Performance-linked funding for the Student Achievement Component-funded sector

The following information contains details of how performance-linked funding for Student Achievement Component (SAC)-funded tertiary education organisations (TEOs) works. This includes:

Weightings

The Government values different outcomes at different levels of education – for example, progression to higher levels of learning is more important at foundation levels. The educational performance indicators are weighted differently for the different grouped qualification levels, as set out in the table below.

 

Table 1: Weightings at grouped qualification levels
Grouped
Qualification
Levels
Indicator 1
Qualification
Completion
Indicator 2
Course
Completion

Indicator 3
Retention
(Completion 
Continuation)

Indicator 4
Progression
Total Weight
Level 1-2 35% 45% 0% 20% 100%
Level 3-4 45% 55% 0% 0% 100%
Level 5-6 35% 45% 20% 0% 100%
Level 7-8 35% 45% 20% 0% 100%

A weighting of 0% means that the educational performance indicator does not affect the performance score for this grouping of levels.

Performance scores

The weighted performance of each SAC-funded TEO at each grouped qualification level is combined into a score out of ten. The table below shows how a TEO with the following educational performance indicators would score at level 1-2.

 

Table 2: Example Educational Performance Indicators
Grouped
Qualification
Levels
Indicator 1
Qualification
Completion
Indicator 2
Course
Completion
Indicator 3
Retention
(Completion
Continuation)
Indicator 4
Progression
Level 1-2 62% 68% 82% 53%

 

Table 3: Calculating performance scores
Performance Score Level 1-2 Calculation of score for level 1-2
6.3 = ((62% x 0.35) + (68% x 0.45) + (82% x 0) + (53% x 0.20)) x 10

Thresholds for measuring 2016 performance

The TEC has decided to maintain the upper thresholds and increase the lower thresholds for measuring 2016 performance, which will impact upon 2017 funding.

This reflects that high-performing TEOs have continued to improve although performance at higher levels is beginning to slow. Increasing the lower threshold is an indication there are still improvements to be made. Raising the lower thresholds provides an incentive for lower-performing TEOs to improve.  

The upper thresholds have been calculated from published 2011 performance information, while the lower thresholds have been calculated from published 2014 performance information.

 

Table 4: Thresholds for measuring 2016 performance
Grouped Qualification Levels Upper threshold Lower threshold
Level 1–2 6.0 5.6
Level 3–4 7.8 6.3
Level 5–6 7.5 6.0
Level 7–8 8.1 6.6

Thresholds for measuring 2015 performance

The TEC has decided to maintain the upper and lower thresholds for measuring 2015 performance, which will impact upon 2016 funding, at the same levels as those that applied to measuring 2014 educational performance.

This reflects that while some performance thresholds have reached an acceptable level, there is still improvement expected at some grouped levels.

This provides an incentive for lower performing TEOs to improve their performance, while not increasing thresholds for those TEOs that are already performing well.

The upper thresholds have been calculated from published 2011 performance information, while the lower thresholds have been calculated from published 2012 performance information.

 

Table 5: Thresholds for measuring 2015 performance
Grouped
Qualification
Levels

Upper
threshold

Lower
threshold

Level 1–2 6.0

5.6

Level 3–4 7.8 6.1
Level 5–6 7.5 5.6
Level 7–8 8.1 6.6

Thresholds for measuring 2014 performance

The lower thresholds for measuring 2014 performance, which will impact on 2015 funding, were calculated from published 2012 performance information. The upper thresholds were calculated from published 2011 performance information.

 

TAble 6: Thresholds for measuring 2014 peformance
Grouped
Qualification
Levels

Upper
threshold

Lower
threshold

Level 1-2 6.0

5.6

Level 3-4 7.8 6.1
Level 5-6 7.5 5.6
Level 7-8 8.1 6.6

Thresholds for measuring 2013 performance

The thresholds for measuring 2013 performance, which will impact on 2014 funding, were calculated from published 2011 performance information.

 

Table 7: Thresholds for measuring 2013 performance
Grouped
Qualification
Levels
Upper
threshold
Lower
threshold
Level 1-2 6.0 4.9
Level 3-4 7.8 6.1
Level 5-6 7.5 5.4
Level 7-8 8.1 6.0

Part-time study

The Government wants to ensure that TEOs continue to provide access to tertiary education for people who are studying part-time. As people who study full-time tend to do better than those studying part-time, the qualification completion rate will be adjusted according to the amount of part-time provision taking place. The adjustment is made by working out the percentage of part-time provision taking place at each grouped qualification level (the part-time factor) and applying this to the qualification completion rate as follows:

The part-time factor is calculated by comparing the amount of learning that actually occurred with the amount of learning that would have occurred had every student been studying full-time.

The part-time factor is multiplied by the part-time weighting (50%) and the qualification completion rate to give the part-time adjustment:

Part-time adjustment = part-time factor x 50% x qualification completion rate

The part-time adjustment is then added to the qualification completion rate to give the adjusted qualification completion rate:

Adjusted qualification completion rate = qualification completion rate + part-time adjustment.

 

Table 8: Example Educational Performance Indicators
Grouped
Qualification
Levels
Indicator 1
Qualification
Completion
Indicator 2
Course
Completion
Indicator 3
Retention
(Completion
Continuation)
Indicator 4
Progression
Level 1-2 62% 68% 82% 53%

 

Table 9: Part-time study
Performance Score
Level 1-2
% part-time provision
at level 1-2
Calculation of score for level 1-2 with part- time adjustment
6.7 42% 6.7 = (((62% + (42% x 50% x 62%)) x 0.35)  + (68% x 0.45) + (82% x 0.00) + (53% x 0.20)) x 10

Qualification completion rate

When developing performance-linked funding, the TEC consulted with TEOs on the use of a weighted rolling average to calculate the qualification completion rate.  This was intended to smooth the impact of TEOs’ fluctuating enrolments and was agreed by the TEC in January 2011.

A phased approach to implementing the weighted rolling average was agreed, with the following weightings applied to the calculation of the qualification completion rate for 2012 funding adjustments: a zero weighting applied to 2009 performance data, a 25% weighting on 2010 data and a 75% weighting on 2011 data.

The full impact of the three year weighted rolling average was due to take effect in 2013. However, the TEC’s initial calculations of 2013 performance-linked funding results showed that the use of a weighted rolling average may be having unintended consequences for a number of TEOs.

In recognition of this, and that, overall, the sector has shown year-on-year performance improvement, the TEC decided that from 2013, the weighted rolling average will only be applied where the resulting adjustment is lower than when based on the previous year’s performance only.

This means that the qualification completion rate will be calculated based on either the previous year’s performance data only or a three year weighted rolling average, whichever results in a smaller funding adjustment. Where the weighted rolling average is used, it will be with the following weightings: a 50% weighting on the previous year’s data, a 30% weighting on the data from two years before, and a 20% weighting on data from three years before.

Managing payments

TEC manages adjustments to payments for performance-linked funding, if applicable, by adjusting the December payment. The same method of adjusting payments will be applied across the sector.

This means that TEOs will receive 100% of their funding, pro-rated across evenly between January to June, and from July to December, in monthly payments. However, any adjustment for performance-linked funding will be made to the December SAC payment.

Performance linked funding calculations will be recalculated once actual delivery levels and funding amounts for the calendar year have been finalised.

  • Last changed: 5 November 2015
  • Last verified: 5 November 2015