Banking on Psychological Principles

Universities are businesses, although we academics do not like to think of them as such. However, we are not in business to make a profit, but rather to produce teaching and research. Thus, our bottom line needs to be measured in quality and productivity of our teaching and our research. Money is important, of course. In times of constrained resources, generating additional revenue and using every dollar wisely are critical for achieving quality. Quality is expensive. At the University of Florida, the president and I introduced an incentive approach to management that we call the "Bank." Introduced in 1996, the Bank is a tool that helps the university use resources effectively, measure quality, and create incentives for improvement. It rests on the basic psychological principle that reinforcement leads to an increase in the behavior that precedes it.