In 2006–2007 ten public universities were utilizing responsibility center management (RCM), and that number increased to 24 in 2014–2015 (Jaquette, Kramer, and Curs, 2018), but little is known about the relationship between the implementation of RCM, faculty composition, and faculty compensation. Inequities in faculty composition and salaries exist based on gender and race/ethnicity. My study explored whether the implementation of RCM, an increasingly popular budget model in public higher education, was associated with further faculty salary and compositional inequities by gender and race/ethnicity. Deans, as heads of revenue centers under RCM, have increased budgetary power and decision-making responsibility. Organizational justice theory, specifically the tenets of distributive justice and procedural justice, grounded this study by connecting the implementation of RCM to the diffusion of decision-making throughout the organization and potential association with inequities in faculty composition and faculty compensation. This quantitative study examined the relationship of RCM with institutional average salary and numerical proportions of assistant professors on the tenure track at public, doctoral universities based on the 2015 Basic Carnegie Classification. I used difference-in-difference estimation to compare institutions that implemented RCM (treatment group) to institutions that did not (control group) to determine whether there were differences in salary and proportional trends for assistant professors by gender and by gender and race. In addition, I explored engineering in a specific set of analyses because it has been cited as a field that should especially benefit from an RCM budgeting approach. I compared the change in proportions of assistant professors of engineering by gender and by gender and race/ethnicity at universities within the sample. Finally, the annual salaries of a subset of assistant professors of engineering within the sample of doctoral institutions in the treatment and control groups in Ohio were compared. Across these different analyses, I did not find evidence that RCM implementation between FY2012 – FY2017 had a significant effect on average institutional salary generally or by gender or race/ethnicity for assistant professors broadly or within engineering, specifically. Lacking a comprehensive dataset with institutional and individual predictors of faculty compensation and composition, and as RCM models vary among institutions, these findings should be interpreted cautiously. As RCM did not appear to be associated with any changes in faculty composition or compensation practices, I did not find evidence that RCM implementation had a significant impact on the procedural justice (i.e., decision-making criteria and processes of deans or department heads) or distributive justice (i.e., salary amounts or proportions of who was hired by gender and race/ethnicity) of faculty composition or faculty compensation at public, doctoral universities. / Doctor of Philosophy / My study explored whether the implementation of responsibility center management, an increasingly popular budget model at public universities, was associated with differences in faculty salary and faculty numbers by gender and race/ethnicity. Deans, as heads of revenue centers under RCM, have increased budgetary power and decision-making responsibility. Organizational justice theory, specifically the tenets of distributive justice and procedural justice, grounded this study by connecting the implementation of RCM to the diffusion of decision-making throughout the organization and potential association with inequities in faculty composition and faculty compensation. I examined the relationship of RCM with institutional average salary and numerical proportions of assistant professors on the tenure track at public, doctoral universities. I compared institutions that implemented RCM to institutions that did not to determine whether there were differences in salary and proportions for assistant professors by gender and by gender and race/ethnicity. In addition, I explored engineering because it has been cited as a field that should especially benefit from an RCM budgeting approach. I compared the change in proportions of assistant professors of engineering by gender and by gender and race/ethnicity. Finally, the annual salaries of assistant professors of engineering at two universities in Ohio were compared. Across these different analyses, I did not find evidence that RCM implementation had a significant effect on salary or proportions of assistant professors; however, as my study had lots of limitations, and as RCM models vary among universities, these findings should be interpreted cautiously. As RCM did not appear to be associated with any changes, I inferred that RCM implementation did not have a significant impact on the procedural justice (i.e., decision-making criteria and processes of deans or department heads) or distributive justice (i.e., salary amounts or proportions of who was hired by gender and race/ethnicity) of faculty salary or proportions at public, doctoral universities.

Purpose . The purposes of this study were to (a) examine and describe the purpose and characteristics of responsibility center management (RCM) systems at two institutions of higher education, (b) describe the RCM system used at each institution at the school level of the organization, (c) examine and analyze the implementation of RCM at each institution, (d) identify the advantages and disadvantages of RCM systems at each institution, (e) examine and describe the impact of the RCM system on various constituencies affected by implementation of the process at each institution, and (f) provide data which may assist institutions of higher education in determining whether or not to institute a RCM model to assist administrators in the budgeting process. Procedure . The researcher conducted 12 interviews. Respondents included one provost, one chief financial officer (CFO) and one dean from each institution, and six faculty (three from each institution) who had knowledge of, in varying degrees, and/or responsibility for the school-level implementation of RCM systems. These individuals provided information regarding their perceptions of their respective RCM systems and related activities associated with the implementation process at each institution. Twelve content analyses were developed; two provost content analyses, two CFO content analyses, two dean content analyses, and six faculty content analyses. Two case studies were developed from the content analyses: one case study between the faculty and the administration at each institution. In addition, the researcher developed a cross-case summary from the case studies. Conclusions . The administrators in this study felt that RCM systems were implemented at each institution whereas; the faculty reported that this was not the case. Other significant findings included: (a) all the respondents indicated that each person or office might assume different roles depending on the stage of the RCM process however, good budget planning and performance was facilitated by stable environments; (b) ten out of the twelve respondents reported they could be responsible for their programs and accountable for fiscal integrity if they acted upon accurate and timely information; (c) four out of the six faculty pointed out that RCM implementation was more difficult at smaller institutions primarily, in increasing efficiency and reallocation of resources; (d) two administrators and six faculty raised concerns that information usually flowed downward in the authority hierarchy; (e) two administrators and six faculty indicated that tension resulted from the academic centers wanting more decentralization than the administration; (f) four out of the six faculty reported RCM implementation had occurred on paper only, without sufficient faculty input, and with insufficient information regarding the system's implications; and (g) all the respondents further indicated that they reserved judgment on the implementation of RCM systems until decentralization and autonomy for the academic centers is embedded in the institutional culture.

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. / Educational Leadership