Students and Universities - Innovation, Universities, Science and Skills Committee Contents

Memorandum 56

Submission from the Institute of Directors

  Policy relating to higher education is of great interest to the Institute of Directors (IoD) and its members, and we are pleased to be given the opportunity of contributing to the current inquiry by the House of Commons Innovation, Universities, Science and Skills Committee into students and universities. The inquiry is broad based, but we focus our contribution on the issue of the degree classification system. Observations on this, and on standards in higher education, are set out below following some introductory remarks about the IoD.

About the IoD

1.  The IoD was founded in 1903 and obtained a Royal Charter in 1906. It is an independent, non-party political organisation of approximately 50,000 individual members.[175] Its aim is to serve, support, represent and set standards for directors to enable them to fulfil their leadership responsibilities in creating wealth for the benefit of business and society as a whole. The membership is drawn from right across the business spectrum. 83% of FTSE 100 companies and 64% of FTSE 350 companies have IoD members on their boards, but the majority of members, some 71%, comprise directors of small and medium-sized enterprises (SMEs), ranging from long-established businesses to start-up companies.

2.  IoD members' organisations are entrepreneurial and growth orientated. More than two-fifths export. They are at the forefront of flexible working practices and are fully committed to the skills agenda: over 90% of members' organisations provide training for their employees and 70% provide training leading to qualifications. Skills development also constitutes a key part of directors' approach to maintaining and sharpening their organisations' competitive edge during the downturn: 47% plan to keep investment in training at the same level in 2009, and 41% plan to increase training spend. Members' organisations typically require a highly qualified workforce: the average proportion of jobs in members' firms requiring employees to be qualified to Level 4 is over 50%. 52% of members' organisations employ recent graduates.


  3.  Key points in the IoD's memorandum include:

    — The IoD supports the current honours degree classification system. Whilst imperfect, it is well understood by employers and remains an important recruiting aid. The system provides a simple but valuable metric early in the recruitment process and an insight into the calibre of potential graduate employees.

    — Many employers will welcome aspects of the new Higher Education Achievement Report (HEAR), including the promise of more information on students' academic achievements. The HEAR should add useful detail to the overall picture.

    — The HEAR will initially be introduced alongside the current classification system. This is sensible. Importantly, it means that the reports will continue to detail the overall classification—or "summative judgement"—of a student's degree. The summative judgement must remain an integral feature of the HEAR. The additional detail of the latter should be a complement to, not a substitute for, the former.

    — However, it was clear from the series of reports published by the Burgess Group that its long term intention was that the HEAR would eventually come to replace the classification system, which it viewed as "no longer fit for purpose". The IoD disagrees with this analysis and believes such a move would be costly and disruptive for employers. The demise of the summative judgement would make the classification system more opaque, not less.

    — Research conducted by the IoD over the course of the last year suggests that directors are generally upbeat about both the quality of their graduate employees and the standard of education provided by universities.


The honours degree classification system

  4.  The IoD opposed moves to jettison the current honours degree classification system in its response to the 2003 White Paper on higher education, in submissions to two subsequent consultations on the topic in 2005 and 2006, and in commenting on the release of the final Burgess report in 2007. The principal reason for this is that, in the form of the "summative judgement" (usually expressed in the form of First; Upper Second; Lower Second; Third; Pass or Fail), the system offers employers a quick and valuable insight into the overall intellectual calibre of an applicant. It is a useful recruitment aid and is well understood by employers.

5.  In arguing that the current classification system was no longer "fit for purpose", the Burgess Group—the body convened to examine the measurement of student achievement—argued that "the summative judgement thresholds distract and detract from information that conveys a fuller understanding of the skills and knowledge that the student has acquired."[176] It is important to recognise, however, that employers do not approach the summative scale with an expectation that it will distil into a single grade, with absolute accuracy, the entire range of a candidate's abilities. On the contrary, businesses typically adopt a holistic approach to recruitment, for example through the use of interviewing, to investigate skills, abilities and interests beyond academic achievement.

6.  A degree classification is one factor among many in a recruitment process. It is also a starting point, not the finishing line. It is an indicator of calibre, not the final word. It is also a factor that loses potency with the passage of time: as individuals enter the labour market following graduation, the significance of degree classification is diluted; work experience, skills and knowledge will assume greater significance for subsequent employers. And, although we are not aware of specific research in this area, it is also probable that size of organisation will impact on how employers approach the use of degree classifications. For example, formal "sifting" processes, with organisations only considering applications from candidates with a First or Upper Second, is likely to be more commonplace in large businesses running extensive graduate recruitment schemes than in small businesses with fewer vacancies.

  7.  IoD research from 2006 suggests that members' organisations adopt a relatively sophisticated approach to recruitment and selection. The vast majority produce detailed job descriptions and person specifications when recruiting.[177] In the selection process itself, 76% use structured interviews (eg deploying questions derived from a person specification form); 66% use unstructured interviews (eg biographical questions derived from a candidate's c.v.); 38% use psychometric tests (eg tests of ability and personality); 22% use psychological tests (eg tests of motivation); and 21% make use of assessment centres.[178] Although this data covers members' recruitment practices in general, not merely the recruitment of graduates, it indicates the importance employers place on a thorough assessment of potential employees' abilities and attributes.

