An Academic Scorecard for Performance Measurement of Higher

2012 Cambridge Business & Economics Conference
ISBN : 9780974211428
Abstract:
The Basic motivation behind the paper is to analyze what are most important performance
measurement indicators being used in the higher education institutes. The main purpose is that,
after collecting the data from the institution’s heads, try to establish an academic scorecard
based on the key performance indicators considered to be the critical one for the development
and implementation of the performance measurement system. Academic scorecard is developed
after data collection using a standard pre-built questionnaire (Chen, Shun-Hsing and et-al
(2009)), analyzing and categorizing the responses based on the four perspective of balance
scorecard (Kaplan and Norton, 1996b, 2001a).
Results has shown many interesting results that in institution’s heads opinion the key
performance indicator is the internal process perspective which states that organization should
have a very strong and well defined structure and system. Focus should be on such policies
which are result oriented and they give customer satisfaction third place in measuring the
institution’s performance because they believe that if the internal systems are strong enough,
direction are clear and the institution’s attention is on the curriculum development on regular
bases, student/staff and student/teacher ratio then it will automatically eliminate many customer
dissatisfaction factors.
This academic scorecard will try to bring a change in the institution’s performance measurement
system’s perspective.
Keywords: Higher education Institutes, Performance measurement system, Key performance
Indicator, Lahore, Pakistan
Paper type: Empirical paper
June 27-28, 2012
Cambridge, UK
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2012 Cambridge Business & Economics Conference
ISBN : 9780974211428
An Academic Scorecard for
Performance Measurement of Higher Education Institutes
Sadaf Ashraf, Lecturer
Contact No:0092-300-7504189,E-Mail:[email protected]
Pakistan
M. Kamran Javed, Advocate &Business Professional
Pakistan
Contact No:0092-300-7505069,E-Mail:[email protected]
June 27-28, 2012
Cambridge, UK
2
2012 Cambridge Business & Economics Conference
ISBN : 9780974211428
An Academic Scorecard for
Performance Measurement of Higher Education Institutes
Sadaf Ashraf, Lecturer
Contact No:0092-300-7504189,E-Mail:[email protected]
Pakistan
M. Kamran Javed, Advocate &Business Professional
Pakistan
Contact No:0092-300-7505069,E-Mail:[email protected]
Abstract:
The Basic motivation behind the paper is to analyze what are most important performance measurement
indicators being used in the higher education institutes. The main purpose is that, after collecting the data from the
institution’s heads, try to establish an academic scorecard based on the key performance indicators considered to be
the critical one for the development and implementation of the performance measurement system. Academic
scorecard is developed after data collection using a standard pre-built questionnaire (Chen, Shun-Hsing and et-al
(2009)), analyzing and categorizing the responses based on the four perspective of balance scorecard (Kaplan and
Norton, 1996b, 2001a).
Results has shown many interesting results that in institution’s heads opinion the key performance indicator is
the internal process perspective which states that organization should have a very strong and well defined structure
and system. Focus should be on such policies which are result oriented and they give customer satisfaction third
place in measuring the institution’s performance because they believe that if the internal systems are strong enough,
direction are clear and the institution’s attention is on the curriculum development on regular bases, student/staff
and student/teacher ratio then it will automatically eliminate many customer dissatisfaction factors.
This academic scorecard will try to bring a change in the institution’s performance measurement system’s
perspective.
Keywords: Higher education Institutes, Performance measurement system, Key performance Indicator, Lahore,
Pakistan
Paper type: Empirical paper
June 27-28, 2012
Cambridge, UK
3
2012 Cambridge Business & Economics Conference
ISBN : 9780974211428
Introduction:
The education or academia is a term related to the proper teaching-learning activities of an educational
institution. The higher education includes the education above the intermediate level which is Bachelors,
Masters, Doctorate and Post Doctorate programs. A lot of work has been done globally for the
development of education sector. And except too many other factors, hi-tech science and computer labs,
proper infrastructure, quality of teachers and quality of atmosphere in education institutions are given
preferences. Now the top universities are offering scholarships to students in seek of the best human
minds. As there is anticipation of changes in education and related fields, an integrated curriculum in
research and design is required for "educational development". The top universities of the world are now
collaborating with each other for the development in research area and to produce improved literature to
be studied by coming generations.
The evaluation systems can help the organizations and individuals to maintain the purpose and clarity
around their mission, goals and objectives but also ensure that they have sustained the position while
delivering their desired outcomes. Measurement systems served as feedback mechanisms that provide us
that what best works and where the change or adjustment is needed. They provide valuable information
on the impacts, intended and unintended, of our actions and initiatives and as such are an important part
of all learning, living systems. Well-constructed measurement systems can ensure a consistent stream of
direct and concise feedback system(Storrs, 2010).
In response to the stakeholder’s growing concerns about poor or inconsistent quality, higher education
institutions are constantly exploring ways for education quality improvement (Lawrence and
McCullough, 2001). Many colleges and universities have looked up methods from industry and adopt
some type of total quality management (TQM) system to create competitiveness (Hubbard, 1994;
Vazzana et al., 1997). In the USA, there is a tremendous pressure on universities in providing high-quality
education and operating result. This is according to (Tang and Zairi, 1998), the result of:

A decline in the traditional pool of higher education students;

Growing dissatisfaction and frustration with spiraling college costs and

Undergraduate teaching practices;

Many parents overwhelmed by the financial pressure; and

Government fiscal restraint.
