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TITLE Using Performance Management To Achieve QualityProgram Results. A Technical Assistance Guide.Research Report 89-03.

INSTITUTION Laventhol & Horwath, Philadelphia, PA.SPONS AGENCY National Commission for Employment Policy (DOL),

Washington, D.C.PUB DATE May 88NOTE 127p.PUB TYPE Guides - Non-Classroom Use (055)

EDRS PRICE MF01/PC06 Plus Postage.DESCRIPTORS Adult Basic Education; Cost Effectiveness;

*Employment Programs; Evaluation Methods; *FederalPrograms; *Job Training; *Performance Contracts;Postsecondry Education; *Program Administration;Program Evaluation; *Standards; Unit Costs

IDENTIFIERS *Job Training Partnership Act 1982

ABSTRACT

This guide provides assistance in using two pril .rymanagement tools--the performance standards and performance-based,fixed unit price contracts--to achieve satisfactory results in JobTraining Partnership Act (JTPA) programs. The guide is organized insix chapters. Chapter 1 reviews the original purpose of the JTPA andintroduces the investment portfolio management concept as anappropriate approach for management of JTPA programs. In chapter 2,the importance of an effective management process in achieving goodresults is discussed. Chapter 3 focuses on the elements of the localplanning process, the relationship of planning decisions to theperformance standards and local goals, and the linkage betweenplanning decisions and contract specifications. Chapter 4 descrthes aprocess, with examples, for defining performance expectations forindividual activities and program components. Chapter 5 discussessome of the considerations that are involved in establishing amonitoring system and structure of rewards/sanctions that will guideand motivate performance in a direction responsive to the needs ofthe recipients and of employers. The final chapter summarizes thesignificant principles discussed in the previous chapters andprovides suggestions for immediate action. Appendices presentalternative approaches for adjusting the fixed unit payment and threesample performance-based contracting tools. (KC)

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from the original document.

Using PerformanceManagement To AchieveQuality Program Results

A Technical Assistance Guide

Prepared by Laventhol & Horwath

May 1988

Research Report 89-03

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PREFACE

This Guide is part of the Commission's work over the lastyear and a half on performance management under the JobTraining Partnership Act (JTPA). In 1988 the Commissionpublished several technical and po!icy reports in this area andcompleted a major evaluation of the effects of performancestandards in JTPA.

Performance management is the key to success of theprogram and most of all to meaningful investments for theindividuals JTPA serves. The performance management func-tions of the Private Industry Councils (PICs) and the ServiceDelivery Areas (SDAs) in planning, directing, and monitoringservice delivery through the contracting process are the heartof quality achievements for individuals.

Much of the information in this guide is related to the contract-ing process. Although the Commission contracted for theguide prior to the Departn lent of Labor's (DOL) policy reviewof fixed unit price contracting, we believe that nothing in theguide contradicts existing DOL policy in this area. As with othertechnical guides funded by the Commission, readers shouldbe aware that the views expressed in this publication and theexamples used are those of the contractor alone.

We trust tha; the report will prove a useful tool to the employ-rnent and training community in developing contracts thatensure the best training is provided at the most reasonablecost.

3

ACKNOWLEDGMENTS

This guide presents ideas and insights that have beendeveloped and acquired over many years of direct experiencewith job training programs, and through association with a widerange of talented, dedicated job training professionals who,unfortunately, are too numerous to be specifically cited here.

A special acknowledgment goes to Kay Albright, DeputyDirector of the National Commission for Employment Policy,for the original inspiration of this guide, and most significantly,for the patience contributed through numerous hours of con-cept development and refinement. Kay provided a uniqueblend of systems perspective, program operational, andregulatory sensitivity skills that is needed to rationally discussthe multiple dimensions of the issues described in this guide.

A second special acknowledgment goes to the Departmentof Labor/Job Training Division staff in Georgia who have bothchallenged us and provided us the opportunity to bring newideas to the task of effectively managing job training programs.

Other individuals who have provided valuable comments andsuggestions on various drafts of this guide include: RayWorden of the National Commission on Employment Policy;Jim Kinney of the Region V Office of U.S. DOL/ETA; Chris Kingof the Center for the Study of Human Resources at the Univer-sity of Texas; Marian Kern of the Georgia Department of Labor;Mike Gilmore of the North Central Texas Council of Govern-ments; Joe Brannon of the Northeast Florida Regional Plan-ning Council; Neil Gardner of the Minnesota Department ofJobs and Training; Howard Weiss of the Essex County NewJersey Service Delivery Area; and Hugh Davies of theU S. DOL/ETA.

Special Wanks to our colleagues Louise Bertsche and SheilaBaker for helping in editing and producing the guide.

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TABLE OF CONTENTS

PAGE

EXECUTIVE SUMMARY i

PURPOSE OF THE GUIDE ix

ORGANIZATION OF THE GUIDE xiii

CHAPTER 1: Fulfilling the Mission 1

A. The Challenge 1

B. An Investment Portfolio Approach For Improving Results . 3C. Implementation Requirements 8

CHAPTER 2: Performance Management Of Job Training Programs 11

A. Establishing Performance Expectations 12

B. Defining Performance Targets And Operating Standards 13

C. Ensuring Effective Performance 13

D. Achieving Desired Fibsults 14

CHAPTER 3: Setting Performance Expectations 17

A. Developing The Program Design 17

B. Linking The Program Design To Performance StandardsAnd Operational Constraints 22

C. Conclusions 26

CHAPTER 4: Defining Performance Targets and OperatingSpecifications 27

A. Overview Of The Activity Planning Process 27B. Developing Component Work Statements 30C. Conclusions 39

CHAPTER 5: Motivating Service Providers to Meet All PerformanceExpectations 41

,

A. Compensating Performance 41

B. Inspecting Performance 48C. Conclusions 49

CHAPTER 6: Achieving Quality Results 51

APPENDIX A: Alternative Approaches for Adjusting theFixed Unit Payment A-1

APPENDIX B: Sample Performance-Based Contracting Tools . . . B-1

LIST OF EXHIBITS

PAGE

1. The Investment Pyramid 4

2. Investment Pyramid - JTPA Program, 19XX 7

3. Investment Pyramid - JTPA Program, 19XX + 2 9

4. The Performance Management Continuum 15

5. Program Design Options 25

6. Setting Performance Expectations 29

7. Input-Output Specifications (Example) 32

8. Performance Objectives: Classroom Skills Training (Example) . . .33

9. Participant Assignment Standards: Occupational ClassroomSkills Training (Example) 34

10. Work Statement: Occupational Classroom Skills Training(Example) 37

11. Adjustments to Fixed Unit Payment Based on ParticipantBarriers (Example) 45

EXECUTIVE SUMMARY

The Job Training Partnership Act (JTPA) is five years old. Itsenactment and implementation have wrought some significantchanges in the operation of the federal - state - local job trainingsystem. The primary thrust and impact of JTPA has been toestablish a higher degree of performance accountability in theoperation of job training programs. In general, ServiceDelivery Areas have done well in meeting and exceeding theirperformance standards. Yet, questions persist regarding the"quality" of the programs being implemented and the resultsbeing achieved under JTPA.

This guide attempts to provide constructive,practical advice on how to answer the followingquestion in each local SDA: "In an era of perfor-mance-driven systems management with quan-titatively derived rewards and sanctions, howcan an appropriate focus on qualitative programdimensions be established?"

A complete answer entails consideration of long-range visionand goals, the local planning and decision making process,performance expectations and contract standards, monitoringprocedures and performance incentives. Because perfor-mance-based contracting is widely used as a managementtool in the job training system, a particular focus of this guideis achieving quality program results in the context of a perfor-mance-based contracting environment.

LONG-RANGE VISION AND GOALS

As envisioned and articulated by the Congress, the programsand activities authorized by JTPA are an investment in humancapital; and the success of the programs and activities shouldbe evaluated according to a return on investment principle,specifically "increased eroployment and earning.; of par-

Executive Summary

ticipants and reductions in welfare dependency." One ap-proach which has been used to successfully achieve adequatelong-range returns on investments is use of the investmentPyramid."

The Investment Pyramid is a tool for increasing the total yieldfrom an investment portfolio by allocating available investmentfunds across a range of investments with various risk andreturn levels. In the job training context, the InvestmentPyramid can be a valid tool if local managers and decision-makers see their role in terms of managing an investmentportfolio consisting of JTPA and related grant funds; and if theyare able to define a longer-range measure of success such asthe ratio defined by the total reduction in welfare paymentsdivided by total expenditure of grant funds, or total increase inparticipant earnings divided by total expenditure of grantfunds.

Increases in the values of these ratios over time can beachieved, but it requires program managers and decisionmakers to invest in "new and improved" activities and serviceproviders, even if there is a higher level of uncertainty or riskassociated with actually achieving the planned results. Thereare, however, several program-related benefits to assumingthese risks, including increasing the performance potential ofthe program and making the program design more attractiveand responsive to the needs of participants and employers. Inpractical terms, the SDA can not pass all of the risk on to theservice provider; the risk must be shared by both the ServiceDelivery Area and the service provider through adjustments inrequired performance levels and in compensation policies.

THE LOCAL PLANNING AND PERFORMANCEMANAGEMENT PROCESS

Quality program results can only be achieved when serviceproviders and staff are motivated to achieve them. This motiva-tion can be attained by establishing a local managementprocess that produces a consistent set of performance expec-tations, Inspections and compensations that are supportiveof the longer-range goals. Each of these dimensions of perfor-mance management is important because expectations

II

Executive Summary

without inspections are meaningless; inspections without ex-pectations are not fair and become confrontational; expecta-tions and inspections without compensations are notmotivating. Therefore, an effective performance managementprocess consists of four major phases of activity:

Establishing performance expectations and theoverall program design through a planning processthat is documented by the job training plan, activitywork statements, and budgets.

Defining specific performance targets and operatingstandards through a contracting process that isdocumented by the request-for-proposals and actualcontract instruments.

Ensuring effective performance through a monitoringprocess that is documented by monitoring reportsand corrective action plans.

Achieving desired results through a structure ofrewards, sanctions and compensations that focuseson key result areas and desired behaviors/actions.

Collectively, these activities and documents define what iswanted in terms of performance. To be motivating, themanagement process needs to establish a consistent directionand set of priorities through these various management ac-tivities and tools.

SETTING PERFORMANCE EXPECTATIONS ANDOPERATING STANDARDS

To achieve quality program results, local managers anddecision makers must first of all want quality results and bewilling to use the planning process as a vehicle for definingqualitative performance standards. The key planning decisionsrequired to develop the local program design provide substan-tial opportunities for defining qualitative standards are:

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Executive Summary

>> Who will be targeted for service?The decision should use the incidence andseverity of barriers to gainful employment as acriterion for targeting.

