacity to respond to the demands of performance funding, and by position the interviewee held in the institution. The paper closes with policy recommendations to address these unintended impacts.