A 1979 study conducted by the Colorado Commission on Higher Education to develop a plan for assessing and increasing faculty productivity is described. The central issue was the demand for individual faculty, departmental, and institutional autonomy versus demand by the political system for evidence that the faculty it funds produces adequate valued outcomes. In addition to conferring with Colorado institutional and state agency staff, higher education officers and researchers in Minnesota, California, Wisconsin, and Illinois were contacted regarding their policies and study findings. A review of the literature on formula budgeting, program evaluation, faculty load analysis, and productivity was also conducted. It was suggested that a workable approach to assessing and increasing faculty productivity is an organized, explicit and publicly visible process of institutional program review and evaluation, monitored by the state coordinating agency to gain public credibility. However, meaningful assessment and valid judgment of faculty productivity should be approached at the decentralized level of the faculty peer group. It is suggested that the problem of making this peer evaluation credible to the public is unresolved. A policy was developed in Colorado in 1980 calling for each state institution to develop a plan for reviewing each academic program at least once every seven years, and activities to be included in institutional review are specified. (SW)