UK’s higher education commission also faced the extraordinary and increasing levels of market
accountability impulsive by the legislative processes of subsequent administrations (Tang& Zairi, 1998).
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The stakeholders of higher education sector for managers justify their actions and demonstrate quality and
effectiveness has never been greater as in recent years. These drivers led the focus of university on (Chen,
1997; Tang & Zairi, 1998):

Efficient and disciplined use of resources;

Achievement of value for money;

Increased productivity through the use of systematic planning, organization and control; and

Measurement of achievement against declared objectives by comparisons across institutions.
The Asian countries including China and India are developing the higher education sector as their
foremost concern. This development is exceptional in its character as per its size, speed and
consequences; this is exemplary for other countries. China specifically for the science and medical studies
and India particularly for IT studies are considered to produce best educational institutes. No doubt, there
exist many social problems in Asian countries which are yet unsettled but there is tremendous work done
in the area of higher education to be explored. Increased number of other countries’ students attracted
towards Asian higher educational institutes for both economic and academic purposes shows that the
education standards are getting closer to the western world (Pakistan, 2009-2010).
Performance is all about getting the thing done or accomplished something while meeting the
standards(http://ardictionary.com/Performance/3914). The quality of education is the main concern for the
institutions as well as for the students. Everyone is now realizing the importance of education. As it is
believed that the improvement in this sector will create brains which will help to conquer the world.
Excelling in this field can lead to better planning, implementation, and development procedures at macro
level for effective usage of scarce resources and ultimately tackling the problem of poverty, begging,
corruption, thefts and other evils.
The importance of performance data collection and the reporting of higher education institutes are
increased dramatically since the establishment of Higher Education Commission of Pakistan (HEC).The
developing importance of the performance measure are predictable. All the stakeholders including
governing bodies, taxpayers, students, and parents demand evidence that their funds utilization is efficient
and transparent and is on most important outcome---Learning.
If defined well, performance measures may provide all stakeholders some useful information that can
help them in future decision making; like institution choice. Performance measures are a good source of
bringing rationality to the ways in which institution choice and funding decisions are made. A
measurement process is of great importance to enhance the institution education quality. Such a process
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should ensure the measurement of university’s operational performance, should encourage each institute
to improve weaknesses, and ensure institution’s education quality. A comprehensive measuring system
should also measure each area of university’s administration.
This study will focus on the performance measurement of different higher education institution and
will try to outline an academic scorecard that for measuring institutional performance in Pakistan. In
developing the academic score card we will take the idea from balance score card but its use will be very
minimal in this study. Its major emphasize will be on producing initial portfolio for key performance
indicator that will serve as springboard for measuring performance in academic institutions.
Research Question:
This particular study is trying to find out the answers of the following questions;
1. Do the organization leaders realize the importance of performance measurement system in
education?
2. What dimension of performance measurement is most important for education organization?
Hypothesis:
Based on the above research question, further developed hypotheses are;
H1: Leadership realization has a relationship with performance measurement in education.
H2: There is a difference in public and private sector’s performance indicators.
H3: Innovation & learning perspective is the most important performance indicator in education
organization.
H4: Stakeholder’s perspective (Customer perspective) is second most important performance
indicator in education organization.
H5: Internal processes are third important performance indicator in education organization.
H6: Financial perspective has a strong relationship with education organization.
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Literature Review:
Role of Higher Education Institutes:
It has become an undeniable truth that any nation’s wealth is highly dependent more on its three
important factors people, management and government, than on its natural resources. History adequately
has taught us that many countries on the globe, to which now we called as advanced and prosperous (like
USA, Japan, Great Britain, Germany, Israel, the Netherlands) have achieved such a remarkable economic
growth and development through their work alcoholic and innovative people. Education helps in
knowledge base enhancement of the nation and therefore in shaping the future of the nations, it plays a
vital role. Emerging global trends, new economic challenges, the rapid growth of information technology
(IT) and the requirement for multilingual proficiencies are some of the challenges that developing
countries have to face. Education role in capacity building and management is capable enough to cope
with these challenges and has been appreciated and is center of attention of various governments than
ever before (Gill and Lashine, 2003).
Particularly, higher education, being the most important source of knowledgeable and skilled people, is
hugely recognized as the significant way of building rich human capital by providing the high quality
education and also attending to the pressing problem of the nation(Karname et al, 2004).a famous saying
in this regard is , organizations without clear direction are considered as a ship without a rudder, whose
fate is either getting crushed with a curved stone or going nowhere even if it pretends to.
The main objectives of higher education institutes (universities) are to provide in-depth knowledge, seek
academic development, educate students, and coordinate national development demands (Johnes and
Taylor, 1990). The core university procedures are mainly teaching, research and scholarship (Tang and
Zairi, 1998). Perkins (1973) positioned that a university has three primary functions: education, research
and service. Donald (1984) believed that universities should establish Performance Measurement
Indicators (PMIs) based on these functions to evaluate performance of related to resource allocation.
