Privatization in Practice: Case Studies of Contracting for TANF Case Management. Creating Incentives to Meet Program Goals


A public agencys choice of performance measures depends on the goals of its program. For most welfare agencies, achieving self-sufficiency for clients is the most important goal. Self-sufficiency can be indicated in numerous ways, however  leaving the welfare rolls, participation in work activities, completion of education or vocational training, employment, job retention, adequate wages and benefits, and earnings gains, among others. Agencies may also establish high quality service delivery as a goal in its own right and so focus on process measures. This is especially true for contracts that cover such case processing functions as eligibility determination.

Performance measures are sometimes used to compare the services provided by different private agencies or, as in San Diego, to compare private and public agencies. One problem with these comparisons is that some providers may have harder-to-serve clients than others. If this is the case, comparisons of performance across contractors will not reflect differences in the "value added" by the provider. This issue is of particular concern in Hennepin County, where providers specialize in serving specific populations.

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