Public programs focused on improving the employment levels and earnings among economically disadvantaged groups have witnessed an increasing use of outcome-based measures to determine program success. These programs use measures focusing on "results" to gauge program success and to hold public agencies accountable for achieving certain goals. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) which changed the nature of the welfare system by devolving program responsibility to the states, enacting restrictions on the amount of time individuals can receive assistance, and requiring recipients to engage in work quickly required the U.S. Department of Health and Human Services (HHS) to reward states for the success of their cash assistance and welfare-to-work programs (known as the Temporary Assistance for Needy Families (TANF) program) based on their performance on a range of outcome-based measures.
The workforce development system also uses outcome-based performance measures to determine program success. The Workforce Investment Act of 1998 (WIA) which consolidates and streamlines a range of employment and training services for economically disadvantaged individuals requires the state and local workforce development agencies that operate the program to meet specific outcome-based performance measures and provides incentives to do so.(1) The WIA performance measurement system builds on the one developed under the Job Training Partnership Act (JTPA). Administered by the U.S. Department of Labor, JTPA was the principal federal job training program prior to WIA for economically disadvantaged youth and adults, dislocated workers, and others who faced significant barriers to employment.
This paper describes the experiences of programs designed to improve the employment prospects and earnings of economically disadvantaged adults particularly welfare-to-work programs in using outcome-based performance measures. To provide context, the paper begins with a review of the literature on the goals and defining elements of performance measurement systems. Next, the paper identifies issues that are critical to address when developing and using outcome-based performance measures in welfare-to-work programs. It also reviews studies that have described and assessed the use of outcome-based performance measures in the welfare and workforce development systems at the federal level and then turns to a discussion of similar initiatives at the state level. The paper concludes with a discussion of the lessons drawn from these experiences.