PERFORMANCE INDICATORS APPLIED TO BRAZILIAN
PRIVATE EDUCATIONAL INSTITUTIONS
Átila de Melo Lira
Universidade Paulista, Brazil
E-mail: atilalira@hotmail.com
Irenilza de Alencar Naas
Universidade Paulista, Brazil
E-mail: irenilza@gmail.com
Submission: 21/08/2014
Revision: 09/09/2014
Accept: 21/10/2014
ABSTRACT
Initially focused on for-profit companies the Balance Scorecard (BSC)
has been adopted by many organizations with different objectives, such as
higher education institutions (HEIs). However, it is not clear if the adoption
of the BSC model is appropriate, or yet is hard to perceive how HEIs have
modified and implemented this tool for evaluating educational institutions,
public or privates, in Brazil. This study aims to fill the gap existent in the
context of using the BSC in organizations. We intend to demonstrate how these
organizations use performance indicators to measure their primary activities. A
quantitative and exploratory study was developed from the analysis of
performance indicators found in the web sites to Brazilian universities. A
total of 91 Brazilian private universities evaluation process were reviewed.
Even with a considerable amount of private HEIs there are few that have
performance indicators guided by numerical and statistical data covering its
main activities which is a concern for their managers in terms of managerial
control.
Keywords: Balanced
scorecard; performance indicators; private higher education institution.
1. INTRODUCTION
The activities performed in an
organization require constant monitoring and evaluation, which requires
managers to use methods for this purpose. The Balanced Scorecard (BSC), is one
of the most used tools for the measurement and analysis of organizational
performance. This approach assesses the different perspectives involved in the
business dynamics (KAPLAN; NORTON, 1997).
Originally
proposed by Kaplan e Norton (1992), the BSC has spread quickly and consistently
in the business scene. Steele (2001) credits this development to the need of
proper guidance for making decisions. In turn, Kaplan e Norton (1996) argues
that the rapid expansion of BSC derives from the ineffectiveness of previous
management strategies.
Supporting
these arguments Campos (1998) states that only the financial and accounting assessments
are not sufficient to determine the performance of an organization, and can
easily provide misleading on improving business outputs. Then it appears that
the contributions proposed by Kaplan e Norton (1992) overcame the traditional
financial-accounting theory of evaluation urging scholars and strategists to
review some paradigms and envision new ways to assess organizational
performance.
This
study, which
presents itself as the first step of a much larger research, aims to amend the
gap in the subject that deals with the application of the BSC in Brazilian
HEIs, through the development of a research that uses performance indicators to
assess activities as research and extension, teaching-learning, institutional
management, financial management and quality of communication services.
2. LITERATURE REVIEW
2.1.
Balanced scorecard
Thus,
the BSC offers organizations a valuable mechanism for the translation of
strategy into objectives, measures and targets. Kaplan e Norton (1992) argues
that the BSC transcends simple strategy formulation making it a true
intervention mechanism. In designing these authors the BSC reflects the balance
between goals of short and long term, between financial and non-financial
measures, and between the internal and external performance perspectives
KAPLAN; NORTON, 1996).
The
BSC model proposed by Kaplan e Norton (1992) supports the view of the
organization from four key perspectives, namely, finance, customers, internal
processes and learning/growth. For management purposes, metrics (scorecards)
are developed, and data is collected to evaluate each of these perspectives.
During
the process of evolution, the idea of BSC is being modernized plus new
features. One of these contributions was proposed Macstravic (1999) pointed out
that when the BSC is a way to translate the company vision real strategy,
providing feedback enabling the learning activities of their components.
Another literature Steele (2001) provides the BSC concept of the guiding
element of conscious decision- making process, stating that this tool
translates the transmission of the approach through a set of integrated
measures.
In
summary, the BSC is a necessary good for organizations, as it says Kaplan e
Norton (1992) because it provides more robust decision-making, increased
financial and administrative control of activities and inter-relationship
between the various constituent processes across organizational, putting
strategy at the center of the management process (KAPLAN; NORTON, 1992).