Higher Education Role in Pakistan:
In Pakistan ((Niazi and Mace, 2006)) at the time of its independence, August 1947, there was only one
university, the University of Punjab, Lahore and almost forty colleges. The government established new
colleges and universities but was not in a position to provide adequate financial and physical resources to
undertake the restructuring of the educational system and also its expansion to meet the demands of the
students. In this context the private sector developed providing opportunities to students seeking higher
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education opportunities by opening privately managed higher education institutions in the country. The
private sector education will be defined as all formal institutions that are not public, and may be found,
owned, managed and financed by actors other than the state.
We begin with some definitions of higher education, efficiency and equity. “Education is a process
through which a nation develops its self consciousness by developing the self consciousness of the
individuals who compose it”. (Khalid, 1998; p.14). Another definition of education is that “it is a social
institution which provides mental, physical, ideological and moral training to the individuals of the
society, so as to enable them to have full consciousness of their mission, purpose in life and to equip them
to achieve that purpose” (Ahmad, 1993; p.37).
From the above it would appear that education is seen as a process of the intellectual development of
individuals through which their potentialities are developed and the culture of the people is transmitted to
the following generations. But education also contributes to the economic and political development of
the individual and society at large. This is best achieved when the higher education is efficiently and
equitably provided for making better choices and providing them with the skills and attributes to lead a
better life and, in addition, will contribute to the socio-economic development of the country (For
example see Blaug, 1972 & Becker, 1976). The latter view is reflected in the Education Policy Draft
(Government of Pakistan, 1998) which states that the type and quality of education imparted to the youth
of today will provide future leadership in various fields that will successfully steer the country towards
socio-economic development in the years to come. Therefore higher education may be seen as a prime
concern of the society, the government and the individual.
Expenditure on education in this century is now being considered as an expenditure on human capital,
that is, investment rather than consumption. The National Educational Policy 1998-2010 also recognizes
the fact that there is a strong feeling among the Pakistani people that the private sector should participate
actively to supplement the resources of the government for the development of human resources.
There was only one university in the public sector in 1947 and this number had risen to 55 (47
universities and 8 degree awarding institutions) by the year 2004. The demand for higher education is
increasing rapidly due to the expanding number of school graduates in the country. Modern higher
education especially in science and technology is seen as essential for rapid socioeconomic development,
but it is very costly. “The scarcity of public finances does not allow the expansion of higher education in
the country. In this regard concerted efforts are being made to attract the private sector through liberal
policy to establish institutions of higher education in Pakistan”. (National Educational Policy 1998-2010).
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According to Isani and Virk in Pakistan, “at present there are 51 universities and degree awarding
institutes in the private sector that have received the charter from the HEC and providing education in the
fields of Engineering, Medicine, Management, and other related technical and general fields.” (Isani and
Virk, 2005; p.293). These universities are providing.
There are different points of view regarding the role of higher education. Some people are of the view that
higher education is an important factor for the socio-economic development of any society. Education
today has become the most potent instrument, not only for social and cultural changes but also for the
economic development of society. Ali (1997) states that “rapid economic development of a nation lies in
the provision of education and skilled manpower”. Education generates not only new ideas and
competency in individuals; it also accelerates the pace of technological transformation. To economists
higher education is seen as preparing people.
2.1.3 Performance Measurement in Higher Education Institutes:
The content of higher education PMI Performance measurement employs a quantitative standard to
systematically measure an organization’s daily operational results as they relate to its overall objectives.
Performance measurement in management is treated as a control category, in which an indicator is a
measurement tool. By applying a set of complete indicator systems, a supervisor can measure
organizational operating performance. Some scholars believed that an indicator represented a signal,
which represented system performance (Spee & Bormans, 1992). The advantage of establishing an
educational PMI is that it focuses attention on the primary aspects of an education system. Moreover, if
this indicator was designed strictly, it could also be used as a tool for public communication and
education reform (Elliott, 1991). Hence, the proposed PMI should contain the following characteristics:
A performance indicator should have a monitoring function (Fitz-Gibbon, 1996). A performance indicator
should be quantitative (Cuenin, 1986).
A performance indicator should be objective related (CVCP/UGC, 1986). The higher education PMIs
should have the following functions: control and measure education quality; provide information to
education policy decision-makers; provide references for education resources management and allocation;
and provide each department with indicators of performance management. Therefore, there are two
primary objectives of measurement: to assist universities in improving education quality; and, to help
universities meet customer demands and achieve their responsibilities. Higher education performance
measurement literature (Johnes and Taylor, 1990) proposed that any measurement of university
performance required the following information: the output that universities aim to produce; the input
that universities require to produce this output; quantitative measurements of each university’s input and
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output; and the technical relationship between input and output. Johnes (1996) believed that these inputs
and outputs could be used to measure a university’s performance and proposed four categories of output:
(1) output from teaching activities, (2) output from research activities, (3) output from consulting
services; and (4) output of cultural and social activities.
Sahney et al. (2004) proposed that total quality management in higher education transformation systems
included the inputs, process and outputs three aspects to measure university operation performance:
(1) Inputs – human resources, physical resources and financial resources.
(2) Process – teaching, learning, research, administrative activities and knowledge transformation.
(3) Outputs – tangible outcomes, value addition and intangible outcomes.
