Performance Agreement in German Universities: Management by Objectives in Higher Education and University Governance

Abstract

In Germany, the performance agreement (PA) came into wide use after deregulation measures were introduced in the higher education sector around the 2000s. It prescribes the objectives for higher education institutions (HEIs) to pursue their operations, wherein, performance is examined ex-post and reflected in the subsequent budget. Based on the New Public Management (NPM) principles, the PA has much in common with the Mid-term Goals/Plans for Japanese national universities.

The PA plays a significant role in performance-oriented resource allocation. However, it does not work as well as it should, because performance measurement cannot be conducted strictly enough owing to the particular nature of higher education. Despite this limitation, PA is widely used for its other function, promoting dialogue between internal and external stakeholders and strategic university management.