In
Brazil, we can from the contributions of Papini et al., (2011). In a study
aiming to compare the performance indicators used by the metallurgical industry
sector, the authors, using the BSC methodology, highlighted the potential for
improvement and could propose specific changes that allowed the improvement of
company management. In this investigation, the authors emphasize the importance
of using effective measurement mechanisms to foster the sound management of an
organization.
Souza
and Albuquerque (2012) go further to show that the BSC can also be used to
measure intangible assets. In their research, the authors applied this
management strategy to demonstrate the importance of knowledge management in
the context of organizations, which are able to provide a competitive advantage.
This character was also highlighted in the study by Prado et al. (2013) on
accounting controllership.
Finally,
in a study of practical application in a company providing accounting services,
Vieira and Petri (2014) reaffirm the need to adapt the organizational context
before applying the BSC. The authors proposed the formulation of a sustained
strategic map in four perspectives: customers; internal processes and learning;
and growth, which resembles the traditional dimensions proposed by Kaplan and Norton
(1992), however adapted to the reality of the studied company.
2.2.
The application of the
balanced scorecard in HEIs
The
fundamental principle presented by the BSC, ie, a combination of measures of
strategy, mission and performance, is not new in the context of HEIs. The first
evidence of the use of this tool in the university environment, were designed
by O'Neil et al. (1999). These authors argue the need for application of the
BSC in this environment, since educational institutions are increasingly held accountable
for the results of the services that offer.
The
authors recognize that HEIs designed by them as "organized anarchy",
represent the kind of organization where there is a greater difficulty for the
BSC, because there seems to be a strong resistance and skepticism on the part
of scholars on the possibility of introducing quantitative measures in the
evaluation of how these institutions are effective (O'NEIL et al., 1999).
Historically,
the performance indicators adopted by HEIs did not have an image of situation
of the institution as a whole. These indicators were unable to visualize the
organizational dimensions under the administrative standpoint, neglecting
aspects such as mission, vision and strategic direction of the institution, as
highlighted Philbin (2011).
This
scenario proved opportune for the introduction of the BSC in the context of
HEIs. This new tool allowed the higher education institutions a broad approach
to their processes not sticking to simple accounting-financial measures. Kaplan
and Norton (1992) explain that this tool allows you to find different ways to
help the institution to achieve the objectives previously set in the strategic
planning.
The
contributions offered by the BSC to the HEIs can be evidenced through some
elaborate constructs within this theme. It is worth mentioning the study of
Lima, Soares and Lima (2013). These authors point out that adapting the BSC to
the complex world of HEIs is a big challenge, much of this difficulty is
related to skepticism own managers, so the complexity is not the strategy, but
in management.
Aware
of the need that companies have to achieve improvement in organizational
performance, while it should be flexible in the face of demands and changes of
the environment, Fernandes (2013) proposes a research that investigates the
feasibility of implementing a strategic plan, through the BSC methodology, in the department of economics and business
administration UFLA (Federal University of Lavras). Through this investigation
it is noticed that the BSC can also be used to measure the activities of the
public sector.
In
turn, Borges, Cabral and Petri (2014), in research directed specifically to the
private higher education sector, suggest that high competition in this area
justifies the need for such institution has strategies that allow for sound and
sustainable management. Thus, the authors propose performance indicators from
the perspective of customers, differentiated vision of the traditional studies
that have centered their focus exclusively on the business context.
3. METHODOLOGY
In
order to direct the search for rational the following question needs to be
answered: How Brazilian HEIs adopt and implement performance indicators in the
control and measurement of its main activities? The responses may subsidize the
discussions related to this theme.
This
study was based on a deductive method of construction where a general and
generic situation provides evidence to determine particular conceptions of an
observed fact (CHIZZOTTI, 1995; MARCONI; LAKATOS, 2004). In turn, we used
quantitative methods approach, as it is believed that they are more suited to
what we intend to investigate this construct to mention, the application of
performance indicators for the activities of HEIs (higher education
institutions).
For
(KHUN, 1978), the choice of a quantitative approach brings to light some
features. Regarding the ontology this study presents objective and natural
reality with epistemology that makes it clear that no proximity between subject
and object of study, the axiology is presented as value-free and static design
methodology with which generalizations lead to predictions and explanations
with reliability. An exploratory study is one that allows the construction of
evidence, in order to make the research acquainted with the object in the
context of its reality (PIOVESAN; TEMPORINI, 1995).
