Not a good idea
(After two months of inactivity due to my own hectic activity, this blog comes back to life.)
Deducing the good performance of a university or teacher from their student success rate is definitely not a good idea.
Sucess is desirable, of course, for each individual student; I wish the best for every human being. And if every student is able to achieve the desired goals, 100% of success is fine. But that's not usually the case; and if some student has not reached the required skills, they should fail. There's nothing intrinsically wrong in that fact. Gaining knowledge requires hard work; if someone is not able to do that work, failure is the proper result. That does not imply any judgement on the student as a whole person; a failed exam is just a temporary state that applies for a very small set of skills only.
In that sense, the best teachers and institutions are able to perform a fine analysis of the acquired knowledge, and give awards and certificates accordingly, in a very precise and trustworthy way. If the goals of universities are to expand knowledge (knowledge, not degrees), this selection process is essential; as error prone as it may be, it's their duty.
Obviously, the opposite approach is equally wrong. Universities are not there to put extra, unnecessary difficulties and burdens; so if a teacher or university has a very high failure rate, no assumption can be made about the goodness of their learning process, based on that measure alone. Success rate is only one variable, that can be analyzed in conjunction with many others. A very high success rate with poorly prepared students may be a bad sign. A very high failure rate with good students may be also a bad sign. But that's only a clue, not the explanation of any theory.
Problems arise when universities and teachers are considered to be the manufacturers of graduates (starting from raw-material-students) in a production process. Under that approach, if a student does not become a graduate in a clean and direct process, teachers or universities are guilty, and every failure is a defective item.
I've already argued that universities are not there for producing graduates and giving awards. For that purpose, you only need a piece of paper and a handful of administrative processes. You don't even need any effort on the student's side. (Is that really what we want our universities to become?) If you want to expand knowledge, however, things get much more complicated. Keep this in mind whenever you see some academic authority questioning some teacher's work or making strategic decisions based only on success rate.
If you want a high success rate, that's really easy. If you want to offer a good training, that's really hard. If you want to produce items, set up a chicken farm or a brick factory, instead of thinking about education.
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