>> What types of outcomes will be achieved?This decision provides an opportunity to definestandards for an acceptable job placement onmeasures such as minimum wage level,availability of fringe benefits, and a minimumperiod of job retention. This decision shouldaddress important interim outcomes - e.g., basicliteracy skills - as well as final program outcomes.

>> What occupations and employment sectorswill be,/ targeted for training and placement?

Prow: trn and labor market expvience indicatesthat some occupations and employment sectorsare more accessible and provide greater upwardmobility opportunities for job training targetgroups than others. Priorities should be estab-lished that guide service provider actions andbehavior toward the more accessible and betteropportunities.

>> What win be the mix of activities and servicesto be offered?Identifying specific barriers and skills develop-ment objectives to be addressed, and determin-ing a required responsiveness to individualparticipant needs is part of the process of defin-ing qualitative standards for the design and im-plementation of individual program activities.

In sum, the ability of an SDA to contract for and achieve bothquantitative and qualitative program results is directly in-fluenced by the scope and strength of ::s planning process. Ifthe SDA wants to improve the qualitative dimensions of itsprogram performance, it must incorporate these dimensionsinto its planning, decision-making, and management process.

iv

1 0

"""

Executive Summary

Qualitative planning at the overall program level is not, how-ever, a sufficient condition for achieving quality results. Perfor-mance expectations must be refined down to the level at whichservices are actually provided: individual program activitiesand components. The "work statement" is a useful tool fordefining activity-specific standards. The work statement willinclude the following information:

input-Output Specifications which define the targetgroups to be served, the outcomes to be achieved,the employment sectors to be targeted, and theparticipant employment barriers to be addressed;

Performance Objectives and Standards whichdefine expected and minimally acceptableperformance levels on relevant performanceindicators;

Participant Assignment Criteria which establishminimum and maximum criteria for enrollment in theactivity and which facilitate the appropriateassignment of participants: and

Operational Requirements which define policiesand procedures designed to ensure the successfulattainment of the activity's objectives.

These activity standards, adjusted to reflect the individualizedcontribution of the activity to the overall program performancegoals, provide focused, relevant guidance to the serviceprovider about what they are expected to accomplish and howthey are expected to do it.

MOTIVATING SERVICE PROVIDER PERFORMANCE

Motivating performance is primarily a function of compensat-ing performance in accordance with agreed upon expecta-tions. In performance-based contracting, the compensationStructure is defined by two dimensions: the total fixed unitpayment for full performance; the composition of interim per-formance/payment benchmarks.

Executive Summary

The total fixed unit payment for full performance needs to beestablished and adjusted across several activities and serviceproviders to account for differences in the following factors:

>> Characteristics of Target Groups to be ServedTo the extent that an activity/provider focuses ongroups which are acknowledged to be moredifficult to achieve positive outcomes for, theperformance expectations for the activity shouldbe lower than for activities/providers which donot.

>> Employment Barriers to be AddressedTo the extent that an activity is designed toaddress multiple employment barriers, the fixedunit payment should be higher than for activitiesaddressing a more limited or intensive range ofbarriers.

>> Scope, intensity and Duration of Servicesto be ProvidedIn general, components/providers which havecoupled activities, have support services and/orare of longer duration should have a higher fixedunit payment.

>> Quality of the Jobs Targeted by the Trainingand Placement EffortOther design factors being relatively equal, train-ing in higher quality jobs will tend to be of longerduration and/or intensity and should reflect ahigher fixed unit cost.

These factors define differences in the level of investmentrequired, or the leiel of risk associated with achieving a positiveoutcome and, consequently, should correlate with differencesin the fixed unit payments for different activities.

In addition to these differences in activity design, adjustmentsto the fixed unit paymmt can be made to reflect qualitativedifferences in the enrollment and program outcome for in-dividual participants. For examp!c, if the full performance fixedunit payment for a classroom skills training activity is $4,000,

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Executive Summary

based on the factors described above, this payment can beadjusted upward or downward to reflect differences in the levelor intensity of employment barriers characterizing indMdualparticipants who are actually served. That is, a placed par-ticipant who entered the activity with one or a few barrierswould be valued and compensated at a level less than $4,000while a participant with multiple or intensive barriers would bevalued at more than $4,000. This same approach can beemployed to provide compensation adjustments to reflectqualitative differences in the characteristics of jobs in whichparticipants are actually placed.

The structure of performance/payment benchmarks alsoneeds to reflect differences in the objectives, duration, andinput-output specifications of activities. As before, the factorsto be considered are characteristics of participants, durationof services, and quality of job placements. In sum, the structureof payment benchmarks should mirror the relative importanceof the objectives to be accomplished by the program andindividual activities.

Finally, the compensation structure should include adjust-ments in the fixed unit payment to reflect differences in the levelof certainty associated with attaining planned outcomes. Inorder to overcome the behavioral principle of "pursuing thepath of least resistance," SDAs which are interested in investingin and developing "new and improved' activities and providersneed to be willing to provide financial incentives, throughhigher fixed unit payments, for assuming the risks associatedwith pursuing the "new and improved."

ACHIEVING QUALITY RESULTS

Quality performance begins with wanting and expecting it.Local managers and decision makers must be willing to raisetheir sights and expand the scope of performance expecta-tions which they establish. The performance standards in-dicators define a minimum set of performance expectations,not a sufficient set. The performance-based contracting ap-proach is designed to provide flexibility to service providers indetermining the methods used to obtain results; it is notdesigned to iimit the prerogatives or the responsibility of the

vii

Executive Summary

SDA to define expected results in input, output or processterms. Nevertheless, expectations without appropriate com-pensations, and a reasonable opportunity for attaining thecompensations, will not bto sufficiently motivating.

The purpose of the Job Training Partnership Act clearlysuggests the intent to produce program outcomes that repre-sent ever Increasing Improvements in the pre-programemployment, employability and income conditions of thepeople being served. This can only be accomplished bymaking investments in expanding the performance potentialand capability of the local job training system.

i

PURPOSE OF THE GUIDE

The enactment of the Job Training Partnership Act (JTPA)has wrought some sigrificant changes in the operation of thefederal-state-local job training system. Beyond the redefinitionof authority and responsibility relationships at each level in thesystem, the primary thrust of JTPA has been to establish ahigher degree of performance accountability in the operationof job training programs. This performance accountabilitythrust is reflected in several provisions of the Act:

a bottom-line "return on investment" approach forevaluating the relative effectiveness of job trainingprograms;

directions to the Secretary of Labor to develop asystem of performance standards for assessingprogram accomplishments;

cost limitations that prescribe minimum expendituresfor training and for youth activities; and

an overall emphasis on job placement, earningsenhancement and, in the case of youth, developmentof workplace skills and behaviors.

Finally, the Act grants significant authority to Private IndustryCouncils (Ms) to engage in policy development and oversightto ensure tl lat these mandates are fulfilled within the context oflocally defined needs, priorities, and goals.

This guide is being written six years into the implementationof JTPA: PICs have been organized; the performance stand-ards system is in place; and programs are operating andproducing results. The results are mixed. In general, ServiceDelivery Areas have done well in meeting and exceeding theirquantitative performance standards. JTPA implementationhas also been accompanied by increasing use of perfor-

ix

Purpose of the Guide

mance-based, fixed unit price contracting as a primarymanagement tool for achieving local performance standards,establishing performance accountability at the service providerlevel, and complying with limitations on administrative expen-ditures.

Yet, there are emerging concerns regarding the quality ofJTPA program operations as measured by such factors as thegroups being served, the duration and intensity of trainingactivities, and longer-term job r Itention and earnings. Havingdemonstrated its capability to attain and exceed acceptablelevels of performance, the job training system is now faced withthe challenge of demonstrating its capability to producequalitatively meaningful results. This challenge is conciselycaptured in the following statement:

"In an era of performance-driven systems management withquantitatively derived rewards and sanctions, how can anappropriate focus on qualitative program performance dimen-sions ba established?"

The challenge is more easily stated than solved.

Local job training programs confront the difficult manage-ment task of establishing high expectations and accountabilityfor results achieved - both quantitative and qualitative - whilesimultaneously providing flexibility at the operational level toencourage quality of process as well as quality of outcome. Inthe "management excellence" literature, this approach is called"tight-loose" management where results are clearly definedand controlled, and significant flexibility is allowed on methodsused. But the management task is more complex in jobtraining programs. There is a strong, interactive dynamicamong the participants served (i.e., inputs), the types of jobsin which placements are made (Le, outcomes), and tne struc-ture and design of training activities and services (i.e.,process). Failure to adequately manage each of these dimen-sions - inputs, outcomes, process will produce unsatisfactoryresults.

The purpose of this guide is to provide constructive assis-tance in how to use the two primary management tools - the

Purpose of the Guide

performance standards, performance-based, fixed unit pricecontracts to achieve satisfactory, ever-improving results. TNguide is targeted to two major audiences:

Members of Private Industry Councils who, throughtheir policy guidance and oversight roles, areultimately accountable for the responsiveness of thejob training program to local needs.

The SDA Executive Director who is accountable tothe PIC and, in practical terms, to the Stateadministrative authority for the operation of the localprogram and the attainment of the performancestandards.

It is not the purpose of this guide to debate the merits ofperformance standards. JTPA establishes the mandate forperformance accountability. Performance standards andperformance-based contracting are simply two managementtools for fulfilling this mandate.

ORGANIZATION OF THE GUIDE

Achieving good results begins with a strong, well-definedsense of purpose and direction. Therefore, we begin thisguide by revisiting the original purpose of JTPA as stated in theAct, and by introducing the investment portfolio managementconcept as an appropriate approach for the long-termmanagement of JTPA and other human resource developmentfunds. In Chapter 2, we discuss the importance of an effectivemanagement process (i.e., one that establishes stronglinkages among planning/decision-making activities, im-plementation/contracting activities, and monitoring/mo-tivational activities) on achieving good results, both short- andlong-term. Chapter 3 focuses on the elements of the localplanning process, the relationship of planning decisions to theperformance standards and local goals, and the linkage be-tween planning decisions and contract specifications. Thisfocus is presented in the guide because good contracts andgood performance begin with good plans.

Chapter 4 describes a process, with examples, for definingperformance expectations for individual activities and programcomponents. The emphasis of Chapter 4 is defining qualitativeas well as quantitative performance expectations for individualactivities because it is at the level of individual activity orcomponent design that the local program becomes fully orpartially responsive to the needs that exist in the local area.Chapter 5 discusses some of the considerations that areinvolved in establishing a monitoring system and structure ofrewards/ sanctions that will guide and motivate performancein a direction which is responsive to the needs of the eligiblepopulation, to the needs and requirements of local employers,and to other locally relevant goals of the Private IndustryCouncil and chief elected officials. Chapter 6 summarizes thesignificant principles which have been discussed in the preced-ing chapters and provides some suggestions for immediateaction.

