Institutional rating systems

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Institutional rating systems involve the assignment of comparative ratings or grades across a category of institutions. Institutional rating systems are typically designed to increase public awareness of institutions' assessed performance as an incentive for improvement. For example, schools might receive grades on an A-F scale for the quality of their facilities, student learning, after school programs, or school safety. Outside of Education, restaurants might be rated on the outcomes of their food safety inspections. Rewards under the rating system include positive public awareness—of particular importance when customers (e.g., students) have choices in which organizations to attend—and some systems may require minimum grades to continue operation or tie aspects of rated performance to funding.




Under increasing pressure from parents in the area who charge that the performance of area schools is a "black box," the Metropolis School District, a large urban school district, decides to transparently make information available on the performance of each of its schools. Statistical information is collected on variables related to school safety, facility quality, teacher effectiveness, and student performance. In order to make this new information accessible and comprehensible for parents and would-be students, Metropolis School District grades each of its schools on these four criteria and rates the top third of schools as "Above Average," the middle third as "Average," and the bottom third as "Below Average."



Tradeoffs of implementing this policy may include:

  1. "Creaming," in which the most involved parents may withdraw their students from the worst schools, weakening the peer group of the most disadvantaged students with the least involved parents and further obstructing their educational progression.
  2. Correlation-based decision-making, in which suboptimal enrollment or funding decisions are made without regards to their causal impact.
  3. Measurement error leading to misinformation. A school with a disadvantaged student base might be leading to better individual outcomes than such students might have at other institutions, yet parents may make school enrollment decisions based on an overall grade rather than how the institution meets their individual needs.
Compatibility Assessment

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If answered yes, the following questions indicate superior conditions under which the policy is more likely to be appropriate:

  1. Are there multiple schools into which parents can choose to enroll students?
  2. Is the publishing of information on the performance of schools likely to lead to improved school performance?
  3. Is the publishing of information on the performance of schools likely to change student enrollment decisions?


The following questions should be considered when determining how to implement this policy:

  1. What area(s) of performance should be graded?
  2. What metrics will be used to measure performance?
  3. What media will be used to disseminate performance results?
  4. What incentives, if any, will be tied to performance under graded areas?



  • For area type(s): Urban, Suburban, Rural. Institutional rating systems are most often employed in cases in which there are a sufficiently high number of institutions among which individuals can choose and the government may evaluate. When adopted at the local level, it is likely to be most appropriate for urban areas, but it may also cover institutions in rural areas if adopted at a state or provincial or national level.






  • Constituent Groups - School Administrators and Leaders. Assumption: Increased transparency associated with the performance of schools, increasing accountability for administrators.
  • Associations - Restaurants. Assumption: Risk of negative ratings likely to be viewed as significant threat by industry.
  • Labor Unions - Teachers. Assumption: Increased transparency associated with the performance of schools, increasing accountability for teachers and supporting narrative of teacher responsibility for student performance.






  1. Rating Plan Would Put Colleges Into One of Three Categories." Perez-Pena, Richard. The New York Times. December 19, 2014.
  2. NYC Schools Accountability Tools: Find a School Quality Report.
  3. Restaurant Inspection Results (Letter Grades)]
  4. LA County Department of Health Food Facility (Restaurant/Market) Rating]
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