The
procedures adopted this research leads to a documentary study. Regarding Cervo
e Bervian (1978) this type of research is performed by contemporary or retrospective,
scientifically authentic documents. To construct this study using electronic
records of the leading private universities in Brazil containing information
relating to the performance indicators of activities as research and extension,
education, institutional management, financial management and information
services.
This
study is characterized as an interface in which the data were collected at a
single time picturing a scenario at that time, which differs from longitudinal
studies where data are collected over a long time (INEP, 2012).
For
the preparation of the study, it was considered the 91 Brazilian private
universities. Although only 43 organizations have in your electronic records,
performance indicators of its main activities to meet the criteria for analysis
it was considered appropriate to use the entire population. Data were obtained
through a search on the web for all Brazilian private university websites. This
search has focused on the search for indicators of institutional, financial and
management performance.
How
the selection criteria we used the following filters: a) the data analyzed
should refer to activities for the year 2013; b) the data should be available
on digital platforms specific to the institution performance indicators, ie,
the analyzed data could not be taken from another source that was not the site
of the institution.
To
analyze the information obtained the data were organized, coded and interpreted
by techniques specific to the objectives proposed analysis. The results that
emerged from the research were placed in a straight sequence of significance in
order to provide explanations that allow making inferences within an empirical
reality (CHIZOTTI, 1995).
In
order to enable a better understanding of the facts to be presented, this work
was organized in four sections, in addition to this it is, evident. It begins
with a critical review of the literature around the BSC and its application
HEIs.
3.1.
Results and discussion
The
use of performance indicators is a basic and essential tool for the management
of an organization. When it comes to an HEIs, the use of such measurement
mechanisms becomes even more necessary in the face of the immensity of
variables involved in its processes. In this section, we deal with aspects such
as HEIs assess essential factors to its dynamics, such as teaching and
learning, institutional management, research and outreach, financial management
and quality of communications services will be analyzed.
3.2.
Application of performance
indicators
Among
the data obtained from the consultation to the web sites of Brazilian private
universities emerged some considerations that, once quantified, allow realizing
a more sound analysis and reliable foster discussions on the adoption and use
of performance indicators. Figure 1 indicates through numerical reality of the
use of such control and assessment tools in the context of the Brazilian
private HEIs data. The first feature shown in the graph is related to the
amount of HEIs, in fact; use performance indicators to monitor and evaluate
their activities.
Amongst
the 91 Brazilian private universities only 43 were used this tool. This number
shows that less than half of total private universities in the country have a
mechanism to measure that can provide them with information on the development
of activities which they engage. Concerning the higher education institutions
that adopt performance indicators in 27 of them this mechanism is employed in
order to measure and control the activities of teaching - learning. In general,
within this context the performance indicators are used to: quantify the
satisfaction of students regarding curriculum guidelines; as the fitness for
teaching project; as the creativity and commitment of teachers and many forms
of assessment adopted by the institution.
Amongst the 43 private universities
using performance indices, 11 of them applies this tool in order to provide
quantitative data for evaluating research and extension activities. The number
of papers published in scientific journals or conference proceedings during the
period is used to evaluate the research activity. In turn, the amount of
actions developed to the community and its impacts are given for assessing the
extension activities adopted by the organizations.
The
number of private universities that use performance indicators to assess and
analyze their institutional management was 10. The institutional management was
assessed by the ability of coordinators and directors generate positive results
to the institution; however, the performance of organizations such as
secretarial, library and laboratories are important to give satisfactory
metrics institutional management of the university.
Similarly,
it was found that 10 private universities use performance indicators to
quantify and evaluate the quality of information services. Importantly, these
institutions do not have the intention of quantifying the quality itself, since
due to its subjective nature that action would be inaccurate. However, that
measure is the effectiveness and outcomes associated with quality communication
services, these are plausible quantification and analysis.
Finally,
it was noted here that only 3 out of the 43 private universities that adopt
performance indicators also measured its financial results. In those few opting
for evaluation indexes such institutions financial results are demonstrated by
means of balance sheets, income statement and statement of financial cash flow.
Many institutions do not disclose their financial measures because it considers
them private and restricted levels of analysis and verification of the
exclusive managers of the institution.
