Yu-Jen Tsen
Center for General Education TransWorld University yujent.law@gmail.com
Abstract
Education of high-caliber talent knows no boundary. To enhance the national compositeness, it is essential to break the mould of traditions and create innovations and creativity in the era of knowledge economy. Universities have grown far more complex in recent years in order to face increasing competition. However, there is a lack of objective and authoritative perform-ance indices available for colleges and universities. Hence, the redesigning and improvement of conventional performance management and control systems of colleges are a critical issue.
The main purpose of this research is to construct a set of performance indices for colleges.
First, we aim at functional and achievements target of the college performance evaluation system based on the theories and implementation references in knowledge management and performance evaluation. An explorative analysis was conducted to design a performance in-dices questionnaire for the evaluation of colleges, and re-examine the connotation of the questionnaire structure by referring to inputs from scholars. Finally, a questionnaire survey with in-depth interviews was conducted with five scholars who had been involved in plan-ning and evaluating the performance evaluation system of colleges. The structure of evalua-tion and indices of performance were revised accordingly. The suggested performance indi-ces of a college are divided into four dimensions: the benefit orientation of internal work, the service improvement orientation in teaching and curriculum, the benefit orientation of stu-dents and the market, the orientation of innovation and research, these four dimensions con-sist of 23 sub-dimensions and 85 items. We hope this coherent approach can serve as a refer-ence to future research.
Keywords: Knowledge Management, Performance Appraisal
Introduction
Globalization, competition and the calls for reforms impose many daunting challenges for higher-education institutes in terms of budgetary sources and alloca-tions, teaching quality and operational management. It is a critical issue to effec-tively evaluate performances so as to fa-cilitate the maximization of operational and managerial benefits. Tasked to educate talents, schools are on the forefront of the development of intellectual capital. Gener-ally speaking, schools are domesticated organizations, relatively stable and conser-vative, weak in adapting to environmental changes. Meanwhile, schools are also knowledge organizations, emphasizing the expertise and autonomy of educating pro-fessionals. This loosely coupled structure also undermines overall competitiveness (Chang, 2002). Therefore, the directions and strategies of educational reforms should be anchored on the characteristics of school education and the modern man-agement know-how, in order to enhance quality and functionality of university edu-cation (We, 2000). Stufflebeam (2000) suggested that assessment is a systematic review of the value/strength of any given project, plan, service or other subject mat-ter (translated by Huang Shu-dong, 2005:
334). The purpose is to determine the strength, value or importance of the re-viewed subject (Scriven, 1991). This can have significant influence over university education, learning subjects, and product quality. To effectively implement a
pleth-ora of policies and actively respond to external changes and meet with the needs of students and parents, it is important to redesign and improve the traditional per-formance management system and formu-late a new set of performance indices to facilitate the performance management of universities.
The 21st century is the era of knowledge economy. Intellectual capital has replaced labor and capital as the most important assets of companies. Conven-tional wisdom in management and strate-gies cannot cope with rapid changes and intense competition nowadays. Sustainable operations are only possible after effective transformations (Chang, 2002). These new managerial concepts mean schools, like companies, are increasingly becoming performance-driven. Whether performance management is achieved as expected de-pends on whether performances are evalu-ated properly. Hence, scholars are con-cerned with whether performance man-agement tools and construction method-ologies ensure professional standards in task performances. Most of the studies in Taiwan on reorganization are from the academics focused on corporate manage-ment. Only a small number of papers come from educational institutions. The majority of the studies on school reorganization in Taiwan are concerned with how educators and scholars perceive structural adjust-ments (Huang, 2002). These papers ad-dress issues such as school re-engineering (Lin, 2001; Wu, Lin, 2002) and the
rela-tionship between school re-engineering and knowledge management (Huang, 2003; Chen 2003; Chuang, Tseng, Chiu, 2005) and the construction of school indi-cators (Chuang, 1999; You, 2000; Chang, 2004; Chung, 2004; Yeh, 2004; Tsai, 2005), However, there is a scarcity of pa-pers examining the construction of school performance indices. Therefore, it is im-portant to build a timely and appropriate set of university performance indices able to reflect the effectiveness of strategies and targets. It is a trend in the era of inno-vative management, as well as a key driver of school competitiveness. It is one of the most critical issues in the educational re-form of Taiwan.
