"The overall aim of the article is to discuss different ways of assessing and handling performance differences of higher education institutions caused by varying initial conditions with regard to the student populations' diversity. We introduce and compare two approaches we expect worthwhile discussing in the German context: On the one hand, the classification approach identifying diversity between higher education institutions is reflected. A critical look is taken at the possible repercussions of classifications on the design of university programmes.On the other hand we introduce an alternative approach that has so far been rarely adopted in Europe. The “Australian model” is based on a statistical method that levels out different initial positions for performance indicators. This will help higher education institutions to respond adequately to different social requirements and needs of students. An arithmetical example illustrates the way the model functions. We conclude that the “Australian model” can avoid some problems of the classification approach and an adaptation would be worthwhile for Germany. "

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