NCWD/Performance Measures Adjustment and Incentives Strategies

Since the late 1970s and early 1980s, performance measures and standards, especially outcome-oriented ones, have become increasingly commonplace. Increased accountability is generally seen as beneficial, not just by the taxpaying public, but also by policymakers, administrators, and participants. In this age of accountability, however, adjusting performance to account for different characteristics and expected outcomes and the use of incentives become increasingly important strategies. In recognition of the emerging importance of this issue, the National Collaborative on Workforce and Disability/Youth developed "Performance Measures Adjustment and Incentives-Key Strategies for Providing More and Better Services to Harder to Serve Populations in the Age of Accountability," prepared by Christopher T. King, Director, Ray Marshall Center for the Study of Human Resources, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin. The paper is available at the NCWD/Youth website.

This paper discusses intended and unintended consequences of performance measurement and explores how performance adjustment and incentive mechanisms can counter some of these effects and encourage effective service delivery to disadvantaged and harder-to-serve populations.

The paper makes the following recommendations:

• Data collection and reporting systems must be improved considerably at all levels for performance adjustment strategies to function well.
• Mixed strategies for performance adjustment and incentives should be adopted, with variations as necessary and appropriate depending on the nature of the program and its associated structures, traditions, and participants/students.
• Approaches to measuring and adjusting performance, as well as creating incentives for encouraging more and better service for disadvantaged youth in these programs should strive for complete transparency. Public education and technical assistance and training will be needed to guard against the pitfalls of poor understanding and faulty implementation follow the use of any new performance adjustment and incentives approaches.

On May 9, 2006, the Employment and Training Administration of the U.S Department of Labor (ETA) issued TEGL 28-05 “ETA’s New Strategic Vision for the Delivery of Youth Services Under the Workforce Investment Act (WIA): “Expanding ETA’s Vision for the Delivery of Youth Services under WIA to include Indian and Native American Youth and Youth with Disabilities.” This TEGL informs states and local areas of the expansion of the agency's strategic vision -- originally set forth in TEGL 3-04 -- to serve out-of-school and the most at-risk youth, to include Indian and Native American youth and youth with disabilities under the Workforce Investment Act.

Section 4 of the TEGL addresses critical strategies including:

• Focus on Alternative Education
• Focus on Business Demands, Especially in High-Growth Industries and Occupations

TEGL 28-05 also states that ETA intends to provide guidance to the WIA youth system about employer driven youth development programs such as the High School/High Tech program. More information about this program can be found on the HS/HT section of the NCWD/Youth website.

TEGL No. 03-04, ETA’s initial “Strategic Youth Vision” statement referenced a “Focus on Improved Performance” as a goal and identified implementation of the OMB common measures for youth for programs in its national One-Stop system as a key strategy for achieving that goal. On February 17, 2006, ETA issued TEGL 17-05, Common Measures Policy for the Employment and Training Administration’s (ETA) Performance Accountability System and Related Performance Issues. This guidance is intended to replace existing guidance with a single, unified Department of Labor guidance document on the common measures and WIA Section 136 performance accountability system.