In 2007, Washington State launched an innovative performance incentive policy for community colleges, called the Student Achievement Initiative (SAI). The purpose of the SAI is to use data and performance funding to motivate colleges to implement systemic changes in practice that lead to improved student outcomes. The SAI seeks to address some of the key shortcomings of previous state higher education performance incentive policies and so has attracted a lot of interest from policymakers and funders nationally. By drawing on initial observations from our ongoing evaluation of the SAI as well as knowledge about earlier generation performance funding policies attempted elsewhere, this brief aims to inform the conversation currently going on in many states about using state policy levers to meet ambitious state and national goals for increased college attainment. To that end, this brief calls particular attention to a number of policy choices that the Washington community and technical college system faced as it designed and began to implement the SAI across its 34 colleges. These are some of the same key choices policymakers and college leaders in other states will confront should they begin to design and enact performance incentive policies as means to improve community college student outcomes:
- Complexity in the measurement framework: What is the best way to balance simplicity and comprehensiveness in selecting the specific measures to use in a performance incentive system that rewards intermediate milestones as well as completions?
- Nature of attainment data to be reported: Should cross-sectional or longitudinal student data be used to compute achievement points? If cross-sectional data are used, how can they be connected to longitudinal cohort analysis to better inform institutional improvement efforts?
- Defining college performance: Is it more prudent to reward colleges on the basis of gains in “total points” or on the basis of gains in “points per student”?
- Proportion of performance-based funding: What portion of the total institutional budget should be distributed on the basis of performance?
- Source of performance funds: Should performance dollars be new appropriations or should they be reallocated from institutional base budgets? What is a reasonable time period and process for reaching this ultimate level of performance funding?
- Mechanism for allocating performance funds: Should performance be factored into the basic funding formula (regardless of funding level and source) or should performance funds be allocated as a bonus on top of regular funding?
- Buy-in and engagement: What activities, such as the creation of a broadly representative task force for developing overarching design principles or the establishment of a low-stakes “learning year” during early implementation, are conducive to gaining the support of key college personnel, such as college presidents and institutional researchers?
- Technical assistance: What sorts of assistance should states provide to help colleges learn how to use data to continuously improve programs and services?