EXAMINATION OF GRADING PATTERNS DURING ONE INSTITUTION’S TRANSITION TO A RESPONSIBILITY CENTER MANAGEMENT BUDGET MODEL

Abstract

This study examines grading patterns during one intuition’s transition to a responsibility center management (RCM) budget model. RCM is intended to focus an institution on resource growth and cost control, and the model incentivizes and rewards these behaviors. The adoption of RCM is becoming more widespread across the United States, especially as institutions are experiencing declining enrollment and shrinking state support (Barr & McClellan, 2018; State Higher Education Executive Officers Association [SHEEO], 2021; The Pew Charitable Trusts, 2019). This has led to budget management being cited as a top priority for institutional leaders (Bass et al., 2021; Rylee, 2011). This decline in enrollment and shrinking state support makes institutions more reliant on existing and prospective students as their primary source of revenue. Through the lens of Resource Dependency Theory (RDT) it is reasonable to assume that institutions may engage in behaviors and practices to maximize their relationship with students. Moreover, as students continue to see themselves as consumers who deserve high grades and a degree, institutions have changed their grading practices to attract and retain these students, and research has shown that students take advantage of these practices to protect their GPA (Bromley et al., 1978; Goldman, 1985). Additionally, research has shown that students, in part, make course choices based on difficulty and expected grade (e.g., Barr et al., 2009; Butcher et al., 2014; Fournier & Sass, 2000; Sabot & Wakemin-Linn, 1991). Therefore, it is reasonable to hypothesize that institutions may transition to RCM to focus on resource growth, and given their reliance on student enrollment, may engage in practices and behaviors to maximize the relationship between the institution and the student. These actions may have unintended consequences, such as grade inflation. My study begins to examine if grade inflation is an unintended consequence of a transition to RCM by exploring what happened to grades during one institution’s transition to RCM. The results of my study show that at Public Research University (PRU), a pseudonym, grades continued to increase during and after the implementation of RCM, with a statistically significant increase occurring in the year immediately following PRU’s “hold harmless” year. My results also show that grades continued to rise during and after PRU’s transition to RCM across all departments when categorized based on historical GPAs, selectivity levels, and enrollment levels. This study is intended to raise awareness of the far-reaching effects that central university decisions, such as budget model choice, may have across the entire institution – both intended and unintended.