IL

CHAPTER 1: Fulfilling the Mission

Since the implementation of the JobTraining Partnership Act (JTPA) andthe advent of a performance manage-ment system driven by a set of perfor-mance standards indicators, ServiceDelivery Areas on the whole have donean admirable job of demonstrating theirability to achieve higher and higherlevels of performance, at least asmeasured in quantitative, numericalterms. Yet, this achievement, whichwas encouraged by the structure ofrewards and sanctions in the perfor-mance standards system, is comingunder an increasing amount of scrutinyand criticism because of the inherenttrade-offs between quantity and quality,particularly when increasing levels ofperformance are being accompaniedby rapidly declining per unit costs.

A. The Challenge

Much of the current debate regardingthe policy structure of JTPA reallyreflects a concern as to whether theoriginal stated purpose of the Act isbeing achieved. As envisioned and ar-ticulated by the Congress, the job train-ing programs and activities authorizedby JTPA are an investment in humancapital, and the success of theprograms and activities should beevaluated according to a return-on-in-

1

vestment principle; specifically, "in-creased employment and earnings ofparticipants and reductions in welfaredependency."

Until the recent additions andrevisions to the performance standards(i.e., incorporating 13-week follow-upindicators), performance has beenjudged according to very immediate,short-term measures of program suc-cess and impact. Not surprisingly,programs have tended to be designedand managed to maximize perfor-mance on these short-term measures.

The program quality consequences ofthis pattern of implementation andmanagement are becoming morevisible in a series of evaluation andpolicy-related questions boing posedby a variety of constituent and interestgroups:

Are the programs adequatelyreaching out and serving the"harder-to-serve" populations,as defined by the extent ofemployment barriers, not justdemographic characteristics?

Have the performance stand-ards led t: an over-concern forcontrolling costs, leading tounder-investments in quality, in-

Chapter 1: Fulfilling the Mission

tensive training and resulting, inmany cases, in the underex-penditure of available funds?

Is the use of performance-basedcontracting leading to over-con-trol of quantitative variables,under-concern for qualitativedimensions, and to the sys-tematic elimination of qualityservice providers?

These are legitimate, pertinent con-cerns regarding the current operationof the State and local job training sys-tem funded by JTPA.

This issue is akin to the recent con-troversies regarding the influence of in-vestors and Wall Street over the U.S.economy. Investors argue that thethreat of corporate take-overs brings ahigher level of management account-ability and performance. This sameargument applies to the performancestandards. The performance stand-ards brought a necessary, higher levelof accountability to the management ofjob training programs; and, quantita-tively at least, performance has steadilyimproved. Yet short-term performancepressures can produce negativeconsequences for longer-term results:(1) disposing vs. acquiring assets inorder to increase cashflow; (2) limitedor no investment in new equipment andtechnologies in order to control expen-ses and increase short-term profits;and (3) subcontracting operations tolimit investments and risk, and forego-

2

ing opportunities for longer-termcapacity development within the firm.

What are the analogous patterns inthe job training system? Trends whichare very observable include: (1) shortertraining programs and declining perunit costs; (2) more, not less, contract-ing and subcontracting; (3) competitiveprocurement processes which focuson quantitative performance and costmeasures and have an increasingly dif-ficult time attracting proposals for in-novative programs; and (4) increasing,not decreasing difficulty in attractingparticipants to the program. These arenot the characteristics of an investmentstrategy. To borrow a businessphrase, they reflect a "harvesting" ap-proach which is generally employedwhen a business is considered to be inthe later stages of its life cycle.

The problem is not the performancestandards. Performance standardsare necessary for the functioning of anycredible business operation. The issueis one of management philosophy andapproach: (1) viewing the purpose ofthe program as being a longer-termsolution; (2) relating shorter-termachievements to longer-term pur-poses; (3) suboptimizing short-termperformance and rewards in order tomaximize longer-term results; (4)making continuous investments to in-crease productivity and performance;and (5) focusing more on increasing'revenues' than on controlling "costs."

B. An InvestmentPortfolio Approach ForImproving Results

The real job of SDA managers anddecision makers, including the PrivateIndustry Council, is to manage an in-vestment portfolio that is financiallysupported by JTPA and other grantfunds, and to achieve an acceptablerate-of-return from the portfolio for thepublic "stockholders." These stock-holders include a wide diversity ofspecific interests, but their general,common interest is captured in theoverall purpose stated in JTPA: toachieve economic self-sufficiencyfor participants and reduce welfarepayments. Thus, the challenge for theJTPA portfolio manager is the same asfor the financial portfolio manager: overtime, maximize the rate-of-return on theinvestment base.

Achieving a rate-of-return on invest-ment requires balancing the potentialyields of various investment optionsagainst the risk levels associated witheach option. In general, riskier invest-ments have higher potential yieldswhich, of course, have lower prob-abilities of being attained. To achievethe proper balance between risk andyield in the overall investment portfolio,managers use a tool called the "invest-ment pyramid." The investmentpyramid concept is illustrated in Exhibit1.

3


The investment pyramid reflects thefollowing relationships and assump-tions:

There is an inverse relationshipbetween level of return/yield andthe certainty of achieving thereturn; high yields have highrisks/low probabilities, and vice-versa.

The portfolio manager will wanttc structure a mix of risk-returninvestments in the overallportfolio, but the level of invest-ment at any risk-return level willagain bear an inverse relation-ship to the associated risk level.That is, the largest percentageof capital in the portfolio shouldbe invested in lower yield-higherprobability options, and so on.

Why should the portfolio managerwant to invest any capital in higher riskoptions? The answer lies in the factthat the key to long-term financial suc-cess is not only to achieve an accept-able rate-of-return at any given point intime, but also to create the potential forexceeding the acceptable rate-of-return. This same principle applies tobusiness success. If the investmentportfolio is structured totally aroundlow- or no-risk investments, then therate-of-return will be the same asTreasury Bills (i.e., a zero risk invest-ment), and a portfolio manager is notneeded.


EXHIBIT 1The Investment Pyramid

HIGH

LEVEL OFPOTENTIAL

YIELD

LOW

LEVEL OFINVESTMENT

LOW

PROBABILITY OFPOTENTIAL YIELD

4

HIGH


Again, what is the analogous situationin the job training system? At a micro-level perspective, participants will notbe motivated to enter or complete theprogram if it is designed to provide thesame service strategies and outcomes(e.g., low-skilled, minimum-wage jobs)that are available through other institu-tions that have alienated the par-ticipant, and/or are obtainable throughthe participant's own efforts. At a moremacro-level perspective, policy makersmay choose to allocate funds to a ser-vice system (e.g., welfare) that has thepotential for achieving higher qualityoutcomes, or to a more established,stable system (e.g., vocational educa-tion) that can produce the same resultsand has more overall resources withwhich to work. In other words, the jobtraining system does not simply have toachieve acceptable performance levelsin the short-term. As a relatively smallplayer in a big bureaucratic resourcearena, it must make the investmentsnecessary to continually expand itsperformance capability, or face theprospect of a profound and continuingerosion of competitive position at thevery time when employers are grap-pling with labor shortages and thepublic is becoming concerned aboutencrustation of the underclass, orpoverty-level population.

How, then, does the investmentpyramid work as a planning anddecision-making tool? Let's assumethat we have total investment capital of$100,000. Treasury bills have a currentyield of 10%, but we have set a return-

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on-investment goal of 15%. If the rangeof yield-risk investment options is asfollows:

10% yield at 100% certainty (e.g.,Treasury Bills);

15% yield at 80% certainty;



what is the overall mix of investmentoptions that will provide an expectedreturn-on-investment of 15%?

The first thing that is obvious is that the15% desired overall return ( = $15,000)cannot be obtained by allocating allfunds to the higher probability returns,a 15% yield with 80% certaintyproduces an expected yield of ap-proximately 12% (.15 x .80). Therefore,some allocation of funds to the higherrisk investments is necessary to attainthe desired expected return of 15%.One allocation plan that would achievethis objective is:

$30,000 at 10% (100% probability) = $ 3,000

$30,000 at 15% (80% probability) = $ 3,600

$30,000 at 50% (40% probability) $ 6,000

$10,000 at 100% (25% probability) = $ 2,500

This plan would produce a total ex-pected yield of $15,100, or the desiredreturn-on-investment. Interestingly,this rate-of-return cannot be achievedwith a lesser allocation to the higher riskinvestment options; and of course, the


potential rate-of-return is much higherthan 15%. However, the bottom-linebenefit is that the investor has in-creased his/her investment options inthe future because (s)he has $5,000more investment capital than the moreconservative investor. As this exerciseis played-out over several investmentcycles, the more aggressive investorgains more wealth and more influence.

Let's return again to the relevance ofthis tool to job training programmanagement. First of all, what is theoverall, long-term goal? As a measureof return-on-investmeni, we can usethe ratio: total reduction in welfare pay-ments divided by total expenditure ofgrant funds. If you prefer to not focusexclusively on the welfare population,you can use the ratio: total increase inparticipant earnings divided by totalexpenditure of grant funds. The long-term goal is to continually increase thevalue of this ratio.

Exhibit 2 illustrates an investmentpyramid of options that confront jobtraining decision makers in every plan-ning and competitive procurementcycle. In Exhibit 2, the current programdesign produces a ratio value of 1.0 --for each dollar of grant funds ex-pended, welfare payments are reducedby one dollar; this can be consideredthe "break-even" point. But businessand program success is defined bymoving beyond the "break-even" point.

Raising the ratio value above 1.0means that program managers and

6

decision makers must be willing to in-vest in "new and improved" activitiesand service providers, even if there is ahigher level of uncertainty or risk as-sociated with the results that will actual-ly be produced. For example,increasing service to welfare recipientsthrough higher planned enrollments ina new or refined activity obviously in-creases the potential for achieving ahigher return-on-investment than 1.0;however, there are some performance-related risks in increasing service towelfare recipients who will, in general,require higher per participant expendi-tures because of their more extensiveemployability barriers, and who may bemore prone to dropout of the program.Similarly, the development and im-plementation of customized trainingprograms in new occupations in-creases the potential for placementsand higher wages, but there will beuncertainties associated with any newendeavor.

What, then, are the advantages to thelocal program managers and decisionmakers of taking on these additionalrisks?

First, the performance potentialof the program is increased.

Second, the practical pool ofparticipants is increased as theattractive capability of the pro-gram `o address a broad rangeof needs is expanded.


EXHIBIT 2Investment Pyramid - JTPA ProgramYear 19xx

REDUCTION IN WELFARE PAYMENTS/EXPENDITURE OF FUNDS

RATIOVALUE

5.0

3.5

2.0

1.0

PilotPrograms,Activities

Refined Activity Designs;New Service Providers

Refined Activity Designs;Increased Responsibilities forExisting Service Providers

Established Activity Designs;Existing Service Providers

0 100%PROBABILITY OF

ATTAINING RATIO VALUE

7


Third, by improving its perfor-mance capabilities quantitativelyand qualitatively, the programbroadens its customer base to awider range of employers andfunding sources, as well as par-ticipants.