2.1.4 Balanced Scorecard and Performance Measurement
The balanced scorecard (BSC) enables business to transform its overall organizational strategy into
effective management. The BSC is a performance-measurement system (Kaplan and Norton, 2001a;
Niven, 2002), a strategic-management system (Kaplan and Norton, 1996a, 2001c) and a communication
tool (Niven, 2002, Kaplan and Norton, 1992). Apart from financial measurement, which is the essence of
the BSC, it also emphasizes:

Customer Role;

Internal Processes; and

Innovation and Learning.
It thus provides a complete range of PMIs to measure the achievement of strategic targets. The BSC has
four measurement perspectives (Kaplan and Norton, 1996b, 2001a).
(1) Financial perspective;
(2) Customer perspective;
(3) Internal process perspective; and
(4) Learning and growth perspective.
BSC has already been widely employed in manufacturing, and service industries, non-profit and
government organizations, etc. with excellent effects (Kaplan and Norton, 2001b). Kaplan and Norton
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(2001a, 2001b) also proposed that although financial performance is not the main target of the majority of
government and non-profit organizations, the sequence of BSC visions can be rearranged and customer or
stakeholder perspective moves on the top.
The Balanced Scorecard (BSC) approach answers the critical question about performance improvement
and creating value by innovation in organizations. The BSC by Kaplan and Norton has been the most
cited work and widely used performance measurement & management ( PMM) framework in the
literature (Taticchi, et al., 2009).
The BSC includes performance measures related to financial aspects, customers, internal business
processes and learning. These four categories could be divided into measures common to all
organizational units or unique to a particular unit, which have been shown to affect management’s
evaluations of performance which is influenced by common measures only (Lipe & Salterio, 1998, 2000).
The goal of performance measurement as suggested by the procurement Executives‟ Association (PEA)
is that "a performance measurement system must be approached as an iterative process in which
continuous improvement is a critical and constant objective" (Association, 1999).
Performance Measurement Indicators
Performance measures are at the core of the BSC system (Niven, 2002). A complete and effective BSC
must have proper key PMIs (Kaplan and Norton, 2001a; Niven, 2002). PMIs are used to assess the
achievement of strategic targets and to ensure that the overall strategic operation is workable. They can
also provide direction for staff members on how they can contribute to an organization achieving overall
targets (Niven, 2002). In the educational sector, each school will need to establish its core competencies
on the basis of its mission and vision, and will also need to consider its current resources and state of
competitiveness. Different strategic themes will have different strategic targets and different PMIs. As
more strategic themes or targets are developed, the nature and number of the relevant PMIs will also
increase.
In the same regard Raouf (2006) has proposed a model incorporating quality criteria for the university
quality assessment. This model emphasis the importance of institutional issue rather than the program
issues and can be used for the universities self assessment followed by the peer’s external review as
arranged by the quality assurance agency (HEC). The university quality assessment model (UQA) is
comprised of more or less 10 factors such as mission, students, quality of programs etc which are further
subdivided into many key elements as under mission vision and mission, status and governance and
strategic objective etc.
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All of these are developed with the intention to cover all possible aspects of university performance
measurement areas and quality enhancement areas. The presence of this instrument is no doubt provides a
great opportunity to carry out the intended research but researcher without any biasness try to test another
pre developed tool by Chen, Shun-Hsing and et-al (2004).The reason behind the usage is only that present
research intention is on performance data collection, comparison and the development of an academic
scorecard, its major focus is to find out most important performance indicators in education sector and
based on that present a balanced approach to the academia. And above researcher work is basically to
address the issues related to quality improvement and enhancement.
This study will focus on the performance measurement of different higher education institution and will
try to outline an academic scorecard for measuring institutional performance in Pakistan. In developing
the academic score card we will take the idea from balance score card but its use will be very minimal in
this study. Its major emphasize will be on producing initial portfolio for key performance indicator that
will serve as springboard for measuring performance in academic institutions.
Methodology:
Survey Introduction:
To measure and compare the performance of higher education institutes for the purpose of academic
score card development, a pre-developed and tested(Chen et al., 2009) self administered questionnaire
survey technique is used. Questionnaire is attached in the appendix. We collected responses from Lahore
based, 25 higher education institute’s head of the department/chairman/chair person/director program and
registrar. Out of 25, three universities totally refused to give their opinion as it was contradictory to their
institution policy. To keep the anonymity of the respondents names are not mentioned here. From the 22
universities, the overall contribution rate is approx 88% and the respondent response rate is 81.8% which
is quite satisfactory and encouraging for the research as compared to the other researcher rate presented
in the literature.
The reason for this good response rate is the personal visit to each university and sufficient time given to
each person. In carrying out the data collection activity, the researcher took the help from the personal
contacts and also arranged personal meetings with the respondents for the efficiency and effectiveness of
the data collection process. Respondents also provided sufficient guide to fill out the questionnaire while
care was taken not to lead them to the answer choices. The whole data collection activity per university
was completed in two to three days time as the respondents kept it pending because of some job
engagements and other problems. Majority of the respondents were satisfied with the questionnaire
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quality, anyhow only few shown their concerns on it. They found it difficult to understand and respond,
but their concerns were addressed in personal meetings. SPSS (Statistical Package for Social Sciences)
software (George & Mallery, 2006) for the analysis of collected data.