  8.  To underline this point, and with reference to graduates in particular, employers are placing great emphasis on their wider "employability" skills—the more generic and transferable skills, attributes and abilities (other than technical competence) that make an employee an asset to their employer. In an IoD survey conducted in October 2007, 64% of graduate recruiters said that graduates' employability skills were more important to them when recruiting than the specific occupational, technical or academic knowledge and skills associated with the individuals' degree. 23% thought that the two sets of skills were equivalent in importance, with only 12% believing that employability skills were less important.[179] Nor are the degrees themselves necessarily the only focus of attention when it comes to qualifications. When questioned in June 2008, 64% of directors agreed that employers took A level results into account when recruiting young people because they were a good guide to ability. 44% said the same for GCSEs.[180] For these reasons, the IoD disagrees with the Burgess Group assertion that there is "conclusive evidence" that while the summative judgement "endures", "it will actively inhibit the use of wider information."[181] The IoD believes that current practice suggests otherwise.

  9.  In response to representations from unconvinced stakeholders, the Burgess Group tempered its original proposals and recommended that, in the short to medium term, the HEAR should continue to contain an overall summative judgement. Nevertheless, as the HEAR became established, it intended that "the existing degree classification system will decline in importance until it should no longer be considered necessary", though it did not "assume this will be easily achieved".[182] The IoD disagrees with this intent. Were the summative judgement to be excised from the HEAR after such a period of "transition", there would undoubtedly be a significant administrative cost for employers. Rather than having a single indicator supported by additional data, employers would be faced with a wealth of module marks and other performance data which would be much more challenging to interpret. This would not only be burdensome for those businesses recruiting for positions attracting multiple graduate applicants. It would also impact sharply on small businesses, which typically are not able to draw upon dedicated human resource support.[183] The move might also result in the unintended consequence of employers, faced with copious information which they struggle to decipher, placing increasing emphasis on the awarding institution as a differentiating factor.

  10.  The question is one of balance. There is no perfect system. It was clear from the Burgess Group's analysis of international practice that a new system is not waiting to be parachuted in. Whilst the IoD remains convinced of the need to retain a summative judgement, therefore, it also supports the move to spread employer awareness of, and access to, greater information relating to students' studies and achievements through the HEAR. This combination of approach enables the overall grade to be complemented and contextualised by a more detailed record of students' accomplishments. As long as the HEAR itself is user-friendly—being concise, clear, and as standardised as possible—its contents will be of interest to employers.

  11.  In voicing support for the current classification system, the IoD simultaneously recognises that it is imperfect. It is valid and legitimate to flag areas of concern. Two particular issues seen from an employer's perspective are the comparability of degrees and the increasing proportion of students awarded First class or Upper Second class degrees.

  12.  To take comparability first, the final report of the Burgess Group observed that as the UK higher education sector comprised a large number of autonomous institutions, themselves consisting of a wide range of different departments, variation in assessment and marking practices were "inevitable, and in many cases, both necessary and warranted."[184] Amongst other points, the Group noted that:

    — the distribution of degree classes varies between subject areas;

    — the choice of assessment method (eg coursework versus examination) influences classification; and

    — the method used to determine the classification influences the outcome, as do the particular regulations adopted by an institution in respect of assessments and awards.

  13.  Evidently, there are obvious questions about the genuine equivalence of degrees between institutions, departments and subjects. To add to the mix, a report by the Higher Education Policy Institute in 2006 also suggested significant differences in the workload of students at different institutions.[185] Of course, absolute equivalence is an unrealistic aim. That said, the IoD backs the recommendation of the Burgess report that the UK higher education sector should collectively consider how greater clarity and consistency could be brought to assessment practice. Efforts by universities to secure greater commonality of approach in the way that degrees are assessed—both between institutions and between subjects—would be welcomed by employers. Universities are independent, autonomous organisations and their right to set their own procedures must be respected. Nevertheless, there is an obvious gain in clarity that would benefit businesses and students alike. Finally, it should also be recognised that issues of consistency and comparability would not all be magically resolved by the phasing out of the current classification system.

  14.  The debate about the classification system also takes place against a backdrop of an increasing proportion of students attaining top degrees. According to the UK Data Archive, the proportion obtaining first class or upper second class degrees was 31.3% in 1972, 32.2% in 1977 and 34.2% in 1982.[186] Since then, the proportion of degrees being classified first or upper second class has risen steadily to reach 57% in 2006-07.[187] This can make it correspondingly more challenging for employers to distinguish between the best candidates, not dissimilar from the way in which an increasing proportion of students with good A level grades can make it more difficult for universities to select their own intake. But the appropriate response to this trend, in the IoD's view, is not to remove the overall grade such as "A" at A level or "Upper Second" at degree level, but to offer greater insight into the achievements that make up this award as a complement to the summative judgement.[188]

IoD members' views on the quality of education provided by universities

  15.  A further strand of the Committee's inquiry is the monitoring of degree standards and the level of confidence in the value of degrees awarded by universities in the UK. Clearly, the issue of quality in higher education is an extremely important one, particularly in the context of the forthcoming government review of tuition fees. If the fee cap is raised, this will only be tenable if the standard of provision remains high or, indeed, increases. Ultimately, price must reflect quality.