Fourth, by establishing a morecreative and competitive tone inits planning and procurement,the program can attract andretain a higher quality, moreresponsive group of serviceproviders.

Finally, and significantly, the programwill be able to retain a committed,motivated group of staff and PIC mem-bers who feel good about what they aredoing.

Moreover, the innovation processnever stops and the potential "return-on-investment" can be continually in--creased. Over time, activity designsand/or service providers which areseen as risky investmants in thepresent can become more establishedand less risky parts of the overall pro-gram design as design and operationaldeficiencies are identified and cor-rected. Yet, these activities and/or ser-vice providers retain the same potentialfor generating a higher return-on-in-vestment, as we have defined it. Thedifference is that the certainty of achiev-ing that potential return has increased.As the local program increases its level

8

of investment in these activities, theexpected return-on-investment for theoverall program will rise. This trend isillustrated in the revised JTPA invest-ment pyramid presented in Exhibit 3.

C. ImplementationRequirements

The incorporation of post-programmeasures into the performance stand-ards system will certainly provide animpetus for increased attention to thequalitative dimensions of programdesign and operations. Yet, expandingthe performance potential of the localjob training system will require an or-ganized and integrated approach toprogram management. The remainderof this guide provides some specificsuggestions for structuring localpolicies and procedures regardingplanning, contracting, and monitoringthat will, over time, increase the poten-tial and actual performance of the localprogram. These suggestions arebased on the simple notion that people,including service providers, will per-form according to what is expected,inspected, and compensated. Ex-pectations without inspections aremeaningless; inspections without ex-pectations are not fair and becomeconfrontational; expectations and in-spections without compensations arenot motivating.


EXHIBIT 3investment Pyramid - JTPA Program19xx + 2

REDUCTION IN WELFARE PAYMENTS/EXPENDITURE OF FUNDS

RATIOVALUE

7.0

5.0

3.5

2.0

PilotPrograms,Activities(19xx + 2)

Pilot Activities &Programs (from 19xx)

Refined Activity Designs withNew Service Providers(from 19xx)

Refined Activity Designs withExisting Service Providers'from 19xx)

0 100%PROBABILITY OF

ATTAIMNG RATIO VALUE

9


In conclusion, the long-term successof the job training system will be deter-mined by its ability to respond effective-ly to changing, increasingly complexsets of needs. Established, staidbureaucratic service structures are notthe answer, and frankly are not themandate of JTPA. Just as the success-

10

ful investor makes periodic, but prudentadjustments to his/her investmentportfolio in response to changingmarket conditions and/or emerging op-portunities, the successful job triingprogram will make regular refinementsand revisions to its program designportfolio.

CHAPTER 2: PerformanceManagement Of Job Training Programs

The performance-driven nature ofJTPA implementation (i.e., the use ofperformance standards to define "ac-ceptable" performance, and the ap-plication of incentives and sanctionsbased on attainment/nonattainment ofthe performance standards) has ledsome SDA managers and PICs, notunnaturally, to place heavy emphasison "managing against the numbers."At the samP time some serviceproviders, particularly those operatingunder performance-based contracts,have focused the design and operationof their programs on the compensableaspects of performance which havetended to be reflective of and tied to thequantitative performance standards in-dicators. Yet, the dimensions of a jobtraining program's success are morecomplex than twelve performancestandards indicators.

Achieving the performance potentialof the local job training system - thegoal of program managers and policymakers - requires that program plansand operations allow qualitative pro-gram objectives to be established,promoted, and achievc_4d while quan-titative performance standards arebeing attained. This balanced ap-proach to planning and decision-

11

making is based on the fact that perfor-mance standards, while important, areonly one essential input to a continuumof performance management con-siderations, decisions and actions.

A complete continuum of perfor-mance management decisions and ac-tions consists of four major phases:

Establishing performance ex-pectations and the overall pro-gram design through the plan-ning process.

Defining performance targetsand operating standardsthrough the contractingprocess.

Ensuring effective performancethrough the monitoring process.

Achieving desired resultsthrough corrective actions,rewards or sanctions.

Each of these phases is, in turn, sup-ported by the development and use ofspecific products or documents whichbecome the primary tools for im-plementing a performance manage-ment system that can guide and control

Chapter 2: Performance Management of Programs

the accomplishments of the local jobtraining program.

A. EstablishingPerformance Expectations

Complete, clear and relevant perfor-mance expectations are a necessary,but not sufficient, condition for achiev-ing positive program results. Thequantitative and qualitative perfor-mance expectations which are estab-lished by the SDA will be reflected inthree planning-related docu-ments/products:

THE LOCAL JOB TRAINING PLANThe local job training plan is and

should be much more than a com-pliance document submitted to obtainfunds. The plan represents thedecisions which have been maderegarding local needs and prioritiesand the actions which will be taken toaddress those needs. The plan is apublic statement by the SDA's manage-ment and the PIC regarding:

* "here's what we see as the needs;"

* "here's what we plan to do aboutit."

Thus, the job training plan defines thepath for future action and reflects boththe analysis of local needs and a state-ment of local objectives and values forthe program.

12

ACTIVITY/COMPONENTWORK STATEMENTS

Work statements translate the designor plan for the overall program intoplans for individual activities (e.g.,classroom skills training) or programcomponents (e.g., remedial educationand job search skills). The major ad-vantage of work statements is that theydefine performance expectations andaction plans at the organizational levelat which program operations will bebudgeted and operated. Performanceobjectives for the overall program areuseful, but unless objectives and ex-pectations are established at the in-dividual activity/component level, theinformation will be insufficient to guideprogram operations. The work state-ment is an effective management toolfor providing an adequate level ofguidance.

THE BUDGETThe plan must be developed within the

context of available resources - all avail-able resources. At the overall programlevel, the budget must conform to thelegislative limits on allocation and useof funds (e.g., 70%-15%-15%, mini-mum expenditures for youth). The realtask is developing budget estimates forthe individual activities and programcomponents. A cost range should beestablished for each activity/com-ponent as part of the planning process.The cost ranges should reflect differen-ces in the duration, intensity, and re-quired investments (e.g., equipment) ofindividual activities. The sum of these"price tags" should, of course, ap-


proximate the total available funds lessadministrative costs and any plannedreserves or carry-over.

B. Defining PerformanceTargets And OperatingStandards

The planning documents define thedesired types and levels of accomplish-ment. Actual expected accomplish-ments are negotiated between the SDAand the available, qualified serviceproviders; directing, facilitating, andconcluding the negotiations in aproductive manner is the function of thecontracting process. There are twoprimary contract-related documents:

REQUEST FORPROPOSALS/QUOTATIONS

When program activities are to beprovided by a contractor, the activitiesand related services must be solicitedthrough a competitive process using aRequest-for-Proposal (RFP) or Re-quest-for-Quotation (RFQ). TheRFP/RFQ must provide sufficient infor-mation so that potential bidders canunderstand what activities/servicesand capabilities the SDA is seeking. If

the performance expectations definedin the planning process are to bereflected in program operations, theseexpectations must be fully and clearlycommunicated in the RFP/RFQ.Vague RFPs produce vague proposalswhich, in turn, usually produce vaguecontracts. The solicitation should com-municate the full range of applicable

13

expectations, particularly those relatedto qualitative factors (e.g., targetgroups, barriers to be addressed, com-petencies/skills to be developed, place-ment wage).

Furthermore, the RFP/RFQ shouldidentify and define the criteria which willbe used to evaluate receivedproposals; these criteria should reflectthe relative importance of specific per-formance expectations.

THE CONTRACTThe contract is the negotiated conver-

sion of the successful bidder'sproposal into an enforceable agree-ment, which is binding on both partiesand which incorporates the generaland special assurances required fordoing business with the SDA. Qualita-tive and quantitative performance ob-jectives should be spelled out clearly inthe contract, along with paymentbenchmarks and standards that aretied to the objectives.

C. Ensuring EffectivePerformance

The contract formalizes the perfor-mance expectations. Yet, experiencehas clearly demonstrated that serviceproviders will focus on what is in-spected, not necessarily on what is ex-pected. Therefore, an effectiveperformance management systemmust have an inspection process thatverifies progress in attaining the estab-lished performance objectives; in job


training programs this inspectionprocess is called monitoring. Themajor monitoring- related products thatcontribute to effective performancemanagement are:

MONITORING REPORTS

Monitoring reports document theresults of on-site and off-site reviews ofcontract activity. The reviews will focuson issues of compliance, achieving fis-cal and participant service objectives,and operational effectiveness.Monitoring reports will present findingsand recommendations regardingstrengths, weaknesses, and improve-ment actions.

CORRECTIVE ACTION PLAN(S)To the extent that monitoring reports

identify performance problems ordeficiencies, corrective action steps toimprove the performance situation willneed to be identified. These steps canbe of several types:

* required actions to be taken by thecontractor, usually in response tosome compliance-related findings;

* recommended actions to be takenby the contractor, usually inresponse to an identified weak-ness but one that is not endanger-ing the fulfillment of contractresponsibilities; and

* technical assistance to beprovided or arranged by the SDA.

Corrective action plan(s) should es-tablish the shared, joint responsibility of

14

both the contractor and the SDA toimprove performance.

D. Achieving DesiredResults

The monitoring process can helpoperations stay on track in relation toperformance expectations, but achiev-ing desired results over the long-termrequires that service provider behaviorbe managed; the key to managing be-havior is the structure of compensa-tion. In effect, when service providersmeet or exceed performance expecta-tions, they should receive rewards;when they fail to achieve performanceexpectations, a progressive series ofsanctions should be applied. Anyperformance management processthat is not tied to a structure of rewardsand sanctions will not be fully effective.

The relationship of these ninemanagement tools to the four phasesin the performance management con-tinuum is summarized in Exhibit 4. Thesignificance of the performancemanagement continuum is that theability of the local job training system toachieve the results it wants quantita-tively and qualitatively - is directly re-lated to what it expects, Inspects, andcompensates. The process beginswith a zlear plan and culminates witheffective monitoring and appropriaterewards/sanctions. Some considera-tions and suggestions for completingthe steps in this process are presentedin Chapters 3-5.

,


EXHIBIT 4THE PERFORMANCE MANAGEMENT CONTINUUM

PHASE 1: EstablishExpectations

PHASE 2: Set PerformanceTargets andOperating Standards

PHASE 3: Ensure EffectivePerformance

PHASE 4: Achieve DesiredResults

15

Plan

lork Statements

ludget

Solicitation

tntract

Monitoring Reports

trrective Action Plans

Rewards/Incentives

Sanctions

33

CHAPTER 3: Setting PerformanceExpectations

Planning is the driving force for whatcan be accomplished through the localjob training program, but planning anddecision-making in the job training en-vironment is complicated by severalfactors:

There is no single "bottom-line"to be achieved;

There are multiple, often com-peting needs calling for respon-ses;

There are real constraints on thenumber of decision options asrepresented by resources,political considerations, and ap-plicable performance stand-ards; and

Decision-making is a public,group process reflecting diverseinterests in which the "optimum"decision - if it can be defined - isnot always achievable.

