Performance-based research funding and its impacts on research organizations

Performance-based research funding systems (PBFS) allocate direct institutional funding to universities and other public research organizations based on an assessment of their research. They appear in three main types: evaluation-based funding, indicator-based funding, and funding contingent on performance agreements. Combinations are possible. The purpose of this chapter is to discuss potential problems with PBFS and their possible solutions from the perspective of universities and other research organizations that are exposed to PBFS. The argument will be that the potential problems with PBFS depend on three factors, 1) the type and design of the system, 2) the strength of its influence on funding and reputation, and 3) the involvement of the funded organizations in collaboration about the design, implementation, management, and evaluation of the system.