Higher Education Institutes Demographics:
Total population was divided in two mainstreams: public and private to carry out the research as
shown in the table given below, collected by the HEC (Higher Education Commission Pakistan website);
Sectoral Segmentation
Sector
Number
Public
11
Private
14
Grand Total
25
The sample size is approximately an even mix of 25 universities. The convenient sampling technique
is used and data is collected from various randomly selected departments and registrar branch of the
university. Data collection activity is carried out in Lahore and only the public and private sector
universities were selected to serve the purpose.
Factor Analysis:
This research is trying to find out the most important performance indicators in the higher education
institutes so that based upon that an academic scorecard can be developed. It also tries to compare the
performance indicators in both sectors, for this reason the data is collected under main 16 dimensions,
given as under;
1. Development target and characteristics
2. Department /School Reputation
3. Administration Resource
4. Teaching Resources
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5. Curriculum planning
6. Graduate’s career planning
7. Research results
8. Social responsibility
9. Teaching quality
10. Student retention rate
11. Faculty Resources
12. Financial resources
13. Student quality
14. Tutorship Results
15. Continuous education service
16. Student Structure
These are further sub divided into operational variables under each dimension..
Factor analysis transforms original variable into sets of common and specific factors. The observable
random vector X, with p components, having a mean ε and covariance matrix ∑. The factor model
postulates that X is linearly dependent upon a few unobservable random variables, F1, F2….Fm, called
common factors and p additional source of variation ε1, ε2….εp, called specific factors. In particular, the
factor analysis model, as Johnson & Wichern (2005) put it, is
X= µ+LF+ε
Where L is (pxm) matrix of factor loadings, giving simple correlation between the variables and the
factors. The un-observability of common factors is distinguishing a factor analysis from a regression
analysis. Lawley & Maxwell (1971) discusses some additional assumptions for these factors that (i) F
and ε are independent, (ii) E(F)=0,Cov(F)=1,(iii)E(ε)=0,Cov(ε)=
; where
is a diagonal matrix.
The analysis of the factor model proceeds by imposing conditions that allow one to quickly estimate L
and
.
Factor analysis is induced as the sample size is sufficiently large enough and approximately normally
distributed as claimed by the Central Limit Theorem (Dr.Ahmed.F.Siddiqi, Accepted for Publication;
Hair Jr et al., 1995; Levin and Rubin, 1998; Sheldon, 2002), Factor analysis can easily be applied . Factor
analysis used to bring out the most important performance measurement after the statistical reduction of
data. And the Bartlett’s test is used to check the specificity of the factor analysis for the study and to
investigate the null hypothesis that the variables are uncorrelated in the population, and by Kaiser, Meyer
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and Olkin (KMO’s) measurement index for the magnitude of the observed correlation coefficients to the
magnitude of the partial correlation coefficients. KMO value greater than 0.5 is always enviable. Given
table summarizes the value of both tests;
KMO & Bartlett's Test 1
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
.745
Approx. Chi-
5637.673
Square
df
2016
Sig.
.000
a. Only cases for which Category = Admin are used in the analysis phase.
KMO & Bartlett's Test 2
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
.641
Approx. Chi-Square
df
195.522
78
Sig.
.000
a. Only cases for which Category = Registrar are used in the analysis phase.
As we have divided the questionnaire in two parts, one for the administration and the other from the
registrar branch so we have categorized it in two parts. We apply the factor analysis using principal
component method and with zero rotation so that the ease in interpretation can be achieved. The total
variance explained table for the administer category shows that by default it extracted 15 most important
factors which are covering almost 80 percent of the total variance present in the data for the admin and 4
factors for the registrar category. But we decided to choose 7 components which are merely explaining
more than 60 percent of the total variance explained in the data for the admin category and 2 factors for
the registrar as given in the table below for the administration and for registrar category respectively;
Total Variance: Admin 1
Total Variance Explaineda
Co
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Initial Eigenvalues
Extraction Sums of Squared Loadings
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mponen
% of
t
Total
ISBN : 9780974211428
Cumulative
Variance
%
% of
Total
Variance
Cumulative
%
1
22.453
35.083
35.083
22.453
35.083
35.083
2
4.933
7.708
42.791
4.933
7.708
42.791
3
2.883
4.505
47.296
2.883
4.505
47.296
4
2.484
3.881
51.177
2.484
3.881
51.177
5
2.379
3.718
54.895
2.379
3.718
54.895
6
2.299
3.591
58.486
2.299
3.591
58.486
7
2.123
3.317
61.804
2.123
3.317
61.804
Extraction Method: Principal Component Analysis.
a. Only cases for which Category = Admin are used in the analysis phase.
Total Variance: Registrar 1
Total Variance Explaineda
Initial Eigenvalues
Compo
nent
1
Tot
al
6.2
28
2
2.0
07
3
1.2
13
4
1.0
83
% of
Variance
Extraction Sums of Squared Loadings
Cumulative
% of
Variance
Cumulative
%
Total
%
47.911
47.911
6.228
47.911
47.911
15.440
63.351
2.007
15.440
63.351
9.332
72.683
1.213
9.332
72.683
8.327
81.010
1.083
8.327
81.010
Extraction Method: Principal Component Analysis.
a. Only cases for which Category = Registrar are used in the analysis phase.