16.  Over the course of the last year, the IoD has published two pieces of research giving an insight into businesses' perspective on the quality of education provided by universities, and of students themselves. Overall, IoD members are generally upbeat:

    — 52% of directors surveyed in October 2007 said that their organisations recruited recent graduates. Of these, 71% were satisfied with their overall quality (12% dissatisfied); 68% were satisfied with their occupational and technical knowledge (9% dissatisfied); and 55% were satisfied with their wider employability skills (18% dissatisfied).[189]

    — 51% of directors believe the quality of education provided by universities to be good or excellent; 35% to be average; and only 10% to be poor. This compares very favourably to directors' reflections on the performance of other areas of the education system (schools: 22% good/excellent; further education colleges: 31% good/excellent).[190]

    — However, a greater proportion of directors believe that the quality of education provided by universities has declined (35%) since 1997 than believe it has improved (27%, with 32% believing it has stayed the same).[191] Again, however, this compares favourably to other areas of the education system. The fact that a significant minority of members believe that standards in higher education have deteriorated may, indeed, reflect their more pessimistic view of quality in the pre-university system.[192]

  Thank you once again for giving the Institute of Directors the opportunity to submit evidence to the Committee's inquiry. We hope you find our comments useful. If you need any further information about the points raised in this submission, please do not hesitate to contact us. We have included a copy of the 2008 IoD Education Briefing Book, referenced in this paper, for your interest.

December 2008

175   As at 15 August 2008, the IoD had 50,583 members. Back

176   Beyond the honours degree classification. The Burgess Group final report (Universities UK, October 2007), p. 32. Back

177   Person specifications describe the essential attributes and qualities that are required of someone to perform well in a given position. Back

178   Source: Q2 2006 IoD Business Opinion Survey. Fieldwork was conducted between 12 and 23 June 2006. Back

179   Source: Graduates' employability skills (IoD skills briefing, December 2007). A representative sample of 500 directors was surveyed on the IoD's behalf by GfK NOP in October 2007. The paper is available on the IoD website at:

180   Source: IoD Education Briefing Book 2008 (IoD, August 2008). A representative sample of 500 directors was surveyed on the IoD's behalf by GfK NOP in June 2008. For the purposes of the survey, "young people" were taken to be those under the age of 25. The Briefing Book is is available on the IoD website at:

181   Beyond the honours degree classification. The Burgess Group final report (Universities UK, October 2007), p. 5. Back

182   Beyond the honours degree classification. The Burgess Group final report (Universities UK, October 2007), p. 43. Back

183   74% of IoD members' organisations with fewer than 50 employees have neither an HR department nor HR manager. Back

184   Beyond the honours degree classification. The Burgess Group final report (Universities UK, October 2007), p. 25. Back

185   B. Bekhradnia, C. Whitnall & T. Sastry, The academic experience of students in English universities (Higher Education Policy Institute, Report Summary 27, October 2006). Back

186   Source: UK Data Archive. These are "ball park" figures as there may be continuity issues between pre-1995 figures (held by the Data Archive) and post-1995 figures (held by the Higher Education Statistics Agency). Information provided by a member of the Data and Support Services team, 13 October 2005. Back

187   Source: "Qualifications Obtained" data tables, Higher Education Statistics Agency

188   The analogy perhaps ought not to be stretched too far, but the Government's policy response to the increasing proportion of students getting excellent A level grades has been to seek to introduce greater "stretch" and new ways of recognising high achievement. The latter includes the introduction of a new starred A grade from 2010. In other words, the grade scale is being lengthened, not condensed or removed. Back

189   Source: Graduates' employability skills (IoD skills briefing, December 2007). A representative sample of 500 directors was surveyed on the IoD's behalf by GfK NOP in October 2007. The paper is available on the IoD website at:

190   Source: IoD Education Briefing Book 2008 (IoD, August 2008). A representative sample of 500 directors was surveyed on the IoD's behalf by GfK NOP in June 2008. The paper is available on the IoD website at:

191   Source: IoD Education Briefing Book 2008 (IoD, August 2008). Back

192   This is, in part, backed up by an IoD survey of 100 admissions tutors conducted earlier this year and included in the 2008 IoD Education Briefing Book. Although survey is evidently of a limited sample, and the results are a more complex affair than demonstrating a general perception of decline in standards, 72% of the admissions tutors surveyed thought that the quality of students beginning a university course in their department had either remained the same (32%), or had deteriorated (41%), over the course of their involvement with admissions. Back

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