Nevertheless, the performance poten-tial of the local job training system canbe realized if a proactive approach toplanning and decision-making is fol-lowed.

17

A. Developing TheProgram Design

Every local job training program mustmake planning decisions on the follow-ing program design dimensicns:

* who will be targeted for service?

* what types of outcomes will beachieved?

* what occupation and employmentsectors will be targeted for trainingand placement?

* what will be the mix of activities andservices to be offered?

In each of these decision areas, thelocal program has substantial flexibilityand latitude. The only real externalconstraints are imposed by the legisla-tion (i.e., eligibility, allowable activitiesand outcomes) and by local social,demographic, and economic condi-tions. The availability of serviceproviders and local political attitudesmay be perceived as additional con-straints, but in reality these factors aresubject to change and to the decisionsof the local policy makers and program

4

Chapter 3: Setting Performance Expectations

managers (recall the discussion inChapter 1).

Within each decision area, there is arange of available options. Tha overrid-ing decision-making consideration isthat the decisions in each area shouldrepresent a consistent, mutuallyachievable, responsive program direc-tion.

WHO WILL BE TARGETEDFOR SERVICES?

This is the most important planningdecision to be made because it defineshow the PIC and the programmanagers interpret the needs of the)cal area. Because of its importance,

.his question is also the most con-troversial and difficult one to be con-fronted by local decision makers. Theanswer to this question has severaldimensions:

Targeting of specificdemographic characteristics(e.g., age, sex, race) and social-economic characteristics (e.g.,welfare recipient, educationallevel, offender) based on relativeincidence in the eligible popula-tion;

Targeting of specific groupsbased on generalized problemsregarding employability (e.g.,long-term unemployed, dis-placed homemakers, dislo-cated workers, Viet Nam-eraveterans);

18

Targeting based on incidenceand severity of barriers to gainfulemployment (e.g., limited skills,educational deficiencies, limitedor variable work history, high de-pendency support require-ments).

All of these dimensions are importantbecause this planning decision willdetermine not only who gets into theprogram, but also what employment-related barriers will need to be ad-dressed.

The factors which should be con-sidered in making this planningdecision include the following:

* the legislated eligibility require-ments;

* policy mandates regardingproportional incidence and mini-mum service levels to specificgroups in the eligible population;

* labor market and program infor-mation identifying the employmentbarriers and needs of specific tar-get groups;

* availability of resources to addressthe employability barriers forspecific groups;

* historical capability and willing-ness of available service providersto serve specific groups; and

* impact of interagency coordina-tion arrangements on target groupemphases for specific agencies

)


and programs (e.g., JTPA,Employment Service, VocationalEducation).

These factors help determine whatshould be the appropriate focus of thelocal job training program in terms ofgroups to be served and the role of thejob training program in addressing thefull range of barriers faced by the targetgroups.

This decision should receive a lot ofattention in the local planning process.First and foremost, the designation ofgroups to be served and employmentbarriers to be addressed will influencethe range of feasible options in theother decision areas. For example: (1)the entry requirements for some oc-cupations will simply be beyond therange of trainable skills for the majorityof members of certain target groups;(2) the activity and service mix will needto be structured to address the scopeand severity of the employment barriersof the designated target groups.Second, the JTPA performance stand-ards models uses participant charac-teristics as one major input incomputing the applicable performancestandards for the SDA. in brief, to theextent that the SDA enrolls and servescertain harder-to-serve target groups(e.g., minorities, welfare recipients,school drop outs) in proportionsgreater than the national average forthe group, the model recognizes theperformance implications of thisdecision by adjusting the standards foroutcomes (e.g., entered employment

19

rate) down, and the standards for costs(e.g., cost per entered employment)up.

As previously suggested, the decisionof who will be served must go beyondthe simple identification of groups andthe service percentages of each. Aswill be further discussed in Chapter 4,the identification of employment bar-riers and deficiency levels to be ad-dressed through the job trainingprogram is needed to establish ap-propriate criteria for program and ac-tivity enrollment, and appropriatespecifications for training competen-cies, materials, etc. The explicit iden-tification of barriers to be addressedis an important qualitative input tothe design of the local program.

WHAT TYPES OF OUTCOMESWILL BE ACHIEVED?

JTPA places a strong emphasis on jobplacement (for adults) and the attain-ment of work-related competencies (foryouth) as the priority outcomes of theprogram. However, the langUage ofthe Act also defines some qualitativeconsiderations regarding program out-comes, e.g.:

* retention in unsubsidized employ-ment;

* increase in earnings, includinghourly wages;

* reduction in the number of welfarerecipients and in the amounts ofcash welfare payments;


* attainment of PIC-recognizedcompetencies (for youth) regard-ing basic education and workforcereadiness skills; and

* school completions or attainmentof school completion equivalents(for youth).

Thus, this decision area also providessome opportunities for insertingqualitative dimensions into the designof the program.

Quality program outcomes can besimply defined as ones which representa significant improvement in the pre-program status of the participant.Some of the considerations are:

For job placement outcomes,local decision makers mustdetermine if placement in anytraining-related job is accept-able, or if an acceptable jobplacement is defined by otherqualitative characteristics suchas: a specified minimum wagelevel, availability of fringebenefits, a specified minimumperiod of job retention, the exist-ence of a career ladder for post-placement upward mobility, orother factors that can contributeto job retention and increasedearnings in the future.

For non-job placement out-comes, local decision makersmust determine what they willbe. How will competency attain-ment and/or school completion

20

for the purpose of program ter-mination be defined: which com-petencies? how many com-petencies?

Defining the types of acceptablepositive program outcomes is a veryimportant policy decision. The out-comes must be relevant to the needs oftarget populations (i.e., regarthng jobstability and mobility, vi compensation)and to the needs and requirements ofthe area's employers (i.e., regardingskills and workplace competencies). Indefining outcomes for the program, thePIC and program managers need tolook at interim outcomes (e.g., basicliteracy skills) as well as final outcomes(e.g., job placement and retention).

WHAT OCCUPATIONS ANDEMPLOYMENT SECTORS WILL BE

TARGETED FOR TRAINING ANDPLACEMENT?

This is the decision area in which thePrivate Industry Council is expected tomake the greatest contributions in im-proving the quantitative and qualitativeperformance of the job training pro-gram. The decision-making approachcan be a passive one in which anyoccupation or employment sector withjob openings is acceptable; or the ap-proach can be more proactive in whichoccupations and employment sectors(e.g., industry or employer size group-ings) with desirable characteristics aretargeted for attention, activity, anddevelopment.


As in the selection of target popula-tions for service, there are several fac-tors to be considered in making thisdecision:

* labor market information identify-ing occupations and industry sec-tors with job openings andexpanding growth in demand forworkers;

* the needs of area employers forspecific skills, and the expecta-tions of these employers regardinghiring requirements, workplacebehaviors, etc.; and

* other information indicating wagelevels, general training require-ments, working conditions, etc.

The most important decision-makingcriterion is the ability of the targetpopulations to access both immediatejob openings and longer-term upwardmobility opportunities. At the sametime, targeted occupations andemployment sectors must be respon-sive to the needs of employers forqualified workers if the JTPA programis to achieve credibility as a qualityreferral source for workers.

WHAT WILL BE THE MIX OFACTIVITIES AND SERVICES TO BE

OFFERED?Translating priorities regarding target

populations, outcomes, and employ-ment sectors into an effective andfeasible service mix is the most difficultchallenge facing local decision makers,

21

There are several considerations thatcome into play:

* What are the significant employ-ment-related barriers faced by thetarget populations? Of these,which are most critical in respond-ing to employer requirements andexpectations?

* What are the capabilities andcapacities of the local delivery sys-tem - existing and potential - toprovide specific services? Whatare the logistical constraints inproviding specific services ormixes of services?

* What is the availability of funds -JTPA and other - to provide ser-vices? What constraints do thefunding levels and mechanismsimpose on the services and mixesof services that can be provided?

These considerations suggest somesignificant trade-offs in making the finalprogram design decision.

In developing the activity and servicemix for the job training program, localdecision makers must determine thesignificant employment barriers andlonger-term skills development objec-tives (e.g., the ability of an individual toeffectively manage their personal finan-ces) on which to focus; and shoulddetermine how much flexibility to incor-porate into the program design to allowresponses to individual participant bar-riers or needs. Once again, thisdecision entails more than identifying


specific activities and services to beprovided, and determining the relativeallocation of funds among the ac-tivities/services. Identifying specificbarriers and skills development ob-jectives to be addressed, and deter-mining the required responsiveness toindividual participant needs (i.e.,through support services or thedevelopment of basic skills) is part ofthe process of defining qualitativestandards for the design and the im-plementation of individual programactivities.

The decisions made in these fourareas - target groups, outcomes, tar-geted occupations, service mix - willestablish a strong direction for the localprogram. The decisions regarding par-ticipant characteristics and the servicemix (i.e., as a determinant of averageduration of participation) will each havea direct impact on th performancestandards for the SDA. More impor-tantly, these decisions represent a setof expectations that defines standardsof responsiveness to the needs of thelocal area.

B. Linking The ProgramDesign To PerformanceStandards AndOperational Constraints

Even the most proactive, aggressiveplanning process eventually confrontsthe real-life limitations imposed by inter-nal and external constraints. JTPA es-

22

tablishes a management system that isinfluenced by a set of quantitative per-formance indicators and mathematical-ly-derived standards. Although thesestandards are themselves strongly in-fluenced by local planning decisions,they are also impacted by economicfactors beyond the control of the localprogram and, thus, represent some de-gree of constraint on decision-makingoptions.

THE IMPACT OF THE JTPAPERFORMANCE STANDARDS

The JTPA performance standards arean important consideration in the localplanning process because:

Exceeding the SDA's perfor-mance standards means finan-cial rewards/incentives, andconsistently failing to attain thestandards means administrativeor financial sanctions.

The performance standards area common method for planningand controlling performance ofservice providers.

For better or worse, these facts willcontinue to influence local decision-making behavior.

However, as previously noted, SDAsin general have demonstrated theability to attain and exceed their stand-ards. As quantitative performancelevels continue to increase, the ques-tion arises as to whether qualitative fac-tors are being adequately considered


in local decision-making. The implica-tions are troubling: First, an excessivefocus on exceeding the national depar-ture point or the standards of otherSDAs will not produce programdesigns that reflect an adequate as-sessment of local needs. Second, asperformance levels continue to rise (orfall in the case of the cost indicators)reflecting actual program experiences,the performance standards model willproduce standards that may be evenmore limiting on the ability to invest inand develop qualitative, responsiveprogram designs.