Tables for the admin and registrar category respectively after performing the factor analysis are
showing the communalities (in the last column),the explanation of the percentage variance by common
factor and the heading row is showing the relative importance of these variables. For this purpose we
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used the correlation matrix and principal component method of factor analysis without the rotation of
axis, to easily interpret the results.
A scree plot drawn for the two categories is also shown as under, which is in agreement to the above
factor loading decision. Its arm is curving till 15th factor and after that it becomes straight which is a
proof that first 15 factors are covering more than 80 percent variance of data.
Scree Plot: Admin 1
The following scree plot is drawn for the registrar category using the facility of factor analysis to
pictorially observe the most important factors which are explaining 97 percent of the variance present in
the data. In the data there are seven most important components but we will restrict to the two most
important factors which are explaining 60 percent data variance.
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Scree Plot: Registrar 1
Factor Interpretation and Profiling:
After the analysis, the interpretation is done with the variables identification that has the highest
loading on the same factor. And then discussion is carried out in terms of highest loading variables for
admin and registrar category respectively;
Factor 1:
Factor loading values are highest for the variables, full time teacher/education level ratio,
teacher/student satisfaction, and curriculum planning and assistant professor/permanent faculty ratio. The
respective communalities values are satisfactory and are on average more than 70 percent are explained
by extracted common factors. All these are the lead indicator and can be categorized in the “Internal
process perspective” (Chen, Shun-Hsing and et-al (2004)). The other variables with higher loading
extracted on the same factor can be neglected as their communalities values are lower as compare to
others.
Factor 2:
The variables with highest loading on this factor and with the communalities power more than 68
percent are teacher/student satisfaction, students attending societies, full time/Part time teacher ratio and
average graduation rate .The first three are the lead indicators and the last one is the lag indicator, so this
can be profiled as “Customer satisfaction” (Chen, Shun-Hsing and et-al (2004)).
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Factor 3:
Highest loaded factor with the communalities values which are explaining more than 67 percent are
school/dept reputation and new student retention. These can be profiled as “Financial perspective “as the
former is the lead indicator and the latter is lag indicator (Chen, Shun-Hsing and et-al (2004)).
Factoral Graph: Admin 1
Factor Profiling
40
20
Series 1
0
Internal Process
Perspective
Customer
Satisfaction
Financial
Perspective
Registrar Category
Factor 1:
For the registrar category the first highest loaded factor with the variables are alumnus donation ratio,
donation capital from business, return on investment (ROI), economic value added (EVA). Communality
values for the factor are more than 84 percent. All these are the lag indicator falling under the same
category so can be profiles as” Financial Perspective” (Chen, Shun-Hsing and et-al (2004)).
Factor 2:
Factor having the second highest loading is other expenses/total income ratio which is the lag
indicator of “Financial Perspective” so can be profiled with the same name (Chen, Shun-Hsing and et-al
(2004)). It has the communality power more than 89 percent.
Factor 3:
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The only factor having the highest loading is student entry method with the communality power 89
percent. It is the lag indicator of the “Financial Perspective “category so we profiled it with the similar
name (Chen, Shun-Hsing and et-al (2004)).
Factor 4:
This factor also has the only variable average graduation rate which is the lag indicator so can be
profiled as “Customer Perspective” (Chen, Shun-Hsing and et-al (2004)).its communality power is 74
percent as extracted by the common factor.
Factoral Graph: Registrar 1
Factor Profiling
60
40
20
Series 1
0
Financial Financial Financial Customer
Perspective Perspective Perspective Perspective
Discussion:
The analysis of the collected data by the education sector of Lahore has revealed many interesting
results that in the education the most important factor is internal process perspective. The second most
important is the customer perspective in terms of satisfaction and the last one is the financial perspective
which is in fact after collecting data from the registrar category is the second most important factor in the
education sector. We will discuss each of them in terms of culture and three important root causes behind
every social problems; poverty, socio and religion.
As majority university administration were agreed that education organization basic focus is on its
internal strength and processes maturity. They believe that if an organization wants to compete in the
market then it should have very well defined processes and smooth structure for the effective and efficient
running of the whole performance system. The performance can only be collected in real terms if the
employees working inside are satisfied that organization has the procedural justice and distributive justice
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intact. The lead indicators” anterior symptoms of organization management” in the internal perspective as
explored by the data are student/teacher satisfaction measures, curriculum planning and full time teacher
qualification ratio etc. All these are relating to the strong evaluation system working inside the university
and the planning strategy of the university representative that they believe that decision about these
parameters are in the benefit of the university and can be defined as the most important for an academic
organization. It also emphases that if the organization is good in defining its internal target and on their
evaluation then it can easily cope with the outside competitive environment as suggested by the author
that strategy based on strategic reflections and actions help organizations to cope with and effectively
adapt to the future environment (Kriemadis, 1997).
