Florida's Valencia College released faculty to work in industry in hopes of making vocational coursework more relevant and increasing job-placement rates.
Indian River State College, also in Florida, monitored the rates at which students dropped courses and encouraged faculty with high course-withdrawal rates to work with more successful colleagues to increase retention.
Community colleges in Washington state eliminated fees and decreased credit requirements to help students complete short-term occupational certificates.
Many academics are wary of performance funding, fearing instructors will be told to pass students along, even if they haven't earned passing grades, to keep the money flowing.
That's a real concern, says CCRC's Dougherty. "Some faculty members feel under pressure to be careful about giving out low grades," lest students get discouraged and quit.
"There's a lot of pressure to retain every single student no matter what it takes," said a Florida community college professor interviewed for a study. "We have to report every conference we've had, the outcome, if the student wasn't retained, why, how many efforts were made."
In addition, there's a risk that colleges will narrow their missions to boost performance points.
Some Florida community colleges cut programs that trained students for low-wage jobs, such as childcare provider and nurse assistant, because job placements below $10 an hour don't earn them performance points.
One college closed its Center for Disabilities because its completion and job-placement rates didn't justify the cost.
It's not easy to design a strong PF 2.0 system, Dougherty says. "What's a valid job placement? How do you measure that? It will take a while to work out good measures."
Joanne Jacobs writes Community College Spotlight for The Hechinger Report, an independent nonprofit education news site. Jacobs also blogs about K-12 education and is the author of Our School: The Inspiring Story of Two Teachers, One Big Idea and the Charter School That Beat the Odds.