An Agency Theory Perspective on Student Performance Evaluation

The emphasis in recent research on the responsibility of college and university business instructors to prepare students for future employment underscores a need to refine the evaluation of student performance. In this article, an agency theory framework is used to understand the trade-offs that may be involved in the selection of various approaches to student evaluation. Understanding these trade-offs may be particularly important as faculty members seek to balance competing obligations, such as research and service requirements, while ensuring instructional effectiveness. This article presents propositions for examining how various institutional, instructor, and student characteristics influence the selection and use of student performance evaluation techniques (i.e., exams, papers, and group assignments). In conclusion, we suggest that agency theory may serve as a foundation for understanding current evaluation practices and guiding instructors in their selection of appropriate evaluation mechanisms.