The innovation in the management of universities is more than just a concept, but also about actions and implementations (Wu, 2004). Peter F. Drucker says, “Inno-vate or Die”. In other words, developments are only possible with innovations. Com-petitiveness is only achieved via innova-tions. Universities have been at the focal point of educational reforms over the past decade and under the influence of man-agement concepts in the new century. Uni-versities have to constantly change and innovate to cope with challenges one after another (Tai & Pu, 2006). Also, the public has high expectations for educational re-forms in universities. There is an increas-ing emphasis on the option of education.
Universities are no longer “domesticated”.
Rather, they are exposed to market compe-tition. Therefore, universities have to
util-ize knowledge to create and innovate, in order to achieve competitive advantage and sustainable developments. In sum, this study aims to construct a performance evaluation system that translates the stra-tegic goals of universities into tangible action plans. The purpose is to provide a complete picture of college management and construct a methodology for compre-hensive performance indices. This will serve as a performance management tool for colleges and facilitate the achievement of strategic goals. This study performs an exploratory data analysis, with an initial focus on Taiwan. The construction of per-formance indices is based on literature reviews and such a framework will serve as a reference to theoretic foundations and implementation procedures for the study.
The next step is to submit the draft ques-tionnaire to the interviewees for a review, to ensure the hierarchical structure and contents are appropriate. Finally, this study gathers the feedback from the schools with the experience or know-how in college planning via in-depth interviews in order to construct or modify the list of college performance indices. The goal is to de-velop a set of performance review indices suitable to colleges and universities.
The educational environment has been increasingly complex due to the changing times. This means a different set of performance review indices is required.
Are the indices developed by the education authorities suitable for universities? Which are the appropriate indices? Which are the
outdated ones? In fact, there is no stan-dardized set of performance indices formu-lated by the education authorities. This makes it impossible to stay abreast of and respond to the rapidly changing environ-ment. In the knowledge economy, tradi-tional management concepts cannot adapt to the rapidly changing and highly com-petitive environment. In fact, the perform-ance evaluation mechanism for colleges and universities should aim to assist the creation of school value and maximization of operating performances. The planning of the performance evaluation is the start-ing point of the proper evaluation of formances. This can help to apply per-formance metrics into the management of colleges and universities and articulate the visions and goals of higher education insti-tutions. It will also help in the identifica-tion of potential obstacles in the imple-mentation process and assist in the elimi-nation or determielimi-nation of such obstacles.
This will guide the applications of the per-formance metrics and accumulation of planning experience to facilitate the estab-lishment of college performance indices by managers. It will benefit the growth of schools and satisfy the needs of parents and students. As a result, the details of the performance indices are better aligned with the goals and performance manage-ment in colleges and universities. In fact, performance indices can make up where the assessment mechanism set by the edu-cation authorities falls short of. In sum, the construction of performance indices is critical for the improvement of
manage-ment mechanism for colleges and universi-ties.
Therefore, this study aims to ex-plore the philosophies and methodologies in the construction of performance indices for colleges and universities in order to make up the inefficiency of conventional performance reviews. It attempts to iden-tify the strategic goals pertinent to schools on the basis of the management concepts in the knowledge economy. It will help to cope with the uncertainties and challenges of the business environment and assist educators to effectively monitor the per-formance reviews. Given a lack of the em-pirical studies concerning the construction of college performance indices, this study performs an exploratory data analysis to ensure the results meet the requirement of parents, students and education evaluation authorities. The first step is to review the literature in Taiwan and overseas concern-ing the concept of knowledge management evaluations and the construction of per-formance indices. This will serve as a ref-erence and benchmark to the theoretic and practical procedures of the overall research framework. Next, this study designs a questionnaire and conducts in-depth inter-views to ensure the list of college perform-ance indices are relevant, measurable and appropriate. This will assist in the im-provement of management in colleges and universities and set the tone for follow-up studies.
