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ACCA Strategic Professional · Advanced Performance Management · Performance optimisation in specific contexts

A university department receives funding from government, students and research sponsors. The head wants to reward lecturers for performance, but a pay scheme based only on exam pass rates is rejected by the staff. What is the main risk of such a scheme in this context?

The main risk is dysfunctional behaviour: lecturers may lower standards or inflate grades to raise pass rates, so the measure improves while real educational quality falls. Linking pay to one narrow, easily manipulated outcome measure distorts behaviour away from the department's broader objectives.

  1. AIt may encourage lowered standards or grade inflation to boost the measured resultCorrect
  2. BIt will make the performance information too difficult to audit
  3. CIt will cause an increase in the number of conflicting stakeholders
  4. DIt will prevent the use of any non-financial measures

Explanation

When reward is linked to a single narrow measure, staff may manipulate behaviour to achieve it, such as easing assessments, which damages the real objective of educational quality. This is a classic dysfunctional behaviour problem. Pass rates are easy to audit and the scheme does not create stakeholders or ban other measures.

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