3.3.
Interrelationship of the
activities developed by the HEIs
When
analyzing the way in which HEIs use performance indicators it was found that
there is a tendency among these institutions to consider the activities,
inseparably united within a dynamic execution context. For an activity to
improve in a way suited to the above ideas, you must be satisfactorily
fulfilled. Given these considerations it is proposed here is a functional
performance model that provides the activities and performance indicators a
dynamic and complementary character.
The
proposed model (Figure 2) supports the view that the starting point of the flow
that involves activities and performance indicators starts from the financial
management of the institution. The proposal is that effective financial
management, characterized by solvency of finance, it is essential to ensure the
development of a private college.
In
the context of the model, so that the second action, institutional management,
to develop satisfactorily, the first should be within the standards of
acceptance, these patterns observable through performance indicators as an
income statement, balance sheet and cash flows.
Figure
2: Model of functional performance adopted in the study
In turn, an appropriate
institutional management- when coordinators and directors perform effectively
in carrying out its functions, and resources like library, laboratories and
departments are directed to the needs of students’ quality learning activities,
learning and services communication are good direct consequence.
These two combined functions
converge in research and extension activities, ie, good internal communication
tools, combined with incentives teaching - learning are fundamental to foster
the adoption of research and extension activities by universities. In a private
institution, the combination of all these activities when developed
satisfactorily it provides financially profitable results. This feature
justifies the character stream given the proposed model.
Performance indicators play a key
role in this context since they act at the interfaces between one activity and
another providing control and analysis of their results, which allows functions
to develop dynamically and consistently on an intermittent and continuous flow.
3.4.
Effectiveness of performance
indicators
One question is relevant when
analyzing the relationship between the use of performance indicators and the
development of the institution. Until point the use of metering mechanisms and
performance analysis influence in the effectiveness of implementation of activities
in private HEIs? This is a question still unresolved, since there are no data
available that allows answering this question.
According to the results of the
general index of courses (IGC) held in 2012, amongst the top 50 higher
education institutions in Brazil only 3 were private (Pontifical Catholic
University of Rio de Janeiro - PUC/RJ, Pontifical Catholic University of São
Paulo - PUC/SP, Pontifical Catholic University of Rio Grande do Sul - PUC/RS,
(INEP, 2012).
It appears that the aforementioned educational
institutions use performance indicators, and it appears to be a relationship
between the use of performance indicators and the effectiveness of their
results. However, other organizations which favored the adoption and use of
performance indicators of their activities were not even related to this
classification.
Although there are indexes that
qualify private HEIs, none of them makes any inference to the impact of the
performance indicators in these results. Thus, it appears that one cannot attribute
the success of an educational institution to the fact possess indices
measurement, while also cannot attribute their failure to lack of these
indicators.
4. FINAL REMARKS
There is a considerable number of
private institutions of higher education in Brazil, but few of them adopt
performance indicators with numerical and statistical data covering core
activities that in turn allow an analysis of the current situation and its
evolution during a given time. This statement is guided by the presence or absence
of performance indicators on the websites of these institutions.
For organizations that adopt
performance indicators, most use these tools to measure and analyze the
activities of teaching - learning. This preference is credited to the fact that
these activities represent the main duty of an educational institution, so
there are frequent actions in order to analyze and monitor the activities
mentioned. Conversely, measurement and evaluation of investment income is the
activity where educational institutions use less performance indicators.
In the context of the Brazilian HEIs
is perceived that the activities are joined in a continuous system of
enforcement. This observation gives the dynamics of these activities the idea
flow. It is noteworthy that for an action to improve, it is necessary that its
antecedent has been carried out efficiently, and satisfactorily.
Even before the adoption of the
relevant performance indicators and their importance in the development of
metrics for analyzing the situation of the institution's teaching, there is
still a gap to be filled in this issue that prevents this tool is linked to the
success of these institutions or for arguing that their failure stems from its
lack.
Thus, as a suggestion for further
study identifies the possibility of building research that may correct this
theoretical gap by means of a construct that correlates the adoption of
performance indicators of the private HEIs activities their effectiveness and
development or their failure to involve the lack of such measurement
mechanisms.
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