Literature Review
The traditional definition of per-formances can no longer interpret the modern implications of performances.
Also, the convention management tech-niques can no longer encompass modern management. Benjamin Franklin says that knowledge is the investment with the highest return. Management guru Peter Drucker positions knowledge as the new cornerstone for competition in the post-capitalism society (1993). This production factor is the most important resource in the globalized economy. To gain a deep un-derstanding of the effects of performance assessment and knowledge management on the integrated system, this study re-views the definitions, purposes, impor-tance, integration and trends of perform-ance assessment and knowledge manage-ment.
Performance Assessments
In the book “The Effective Execu-tive”, Peter Drucker explains that perform-ances are the direct outcome. Scholars in Taiwan and overseas have come up with their interpretations of performance ap-praisals. Performance appraisals are usu-ally a formal and structured system to evaluate, review and affect employees’
work-related characteristics, behavior and results. It is a way of discovery work ef-fectiveness and understanding whether better performances are achievable. The purpose is to benefit both employees and
organizations (Schuler, 1995). Evans et al.
(1996) suggested that performance ap-praisals are an element of management and control. Performance appraisals and per-formance management help companies to effectively manage, measure and control resources. In fact, performance evaluation is a measurement system that is combined with bonuses and compensations. In the short term, measurement serves to control daily operations and modify targets. In the long term, it is a tool for strategic man-agement, planning and achievement (Chu, 2005). Drucker also indicated that one of the basic tasks for managers is to evaluate and assess. Managers should establish measurement standards. Few other factors are as important as this one as far as per-formances of organizational members are concerned (Lin, 2002). Performance re-views and performance management usu-ally consist of four steps: the determina-tion of assessed contents, the selecdetermina-tion of appropriate assessment methods, the feed-back of the assessment results and the re-view of the assessment system (Schuler and Jackson 1996). Niven (2005) pointed out the issues concerning performance appraisals: (1) the restrictions of financial performance metrics; (2) the increase of intangible assets, often the factor that con-tributes to the success of an organization.
A new performance evaluation system is required to track the value of intangible assets so that it is possible to predict and drive future success; (3) challenges in stra-tegic implementations. To success, it is necessary to translate strategies into
ac-tions and detail the necessary tasks on a daily basis to all the members of an or-ganization. As a rule of thumb, 35% of the progress in the quality of strategic imple-mentations is relevant to 30% of the share-holders’ value. However, many organiza-tions are overly and almost exclusively focused on financial goals and as a result, they become disconnected with the im-plementations of the performance evalua-tion system and ignorant of the drivers of implementation strategies. In fact, it is necessary to start with visions and strate-gies by translating them into track-able performance assessments. Hence, the measurement of intangible assets should be incorporated because it is able to reflect the value-creation mechanism and resolve the issues associated with performance appraisals.
Knowledge Management
There are many definitions and classifications of knowledge but all schol-ars agree to the following: knowledge has replaced land, capital and labor and be-come the most important economic re-source in the information society (Drucker, 1989). In the 1990s, knowledge manage-ment started to attract attention. Knowl-edge management is a set of methods with which organizations utilize information technology. It is a process of gathering, organizing, storing, transforming, sharing and using knowledge in the context of organizational cultures and structures. This process ensures constant innovations and
regeneration of an organization. The pur-pose is to enhance productivity, increase assets and improve the capability of cop-ing with external change and constantly re-engineering (Wu, 2001). Therefore, or-ganizations should consider knowledge a most important asset and properly manage it (Senge, 1990; Drucker; Davenport et al., 1998). According to Wang et al. (2001), knowledge is an abstract term with many different meanings. Hence, there are many interpretations of knowledge management.
For example, there are perspectives based on strategies and leadership (with a focus on goals and procedures), knowledge con-tents and practical aspects (with a focus on knowledge and actions), technological aspects (with a focus on systems and tech-niques), change management (with a focus on integration and management) and or-ganizational reengineering (with a focus on transformations and reengineering).