It is also believed that the higher education institutes main objectives are to offer comprehensive
knowledge, seek educational growth, educate students and coordinate national development demands
(Johnes and Taylor, 1990) so the organizations which have strong internal process perspective are said to
be on the right direction where in the future they will be able to meet not only the market demand but also
provide a skilled labour to the nation as well. We can expect that the organizations with a strong policy
making and implementation systems are those as described by the above author. As analysis has shown
strongly that the HEI’s are very much concerned about the student/teacher ration and also the
qualification of the teaching resources, this in the agreement of the core university procedures which are
mainly teaching, research and scholarship (Tang and Zairi, 1998).If HEI’s are focused on one aspect from
the above then it is quite understandable that eventually HEI’s will be having all others university aspects
incorporated in their respective organizations. Another author (Perkins (1973)) also threw light on the
most important functions of a university: education, research and service.
The second most important performance measurement indicator is financial perspective as indicated
by the registrar and administration both. It covers many aspects of the university performance like
alumnus donation and graduation rate along with typical financial indicators like return on investment and
economic value added. It gives a very healthy approach to the policy maker that finances are not the only
source for fund generation but there some other ways are also present which include the alumnus donation
and representation in various activities to motivate new customers (admission) towards the particular
organization. One must take care and should take necessary steps to include this thing as a policy part so
that a new resource of fund generation can be created. It is also acknowledged by the author (Karname et
al, 2004). In these words that higher education particularly is the most important source of knowledgeable
and skilled people and is hugely recognized as the systematic approach towards building a rich human
capital with the help of quality education and awareness to the challenges faced by the nation. So the
organizations should not only focus on the traditional ways of generating funds but use their alumnus and
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graduates as the face of the organization. Then they will be certainly not only getting the appreciation
from the society but also a good source of fund raising.
The third most important factor as recorded by the universities admin is the customer or stakeholder’s
including students, parents, employees, teachers and shareholders perspective in terms of their satisfaction
with the organization. They marked that in the performance evaluation parameter satisfaction of the
customers play an important role. It can also be taken as some lead indicators of this perspective also
serve as the lag indicator of the internal process and financial perspectives respectively so we can say that
all the performance measurement indicators are interrelated. And customer satisfaction establishes the
basics for the increase in finances and it stems from the internal maturity of the university’s processes.
The indicators as explored are the department /school reputation, student participation in different
societies, student/teacher ratio and cover the satisfaction of teacher/student. As it is believed that
education organization is basically a social institution which trained individuals of the society mentally,
physically, ideologically and amorally and enables them to be more aware and conscious about their
mission, the purpose in life and better skilled them to achieve that purpose (Ahmad, 1993; p.37). If the
customers and the stakeholders are more satisfied, they will be more energetic to pay back not only to the
institute but also to the society.
As author (King, 1995)described that in today’s knowledge based economy, higher education
institutes can be taken as the hub for human resource development and play imperative role in the
economic growth and development processes of countries. This post 9/11 phase is considerable to be very
crucial for the Pakistan and country is passing through many critical phases since the starting of this war
against terror. Education among many other sectors is also badly affected by the global changes directly
and indirectly.
Pakistan where the poverty rate is increased alarmingly as Pakistan total population in 2011 is
approximately 170 million and it is forecasted that round about 40 percent of the population (70 million)
will live in absolute poverty. Pakistan which is hit by the century worst flood last year. And people not
only lost their lives but they left only with what they were wearing at that time.
Pakistan where political and religious issues are getting stronger day by day, law enforcement
situation is worrying and common masses are not expecting even a single good thing from the
government. Then it is easy to understand how difficult it will be for a common Pakistani to bear the
expenses of the study, the higher education institutes as an organization to carry out their business
activities in this uncertain situations and ultimately targeting to the nation’s future. A famous saying in
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this regard is , organizations without clear direction are considered as a ship without a rudder, whose fate
is either getting crushed with a curved stone or going nowhere even if it pretends to. Another author
(Khalid, 1998; p.14) also emphasized on the same that education is the reason through which self
consciousness of the individuals developed who further develop the self consciousness of the nation.
There exist many different views on the role of the higher education in the socio-economic development
of any society. A research Ali (1997) concludes the same that stipulation of education and skilled
manpower are the tool for the rapid economic development of a nation.
So it is believed to be that if we really need a prosperous Pakistan then we must utilize all our
resources to ensure that literacy rate is escalating with each passing day and that equal opportunities for
education are available to all. We can say that the main reason behind majority of Pakistani nation
problems is the high illiteracy rate. That is why common masses cannot identify what their fundamental
rights are, how they have to deal with their religious emotions, what are the basic religious teachings.
That is why it is thought to be that first HEI’s has the need to be internally strong enough, they should
have their own culture, value system and structure so that they can make a distinction between right and
wrong.
As we have already discussed that customer and finances are of great importance performance
measurement indicators. The reason is very understandable in Pakistan where inflation rate is increasing
day by day. Consumer buying power is on reduction with no job security, utilities expenses are on
increased and new opportunities for the earning are low, to meet educational expense is really a tough job.
So it is very much important for the HEI’s to provide a quality education to their customers and also help
them out in finding new ways of earning and establishing their careers after graduating from the
organization. On the finances side because of the wrong policies of the government, it is equally difficult
for both: institution and students to meet the financial obligations. That is they are placed side by side. In
this competitive world where institutions are dealing with intense competition, it is important for the
institutions to not only retail their students but provide them with different financial beneficial schemes so
that they can easily complete their education. But for the institution, try to find out new source of fund
generation to have a healthy financial ratios is also very crucial. As described by the (Donald (1984))
universities should establish Performance Measurement Indicators (PMIs) based on these functions to
evaluate performance of related to resource allocation. To ensure that resource allocation inside the
organization is according to the demand of the situation and if it fails, try to find out reasons of failure to
avoid the future happening.
