Measuring the performance of private higher education institutions in Malaysia

Purpose - The purpose of this paper is to propose a comprehensive model using balanced scorecard (BSC) approach instead of the current ranking system to measure the performance of private higher education institutions (PHEIs) in Malaysia as the ranking system is deemed inaccurate and certain items in the system are redundant. Design/methodology/approach - A cross-sectional survey was conducted involving 105 academicians from seven PHEIs in Malaysia. The data were analyzed for factor analysis using Principal Axis method with Promax rotation in IBM SPSS Statistics Version 20. Findings - The result demonstrates that 22 items were successfully extracted into four dimensions that suited the BSC approach with acceptable range of composite reliability and factor loading values. Research limitations/implications - The paper reveals the issues of ranking system of the current method in measuring performance of PHEIs. The proposed BSC model should be tested on more PHEIs to increase its validity and reliability. Practical implications - This research analyzes the performance of PHEIs from academicians' perspectives based on the four BSC perspectives. It can be considered as an alternative model for PHEIs' managers to measure performance of PHEIs in Malaysia rather than the current ranking system. Social implications - In the midst of intense competition in private higher education industry in Malaysia, it is crucial to understand that a high performance PHEI is expected to deliver quality tertiary education. This research assists the society to evaluate the strength of a particular PHEI in Malaysia, and further enable them to make a deliberate choice on which PHEI to enter. Originality/value - A growing concern for sustainability of PHEIs requires a method to be undertaken by the authority to measure PHEIs' performance. This paper addresses this concern by offering 22 items to measure PHEIs' performance and dictating the need to manage PHEIs in a strategic manner, not by ranking systemper se.