Wang Cheng-Yen and Li & Chen (2001) consolidated the definitions by different companies, organizations, scholars and experts on knowledge management, and classified knowledge management into knowledge contents & practical aspects, technological aspects, strategy & leader-ship, change management and organiza-tional reengineering.
Broadly speaking, the measure-ment for knowledge managemeasure-ment within an organization is the process of investing in knowledge management, achieving tar-gets and return on investment. It is an as-sessment on outcomes in order to
under-stand the effectiveness and efficiency in strategic goal achievements”. The purpose is to set a benchmark for follow-up actions and improvements (Lin, 2008). Knowl-edge management pays particular empha-sis on human capital, i.e. the development of personnel expertise, in order to enhance productivity and innovation capability (Wang, 2000). Meanwhile, globalization and the competition to meet customers’
needs also force companies to treat em-ployees in the context of knowledge or-ganization by focusing on their career de-velopment and professional expertise. Of course, knowledge management requires consolidation, transfer and integration of the knowledge owned by different em-ployees in order to build up the intellectual capital of an organization. This is why companies are setting up the position of CKOs (Chief Knowledge Officers) who are responsible for knowledge manage-ment. Over the recent years, knowledge management has also been attracting atten-tion in educaatten-tional instituatten-tions. This is particularly important for the heritage of administrative experience because of the higher turnover of administrators. If the administrative work contents and proce-dures can be stored in computers, it can mitigate the problems caused by staff turnovers and maintain normal operations of schools. Some schools have set up knowledge management function and this is a good practice for other schools to fol-low (Chang, 2002).
Importance of Performance
Assessments and Knowledge Management
Companies and universities both pursue performances and growth. In es-sence, performance assessments are the control function of management. It has passive and active implications. The for-mer refers to the understanding of the status and progress of planning. In case of deviation to a certain degree, it is neces-sary to take corrective measures. The latter is the influence of guidance from manag-ers in decision-making and behavior via the establishment of a performance ap-praisal system ex-ante or in progress. The purpose is to align personal goals and or-ganizational targets. According to a recent study by Arian Ward on Hughes Aero-space, 15~20% of the management’s team is spent on searching for knowledge and responding to requests associated with knowledge. In terms of management and practices, knowledge is critical. Most im-portantly, it is necessary to leverage per-formance management and knowledge to create competitive advantages and values of colleges and universities. It is the key to success in the knowledge economy. The studies in Taiwan relevant to knowledge management and the construction of per-formance indices are as follows: Chen and Chen (2003), Su (2003), Yang (2004), Chang (2004), Tu (2005), Shih (2005), Lai (2005), Lin (2006), Wu (2006), Chen and Yang (2006), Hsu (2006), Peng (2006), Tsai (2007), Evaluation of Universities by the Ministry of Education (2007), Liao (2008).
The performance evaluation in the corporate world must be combined with the key success factors that guide through the achievement of strategic goals and visions. It is the same with the perform-ance evaluation of colleges and universi-ties. The assessment in knowledge-related factors is essential to the maintenance of the competitiveness of intangible assets such as diversified knowledge. In the knowledge-based competition, it is critical to ensure the capability in the development and utilization of intangible assets because such capability multiplies the effects of knowledge for both companies and sities. However, unlike companies, univer-sities are non-profit organizations. Knowl-edge is an intangible asset of schools.
Also, performances are the most priori-tized consideration because conventional financial metrics cannot fully reflect the value activities of the organizations.
Hence, the performances of colleges and universities are not solely based on finan-cial metrics. It is necessary to establish a comprehensive set of measurement tools to evaluate the achievement of missions and visions of schools. Therefore, to ensure sustainable growth and development of colleges and universities in the new cen-tury, it is necessary to devise a set of
Hence, the performances of colleges and universities are not solely based on finan-cial metrics. It is necessary to establish a comprehensive set of measurement tools to evaluate the achievement of missions and visions of schools. Therefore, to ensure sustainable growth and development of colleges and universities in the new cen-tury, it is necessary to devise a set of