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Some scholars believed that an indicator represented a signal, which represented system performance
(Spee and Bormans, 1992) so if we establish such performance system based on the above indicators then
we can have detailed and good understanding about the organizational operational activities and also help
us to find out the problematic areas of organization. Establishment of educational performance indicators
focuses attention on the primary aspects of an education system. Moreover, if this indicator was designed
strictly, it could also be used as a tool for public communication and education reform (Elliott, 1991).
Hence, the proposed PMI should contain the following characteristics: A performance indicator should
have a monitoring function (Fitz-Gibbon, 1996). A performance indicator should be quantitative (Cuenin,
1986).
While we try to develop the academic scorecard based on these performance indicators we taken care
of the following parameter that a performance indicator should be objective related (CVCP/UGC, 1986).
The HEI’s score card should have the following functions: control and measure education quality;
provide information to education policy decision-makers; provide references for education resources
management and allocation; and provide each department with indicators of performance management.
Therefore, there are two primary objectives of measurement: to assist universities in improving education
quality; and, to help universities meet customer demands and achieve their responsibilities. In establishing
this score card we took the main idea from the balance score card as author (Kaplan and Norton, 2001b)
described its four perspectives: a) financial perspective, b) customer perspective, c) internal process
perspective; and
learning and growth perspective. BSC has already been widely employed in
manufacturing, and service industries, non-profit and government organizations, etc. with excellent
effects (Kaplan and Norton, 2001b). Kaplan and Norton (2001a, 2001b) also proposed that although
financial performance is not the main target of the majority of government and non-profit organizations,
the sequence of BSC visions can be rearranged and customer or stakeholder perspective moves on the top.
An academic Score Card for the Higher Education Institutes
Academic Score Card 1
Perspective
Key Theme
Internal Process Good
Perspective
KPI’s
Targets
Learning Establishment of excellent Full
Environment
service process
time
teacher/education
level ratio
Teacher/student
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satisfaction
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Curriculum planning
Assistant
professor/permanent
faculty ratio etc
Financial
Good
Perspective
structure
financial Escalating income
School/dept reputation
New student retention
Alumnus
donation
ratio
Donation capital from business
Return on investment (ROI)
Economic value added (EVA)
Customer
Harmony
with Improve
customer Teacher/student
satisfaction
Satisfaction
customer
satisfaction and department Students attending societies
expectations
image
Full time/Part time teacher ratio
Average graduation rate etc
As the above score card is developed based on the data collected by the academic heads and is
lacking in the learning and growth area over all so we will suggest that as discussed by the other author
university’s main objectives also include the research field so the academic score card must incorporate
this perspective to be a balanced approach towards the establishment of a performance measurement
system.
Conclusion and Recommendations
This research is intended to explore the most important performance indicators in the higher
education institutes of public and private sectors based at Lahore for the purpose of the development of an
academic scorecard based on that KPI’s. The results shown that the in general understanding of
performance measurement system of a higher education institute, learning and growth perspective is
somehow neglected and not given enough importance as compare to the outer world. In other words our
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institutions are still not realizing the need of a research based activities in the academic dilemma. As we
believe that if we sharpen our student’s analytical abilities, give them opportunities and support to work
on new ideas hence improving their creative skills as well then it will definitely help us to make our
country progressive and having a rich skilled human capital. Learning and growth perspective have find
some strong traces in the public sector but it is a real surprised to know that in general the public sector is
far behind in this area. The reason for the public universities nourishment can be connected somewhere
with the role of Higher education commission (HEC) of Pakistan. They no doubt has provided extensive
funds to the public universities for the research and development and also generous enough with the
private sector. But in private sector the problem is somewhere within the organization lies. So based on
the above I will suggest an academic scorecard also incorporating the learning and growth perspective as
an important part of performance measurement system of the higher education institutes.
The proposed academic score card is;
Suggested Academic Score Card 1
Perspective
Key Theme
Internal
Good
Process
Environment
KPI’s
Targets
Learning Establishment of excellent Full
service process
time
teacher/education
level ratio
Perspective
Teacher/student
satisfaction
curriculum planning
Assistant
professor/permanent
faculty ratio etc
Financial
Good
Perspective
structure
financial Escalating income
School/dept reputation
New student retention
Alumnus
donation
ratio
Donation capital from business
Return on investment (ROI)
Economic value added (EVA)
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with Improve
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Customer
Harmony
customer Teacher/student
satisfaction
Satisfaction
customer
satisfaction and department Students attending societies
expectations
image
Full time/Part time teacher ratio
Average graduation rate etc
Learning
& High
Growth
quality
teaching resources
of To promote the culture of Average variable cost/student
research and innovation
Perspective
Paper published in journal per
teacher
PhD Ratio
To conclude my research the final finding is as under;
Future Research Directions:
The future research on the above topic can be carried in the following areas;
a) Scope can be broaden to the whole Pakistan
b) Other factors like culture, value system of an area can also be incorporated to get the performance
measurement indicators of higher education institutes
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