The bottom-line point is that the SDA'sstandards are set to a large degree bythe local planning decisions which aremade and by the ability of the SDA toeffectively implement the program inaccordance with its plan,

THE IMPACT OF LOCALCONDITIONS

Local conditions represent anotherset of factors influencing the decisionoptions of local policy makers and pro-gram managers. Beyond the variablesthat are considered in the performancestandards models (e.g., unemploy-ment rate, population density, averagewage for area), some of the significantlocal factors are:

Sources of recruitment for theeligible population and targetedgroups. In brief, the ability toenroll and serie specific targetgroups is very much dependenton the capability to locate and

23

contact them, and to developtheir interest in participating inthe program.

Employment opportunitieswithin the local labor marketsincluded in the SDA, as definedby number, location and charac-teristics. The considerations intargeting employment oppor-tunities were previouslydescribed, but in many SDAs theopportunities are limited and thecompetition among job seekersis fierce. In other SDAs, targetgroups do not reside at a loca-tion which is geographicallyconvenient to emerging jobopportunities. In either event,the availability of accessibleemployment opportunities canbe a significant constraint.

Availability and capability ofservice providers is a major in-fluence on what can be done. Aprogram design can be desiredbut to produce results it must befeasible; feasibility is defined toa large extent by the availabilityand capabilities of serviceproviders.

Attitudes of decision makersregarding innovation and riskcan have a major impact on therange of decision options. Assuggested in Chapter 1, localdecision makers should besupportive of staff in takingsome innovative approaches to


program design and manage-ment. If this support does notexist, then the range of programdesign options will continue tobe focused on the status quo,and as noted in Chapter 1, thislimits the ability of the programto earn a higher return-on-investment.

Of course, a proactive response tothese factors can expand the range ofdecision options, even under difficultoperating conditions. An innovative,successful program design can in-crease the interest of potential par-ticipants; more extensive supportservices such as remedial education,transportation and relocation assis-tance can increase the scope of ac-cessible employment opportunities; awillingness to invest in new, somewhatrisky projects can expand thecapabilities of service providers, andprovide more effective, responsiveprograms for both participants andemployers.

RECONCILING THE PROGRAMDESIGN DECISION TRADE-OFFS

Developing a coherent programdesign entails trade-offs among thevarious decision areas and considera-tions. The challenge for local decisionmakers is presented in Exhibit 5, wherethe shaded area defines the range offeasible decision options.

The program design challenge is toproductively intertwine the oppor-tunities represented by responsivenessto the needs of participants andemployers with the practical limitationsimposed by availab',. r, sources, ac-ceptable performanL.0 levels, andcapabilities of service providers. Overtime, the feasible overlap betweenneeds and the capability to respond toneeds should continually increase orexpand.

Exhibit 5 illustrates the fact that theplanning effort must work on improve-ments in each of the four major dimen-sions in order to increase programdesign options. For example:

Relating participant capabilitiesto employer requirements re-quires, as previously described,an increasing level of under-standing of significant employ-ment-related barriers faced bytarget populations, and the mostsignificant expectations andhiring requirements ofemployers. Over time, theknowledge of the local programregarding both of these sets ofinformation should becomemore detailed and refined; onlyin this way can real barriers toemployment for participantgroups be distinguished fromperceived barrier.

24


d


Relating a desired activity/ser-vice mix to the capability of thelocal service delivery system re-quires one or more of a series ofactions: (1) increasing the num-ber of available service provide-rs; (2) enhancing the capabilitiesof existing service providersthrough staff training, focusedinvestments in new equipmentand facilities (e.g., computers astraining or management aids) orproviding opportunities for newpilot projects; and (3) develop-ing innovative project designsthat allow existing serviceproviders to utilize and expandtheir respective strengths.

Reducing the real and perceivedlimitations of applicable perfor-mance standards and cost con-straints requires the ability andwillingness to adjust perfor-mance standards and cost limitsto reflect more qualitative dimen-sions (e.g., scope and severityof employment barriers ad-dressed, intensity of servicesprovided) at both the overall pro-gram and individual contractorlevels; a willingness to foregohigher levels of incentives in theshort-term to develop a programthat has strong long-termdevelopment and performancepotential; and the willingness to

26

pursue additional sources offunding.

The objective of the planning effortshould not be to achieve the "optimum"program design at one point-in-time.As illustrated in Exhibit 5, this is notfeasible, will be frustrating for all partiesinvolved, and can lead to some poorinvestment decisions. Rather the ob-jective should be to ensure that eachprogram planning and implementationcycle produces improvements that ex-pand the range of feasible programdesign options.

C. Conclusions

The ability of an SDA to contract forqualitative as well and quantitative pro-gram results is strongly influenced bythe scope and strength of its planningprocess. As stated in the precedingchapters, any service provider - andthat includes the SDA in its relationshipwith the State - responds to those itemsthat are expected, inspected and com-pensated. If an SDA wants to improvethe qualitative dimensions of its pro-gram performance, it must incorporatethese dimensions into its planning,decision-making, and managementprocess. Chapter 4 will move beyondthis general perspective to presentsome practical approaches for settingperformance targets and developingoperating specifications for the overallprogram and individual activities.

CHAPTER 4: Defining PerformanceTargets and Operating Specifications

Quality results begin with quality ex-pectations. Chapter 3 discussed someof the considerations and approachesfor incorporating qualitative dimen-sions into the overall program designprocess. To have an operational im-pact, however, performance expecta-tions -quantitative and qualitative-should be refined down to the level atwhich services are provided: individualactivities and program components.The focus of this chapter is a discussionof activity level planning and the workstatement as a primary managementtool for communicating what is ex-pected in the implementation of in-dividual activities and programcomponents.

A. Overview Of TheActivity Planning Process

The first step in developing activity orcomponent plans is to determine howthe overall program design will be or-ganized into whole, independentoperating components; the optionsare:

Organized around major ac-tivities (e.g., basic skill remedia-

27

tion, classroom skills training,OJT, work experience);

Organized around a mix of ac-tivities and services that isdesigned to be provided as anintegrated unit to the same tar-get groups or to individual par-ticipants (e.g., exemplary youthprograms, combined remedialeducation-classroom skillstraining) with similar patterns ofemployment barriers.

The criterion for determining com-ponent organization should be: howdoes the SDA want to establish per-formance accountability for pro-gram implementation whether thecomponent is to be orerated internallyor through a contracted serviceprovider.

After this organizational frameworkhas been defined, activity planningproceeds through three levels ofdecision-making, as illustrated in Ex-hibit 6:

> In Level 1, basic quantitative per-formance expectations regardingoutcomes are established. Thesedecisions will be strongly in-

Chapter 4: Defining Performance Tartgets

fluenced by the performancestandards which will dictate, for theSDA, minimally acceptable perfor-mance levels for the applicablestandards indicators. For activityplanning, performance expecta-tions must be at least set for thestandards outcome indicators thatare relevant to each activity/com-ponent; i.e., the adult indicators forall adult-focused activities, theyouth indicators for youth-focusedactivities. At the activity level, per-formance expectations should beadjusted from the SDA levels toreflect two considerations:

Activity performance targetsshould reflect the characteristicsand barriers profile of the par-ticipants to be served in eachactivity. In general, if an activity(e.g., coupled remedial educa-tion-classroom skills training)focuses on more extensive andintensive employability barriersthan another activity (e.g., OJT),then the expected performanceon outcome measures (e.g.,entered employment rate)should be lower.

Activity performance targetsshould also incorporate a "bufferzone" above the SDA standardsto create a safety factor for theSDA if the activity performancetargets are not achieved. For ex-ample, if the SDA's performancestandard for the adult enteredemployment rate is 70%, then

28

the performance target for anyactivity should be at least 75%.

These two considerations can have aninteractive effect in establishing the per-formance target for a specific activitysuch as OJT. OJT, which is highlyplacement-oriented and tends to serveparticipants with fewer employabilitydeficiencies, should have an enteredemployment rate well above the SDAstandard, e.g., 85-90%.

> In Level 2, the qualitative programdesign decisions made during theplanning process are translatedinto qualitative performance stand-ards for each program com-ponent. That is,

specific employment barriers tobe addressed and competen-cies to be developed;

targeted occupations, employ-ment sectors, wage levels;

activity and service needs ofspecific target groups; and

special training and servicedelivery capabilities such asequipment, facilities, staffqualifications.

Again, at this level it is important torelate these qualitative standards to thespecific program components forwhich they are relevant. For example,special training capabilities such Psfacilities, etc., are not relevant to an 0JIcomponent.

1o1aa)c

--e

5a

Exhibit 6Setting Performance Expectations

Level 1

Level 2

Level 3

SDAParticipantCharacteristicsProfile

ripContractor

ParticipantCharacteristics

SDA Planned /Performance

/Standards /

SDAPmgramDesign

ContractorActivity

11 Design

/ContractorAdjustedPerformanceTargets

SDAQualitativePerformanceSpecifications

SDAMotivationSystem

-0Contractor

Implementation

ContractorQualitativePerformanceSpecifications

SDAResults

/Rewards

ContractorResults

/Rewards

E

4 i;


> In Level 3, the SDA goes beyondthe contracting process to estab-lish a system of performance-based rewards that motivateservice providers to improve per-formance, both quantitatively andqualitatively, beyond minimallyacceptable levels. The reward sys-tem should not be "open-ended,"in that there should be a limit on theamount of rewards that can beachieved; and the incentivesshould be structured so that abalanced relationship is main-tained between quantitative andqualitative dimensions of perfor-mance. For example, continuousreductions in "cost per" perfor-mance levels do not necessarilyreflect improving performance; a"cost per" floor should be estab-lished such that reductions belowthis level would not qualify for ad-ditional incentives. Similarly, in-creases in performance levels onoutcome measures, such as theentered employment rate, are notimprovements if they are accom-panied by reductions in the per-centage of participants who havesignificant and substantial employ-ment barriers. (The considerationsinvolved in structuring the systemof incentives are more fully dis-cussed in Chapter 5.)

Through this three-level decisionprocess, the SDA will develop "cus-tomized" expectations, standards, andmotivators for each program com-ponent, consistent with the planned

30

contribution of the component toachieving the overall goals and objec-tives defined in the SDA's job trainingplan. For management purposes theexpectations and standards should beformalized into component work state-ments.

B. DevelopingComponent WorkStatements

Work statements are a valuable plan-ning and management tool for "cus-tomizing" the design of individualprogram activities and components. Atypical work statement outline includesthe following information:

* a description of the participant ac-tivities and services to beprovided;

* an identification and description ofthe responsibilities of the com-ponent regarding functions suchas participant recruitment,eligibility certification, assessmentand selection, placement and sup-port services;

* a description of the target groupsto be served and the criteria (e.g.,barriers, minimum competencies)for acceptance and entry into thecomponent;

* an identification and description ofacceptable outcomes and thecriteria (e.g., competencies at-tained, job placement) for comple-


tion or positive termination fromthe component;

* a description of applicable quan-titative performance targets andstandards; and

* a description of applicable qualita-tive standards (e.g., minimum ser-vice levels to specific groups,minimum wage for acceptable jobplacement, competencies to beaddressed in training curriculum).

