Privatization in Practice: Case Studies of Contracting for TANF Case Management. Performance Measures Should Be Targeted, Yet Comprehensive Enough to Avoid Unintended Consequences


In selecting performance measures to include in contracts, public agencies must balance several conflicting objectives. To be effective, the performance measures should be targeted to only a small number of key program goals. This focuses providers efforts and limits the data collection burden on clients, public agencies, and contractors. Performance measures in TANF case management contracts frequently focus on aspects of self-sufficiency, such as job placement and retention. Those contracts that include case-processing functions, such as eligibility determination, feature measures of accuracy and timeliness.

By focusing attention on a limited set of measurable goals, however, a contract may inadvertently encourage providers to act in ways that contradict other program objectives. If, for example, the performance measures focus only on placement, the contractor may have the incentive to get the client a job quickly, but not necessarily to find the client a good job. Contractors may also lack incentives to spend time assessing the needs of clients who are unlikely to become employed. Including performance measures that address the quality of services helps guard against these potential unintended consequences.

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