Performance Management of U.S. Job Training Programs

This chapter reviews the effects of performance management systems in federally sponsored employment and training programs. We focus on programs for the disadvantaged because they have the longest history, but the lessons generalize to other programs. We find in our survey that most of the evidence on the effects of performance systems relates to their failure to motivate behavior in the direction of increasing the mean impact of program participation, and their success at inducing cream skimming and strategic responses on the part of program operators. At the same time, little or nothing is known about the effects of performance systems on assignment to service types or on the technical efficiency of program operation. We recommend further research to fill in gaps in our knowledge as well as policy changes to reflect the knowledge we already have. The remainder of the chapter proceeds as follows. The next section lays out the theory behind performance management systems in government programs. The third section provides the historical background on the use of performance management in U.S. employment and training programs, followed in the fourth section by a discussion of the available evidence on incentive effects in employment and training programs. The final section provides conclusions and recommendations.