In addition, the work statement shoulddescribe all applicable administrativerequirements.

Because the process for developingwork statements provides some excel-lent insights into the linkage betweenprogram design decisions and resul-tant performance expectations, theremainder of this chapter will present a5-step process for evolving a workstatement, using information on ahypothetical Service Delivery Area, theOzarka SDA. For the purposes of thisillustration we will focus on the adultclassroom skills training activity. Thesame process can be applied to anyadult- or youth-focused activity.

> STEP 1: Define Input-OutputSpecifications

The first step in developing the workstatement is to define for the activity:Who will be targeted for service?What outcomes will be achieved?What occupations and employmentsectors will be targeted? From these

31

decisions, the scope and objectives ofthe activity should establish a linkagebetween the barriers of the targetedgroups and the requirements of thetargeted outcomes and occupations.For example, classroom skills trainingshould be focused on groups and in-dividuals with more extensive and sig-nificant employment barriers (e.g.,limited or no prior work history, limitedor deficient basic and job skills). At thesame time, given the additional invest-ments in remedial and skills training,higher wages at placement might beexpected.

In making these linkage decisions, theSDA begins the process.of saying thatall activities are not the same, and thateach activity is expected to make aunique contribution to achieving theoverall program results. The input-out-put specifications for Ozarka's class-room skills training activity arepresented in Exhibit 7.

> STEP 2: Establish PerformanceObjectives and Standards forthe Activity

The second step is to set quantitativeperformance targets for each activity orprogram component. As previouslydescribed, the applicable indicators willbe determined by the objectives of theactivity and the input-output specifica-tions defined in Step 1. 1r this step, thefact that each activity makes a uniquecontribution to achieving overall pro-gram results is translated intomeasurable, quantitative terms. Objec-


EXHIBIT 7Input - Output Specifications

SDA - Adult Program Classroom Skills Training

. Participant Characteristics2rOfile

- % Female = 55.0% Black = 31.0

- % Hispanic = 39.0- % Dropout = 29.0

% WelfareRecipient = 17.0

II. gmployment Barriers To BeAddressed

Assorted

III. Outcomes

Minimum Acceptable WageFor Placement =

- $4.25 with fringe benefits

- $4.50 without fringebenefits

32

I. participant Claracter-istics Profile

% Female . 67.0% Black = 40.0% Hispanic = 40.0% Dropout . 20.0

- % WelfareRecipient = 15.0

II. Emoiovment Barriers Topaa Addressed

- No job relevant skills- Limited work experience- Need for income aboveminimum wage level

III. Qutcomes

7-13

Minimum Acceptable WageFor Placement =

- $4.65 with fringe bene-fits including medical


tives should be established, at a mini-mum, for the following factors:

applicable outcome indicatorssuch as entered employmentrate, cost per entered employ-ment, average wage at place-ment, follow-up placement rate,etc.;

appropriate measures of par-ticipant service such as mini-mum and maximum enrollmentlevels, minimum and averageduration of participation; and

controls on participant flow suchas schedules for intake/en-rollment, training cycles, maxi-mum enrollment levels at givenpoints in time, etc.

By setting performance targets onthese factors, the SDA is establishingexpectations regarding not only out-comes but also the quality of theprocess for serving participants. Thatis, it , establishing controls to preventover enrollments in relation to capacity,unnecessary "holding" of participantsbetween program components, etc.

As previously described, the ap-propriate indicators, controls, and per-formance targets will vary by activity orprogram component. Where inter-component coordination arrange-ments are involved, controls onparticipant flow schedules becomevery important. For outcome in-dicators, the SDA should establish both

33

expected performance levels and mini-mally acceptable performance levels.

Performance targets and standardsfor Ozarka's classroom skills trainingactivity are presented in Exhibit 8.

EXHIBIT if

Performance Objectives: Classroom SkillsTraining

Indicator SDA Standard Pert Target Min.Parl.

EnteredEmploymentRate

WelfareEnteredEmpt. Rate

Cost PerEnteredEmploy.

AverageWage atPlacement

Follow-upPlacementRate

Follow-upWeeksWorked

65.0 75.0 70.0

50.0 65.0 60.0

$ 4,250 $ 4,700 $ 4,900

$ 4.50

62.0

8

$ 4.80 $ 4.55(withbenefits)

75.0 68.0

12 10

> STEP 3: Establish Paricipant As-signment Criteria

The third step, often overlooked in theacitivty design process, is to establishminimum and maximum criteria forentry into each activity. The criteria canrelate to such factors as:

* functional literacy levels;

Chapter 4: Defhiing Performance Tartgets

* physical abilities such as manualdexterity;

* prior work experience; and

* attainment of specific work-relatedcompetencies.

These criteria are not intended toscreen participants on the basis of tar-get group priorities; rather, they areintended to screen participants on thebasis of individual performance factorsthat are necessary for the participant toget the most out of a specific activity,given its design and objectives, theunderlying principle is that a participantcan be under-qualified or over-qualifiedfor an activity; in either case, theparticipant's time and the program'smoney are being wasted.

For the SDA, participant assignmentstandards help ensure that those "mostin need and who can benefit" from aparticular activity or set of activities are,in fact, those who are being served.For the service provider, participant as-signment standards help ensure thatappropriate referrals are being made tothe activity. When appropriate referralsare made, the ability to achieve positiveshort- and long-term results is in-creased. Examples of participant as-signment standards for the OzarkaSDKs classroom training activity arepresented in Exhibit 9.

34

Exhibit 9Participant Assignment Standards:Occupational Classroom Skills Waining

A Minimum Qualifications for Entry

* must have a functional readinglevel of 9th grade or above

* for data entry and shipping andreceiving clerks, must have a func-tional math skills level of 8th gradeor above

* for data entry clerk and machinist,must have two-handed manualdexterity required to perform tasksof these jobs

* for licensed practical nurse, musthave no prior record cf drug use

B. Maximum Qualifications for Entry

* must not have prior work ex-perience in occupation of training

* must not have a functional readingor math level exceeding 12 years

* must not have cumulative work ex-perience exceeding 4 years

> STEP 4: Define Operational Re-quirements

In addition to prescribing input-outputspecifications, the work statementshould define requirements regardingoperational policies, procedures, andother elements that are considered im-portant to the success of the COM-


ponent. Examples of these require-ments include:

methods, testing instruments,and information to be collectedfor participant assessment;

4 policies to be followed in par-ticipant selection;

specific criteria for acceptabletraining and worksites, such astypes of training equipment andinstructional materials, andteacher/supervisor:participantratios;

messages/themes to be used inparticipant and employermarketing efforts; and

policies and procedures forverifying participant eligibilityand job placement.

These requirements are important inensuring that the program has bothquality outcomes and quality process.In deciding whether to establish opera-tional requirements, the SDA mustdetermine how much "process" leewayit wants to give service providers andwhetha the service provider is in astronger, more knowledgeable positionto determine the requirements forquality process. However, it is er-roneous to assume that perfor-mance-based contracting prohibitsthe SDA from expressing andprescribing process requirements.As suggested in Chapter 1, the abilityto achieve higher return-on-invest-

35

ments over the long-run will be directlyinfluenced by improvements in pro-gram designs and service providercapabilities. Many of these improve-ments will result from process enhan-cements.

> STEP 5: Define AdministrativeRequirements

A final, often overlooked step in theactivity design process is determiningwhat types of administrative require-ments and procedures need to bereflected in the service provider'soperaVon, or need to be implementedby the SDA in order to effectivelymanage the activity. These require-ments fall into the following categories:

* financial management;

s information collection and perfor-mance reporting;

* monitoring;

* organization and staffing; and

* required coordination arrange-ments.

Financial management and reportingrequirements will probably be standardacross all activities. However, monitor-ing, coordination, and organization andstaffing requirements can and shouldbe tailored to the objectives andspecifications of individual activitiesand service providers. For example:

Monitoring of a newer, riskier ac-tivity should be more corn-

Chapter 4: Defining Performance Tartgets^

prehensive and frequent thanfor a more established activity.However, if innovation in the ac-tivity is important, the monitoringprocedures should not be con-straining. If the participant char-acteristics profile is an importantperformance objective for theactivity, then the monitoring pro-cedures should reflect an ap-propriate focus on this perfor-mance dimension.

Coordination arrangementsmay or may not be relevant tothe effective operation of theSDA's delivery system. Whereservice providers have an inde-pendent responsibility forrecruitment, selection, trainingand placement of participants,coordination arrangements arenot relevant. Where the designof the delivery ..:istem estab-lishes a mors comprehensive,interactive, cross-referralrelationship among serviceproviders, the coordination ar-rangements become relevant,and should be specified in thework statement.

Organization and staffingspecifications may or may notbe important to the success ofthe activity. In classroom tlain-ing, instructor qualifications andexperience often make the dif-ference between success andfailure. For other activities, dif-ferences in staff capabilities may

36

not have such a direct and criti-cal impact on performance. Indeciding whether to define or-ganization and staffingspecifications, the SDA mustdetermine if it is in a strongerposition than prospective ser-vice providers to define validqualifications.

Some people have viewed one of themajor advantages of performance-based contracts to be a streamlining ofadministrative requirements and proce-dures. However, performance-basedcontracts are not intended to create alaissez-faire approach to management.Where procedural and process re-quirements, as well as results, are im-portant, they should be specified in thework statement and ultimately reviewedthrough the monitoring process.

To summarize, work statements are acritical, valuable tool for refining theprogram design into performance tar-gets and operating specifications thatwill facilitate the achievement of theSDA's goals - both quantitatively andqualitatively. Development of workstatements will help the SDA to: (1)clearly define the full scope of perfor-mance dimensions for the activities it isplanning to operate; (2) clearly andcompletely communicate performanceexpectations to prospective serviceproviders; and (3) exercise more con-trol over the quantitative and qualitativeprogram results that are achieved. Asample work statement for the class-room skills training activity of the


Ozarka SDA, excluding the administra-tive requirements, is presented in Ex-hibit 10.

Exhibit 10Work Statement: Occupational ClassroomSkills Training

I. COMPONENT DESCRIPTIONThe purpose of this activity is to pro-

vide skills-based instruction and train-ing in the following occupational areas:

Data entry clerk

Licensed practical nurse

Machinist

Shipping and receiving clerk

The instruction and training will besupplemented, on an as-needed basis,with individualized remedial educationand counseling to ensure that eachparticipant can keep pace with andsatisfactorily complete the trainingmodule at the end of the training, whichfocuses on the developmPnt and ap-plication of job search skills.

II. PARTICIPANT SERVICEOBJECTIVES

The composition of total enrollmentsin the activity must achieve the follow-ing minimums:

% Female = 67%

% Black = 40%

% Hispanic = 40%

37

% Dropout = 20%

% Welfare recipient = 15%

This activity is designed to serve par-ticipants with the following employmentbarriers:

* no job relevant skills;

* limited work experience;

* need for income above the mini-mum wage level.

III. PARTICIPANT ASSIGNMENTCRITERIA

A. Minimum Qualifications For Entry

must have a functional readinglevel of 9th grade or above

for data entry and shipping andreceiving clerks, must have afunctional math skills level of 8thgrade or above

for data entry clerk andmachinist, must have two-handed manual dexterity re-quired to perform tasks of thesejobs

for licensed practical nurse,must have no prior record ofdrug use

B. Maximum Qualifications For Entry

must not have prior work ex-perience in occupation of train-ing


must not have a functional read-ing or math level exceeding 12years

must not have cumulative priorwork experience exceeding 4years

IV. ACTIVITY OUTCOMES

The expected outcome of this activityis job placement All placements mustbe in jobs which are occupationally re-lated to the occupation in which theparticipant is trained; occupational re-latedness will be defined as possessingthe same first 3 digits of the D.O.T.classification.

In addition, all placements must pay aminimum wage of $4.25 per hour witha fringe benefit package that includesmedical coverage. Any job placementsnot satisfying these criteria will not becredited for compensation purposes.

V. PERFORMANCE OBJECTIVESMinimum and expected levels of per-

formance in this activity are as follows:

Adult enteredemploy rate

Welfare enteredemploy rate

Cost per enteremployment

Minimum

70%

60%

Expected

75%

65%

$4,900 $4,700(max. cost)

Average wage atplacement $4.65 $4.80

38

Each training class must have a mini-mum enrollment of 20 participants anda maximum enrollment of 30.

VI. OPERATIONALREQUIREMENTS

A. Recruitment

The service provider will notify theSDA's Intake Center 30 days in ad-vance of start-up of any training classfor the purpose of referrals. Theresponsibility for participant selectionand minimum enrollment levelsremains with the service provider.

B. Eligibility

The service provider shall refer all ap-plicants to the Chasem Creek Com-munity Services Department foreligibility verification. The serviceprovider shall not enroll any individualwho has no1 been certified as eligibleby Chasem Creek CSD.

C. Support Services

The service provider shall coordinateas necessary with other communityagencies for the provision of supportiveservices. Payment of costs for suppor-tive services is the responsibility of theservice provider.

D. Placement

The service provider shall refer all par-ticipants not placed within 45 days aftertraining completion to the SDAadministrative entity. The service


provider will not receive any placementcredit for placements made by the SDA.

C. Conclusions

In an era of performance-based con-tracting and quantitatively-derivedstandards of performance andrewards, the value of detailed activityplanning and the effort required todevelop work statements can be ques-tioned. The value is suggested inrecent findings of the U.S.DOLJETAregarding deficiencies in performance-based contracting procedures. Thesefindings are producing some seriousdiscussions regarding a Rtightening" ofthe requirements for using perfor-mance-based contracts, at least interms of what costs can be charged astraining costs. The solution certainlyhas policy implications, but the fun-damental cause of the identified

39

deficiencies is sloppy procurementpractices; and sloppy procurementbegins with unclear and incomplete ex-pectations.

More importantly, the value of workstatements is capsulized in the perfor-mance accountability responsibilitiesthat are implicit in the Job TrainingPartnership Act. The Private IndustryCouncil and the staff of the administra-tive entity are not only responsible forusing the available funds effectively andefficiently; they ara also responsible forensuring the responsiveness of thelocal job training program to the needsof the target populations and of areaemployers. Fulfilling these respoo-sibilities requires the SDA to exercisedirection and control over serviceprovider plans and accomplishments.

CHAPTER 5: Motivating ServiceProviders to Meet All PerformanceExpectations

The preceding chapters have em-phasized the importance of definingclear expectations on all significant per-formance dimens;ons of the local jobtraining program. As stated in Chapter2, good performance begins with good,clear, complete expectations. How-ever, to requote Chapter 2:

"Expectations without inspections aremeaningless;inspections without ex-pectations are not fair; expectationsand inspections without compensa-tions are not motivating."

In this chapter, we shift the focus tosome of the considerations in structur-ing a system of compensations andinspections that will motivate theachievement of the qualitative andquantitative performance expectationsthat have been established.

A. CompensatingPerformance

Motivating performance is primarily afunction of compensating performancein accordance with agreed-upon ex-pectations. In spite of the best of inten-

41

tions, it is a natural law of behavior thatpeople will pursJe the path of leastresistance to accomplishing a givenobjective. Although we have estab-lished some limits on behavioralprerogatives by defining input-outputspecifications, participant assignmentstandards, maximum enrollment andminimum cost levels, etc., we must alsoacknowledge in our compensationstructure the greater difficulty and riskfactors inherent in pursuing qualityresults.

In performance-based contracts, thecompensation structure is defined bytwo variables: (1) the total fixed unitpayment for full performance; (2) thecomposition of interim performance/payment benchmarks.

> STEP 1: Determining the FixedUnit Payment

The first step is to determine what thefixed unit payment should be for attain-ment of the desired outcome from theactivity. For adult participants, the out-come will be a training-related jobplacement. For youth participants,there is a range of possible outcomes,

Chapter 5: Motivating Service Providers

thus complicating this step somewhat.However, even for adult participants, allplacements are not the same. There willbe differences in the number of employ-ment barriers addressed, the intensityof services provided, and the quality ofthe iob in which the placement is made.Adjustments need to be made in thefixed unit payment to account for thesedifferences.

Although there is currently no hardand fast methodology for determiningwhat the fixed unit payment for a givenoutcome should be, the U.S. Depart-ment of Labor, in its policy issuances,has discussed the concept of"reasonable cost." According to theU.S.DOL, "reasonable cost" will bedetermined by the structure of theproposed training package which willbe defined by factors such as hours ornumber of weeks of training, number oftotal participants, etc. However, thereare additional intuitive factors thatshould be considered in deriving fixedunit payments for specific activities andcomponents.

CHARACTERISTICS OF TARGETGROUPS TO BE SERVED

To the extent that an activity/com-ponent focuses on serving targetgroups that are acknowledged by theperformance standards model to in-crease the cost per enteredemployment/cost per positive termina-tion (e.g., welfare recipients), the fixedunit payment for achieving a positiveoutcome in this activity/componentshould be higher than in similar ac-

tivities/components which do not focuson such target group(s).

EMPLOYMENT BARRIERS TOBE ADDRESSED

To the extent than an activity/com-ponent is designed to address multipleemployment barriers (e.g., basic read-ing skills, limited work experience, workmaturity behaviors) and/or intensivedeficiencies regarding employmentrequirements (e.g., less than eth gradereading comprehension, no jobspecific skills), the fixed unit paymentshoula be higher than for activitiesaddressing a more limited or less inten-sive range of employment barriers.

SCOPE, INTENSITY ANDDURATION OF SERVICES TO BE

PROVIDED

The mirror image of scope and inten-sity of barriers to be addressed is thescope, intensity, and duration of ser-vices to be provided within an ac-tivity/component. Coupled activitiessuch as remedial education-classroomskills training should have higher fixedunit costs than non-coupled activities.Components with support servicesshould, in general, have higher unitcosts than those which do not. Longer-duration job skills training activitiesshould have higher unit costs thanshorter-duration activities.

QUALITY OF THE JOB IN WHICHTRAINING AND PLACEMENT IS

BEING MADE

Other factors being relatively equal,training ii higher quality jobs (i.e., as

42

defined by wages, growth and upwardmobility opportunities) will tend to be oflonger duration and/or intensity and,thus, should reflect a higher fixed unitcost.

These factors do not define what thefixed unit payment should be. Inevitab-ly, that will be the resutt of a negotia-tions process. But these factors dodefine differences in the level of invest-ment required to achieve a positive out-come and, consequently, shouldcorrelate with differences in the fixedunit payments for different activities.

> STEP 2: Adjusting UnitPayments to ReflectQualitative Differences

The second step is to establish astructure which adjusts the unit pay-ment to reflect qualitative differences inspecific activity inputs (i.e., the intensityof employment barriers for individualparticipants) and activity outputs (i.e.,the features and benefits of individualjob placements).

One approach to deriving adjust-ments in the total fixed unit payment isto develop a point-scale reflecting dif-ferences in the range or intensity ofbarriers addressed, the quality of jobplacements, etc. To illustrate, let'sreturn to the Ozarka classroom skillstraining example. One of the barriers tobe addressed was limited work ex-perience which, of course, can bedefined in several ways. To acknow-ledge the increased difficulty of serving

43

Chapter 5: Motivating Service Provkiers

participants with more limited work ex-perience, we can define a range ofscaled definitions for limited work ex-perience; e.g.:

Recent, Prior (= mor than 13weeks within the previous sixmonths);

Extensive, Not Recent (= morethan 1 year but none within thelast six months);

Limited, Recent (= less than 13weeks within the previous sixmonths);

Limited, !lot Recent (= lessthan 13 weeks and none withinthe previous six months);

No prior work experience.

The next step is to assign a dollarvalue adjustment to each scaled defini-tion. These adjustments will be addi-tions to, or subtractions from, the fixedunit payment level that has been estab-lished for the activity outcome in Step1. The degree or amount of the adjust-ment will need to be sufficient for theservice provider to be motivated to as-sume the higher risks and costs of serv-ing participants with more extensive orintensive employment barriers.

Continuing with the classroom skillstraining example, let's assume that afixed unit payment ( = cost per enteredemployment) of $4,000 has been es-tablished for one of the skill areas in thisactivity. One set of adjustments, based

I


on the work experience barrier, couldbe made as follows:

Recent, Prior = $ 100

Extensive,Not Recent = - $ 50

Limited, Recent= 0

Limited,Not Recent= + $ 50

No Prior= + $ 100

In this example, the unit payment fortraining and placing a participant withrecent, prior work experience would be$3,900 (=$4,000 - $100), and for aparticipant with no prior work ex-perience the payment would be $4,100(= $4,000 + $100).

This same process can be applied toeach significant barrier which is to beaddressed in the activity. For example,the adjusted fixed unit payment mightbe as high as $4300 for a participantwith no prior work experience and threeor more dependents, or as low as$3700 for a participant with recent, priorwork experience and no dependents. Asummary of the possible fixed unit pay-ments using these two sets of barriersis presented in Exhibit 11.

A final, additional adjustment can bemade regarding the quality of job place-ments. Following the same approach ofproviding scaled definitions for jobplacement, we might establish the fol-lowing scale:

44

Wage at $4.00 - 4.49/hour $50

Wage at $4.50 - 4,74/hour = $25

Wage at $4.75 - 5.24/hour = 0

Wage at $5.25 - 5.74/hour = + $50

Wage at $5.75 + /hour = + $75

This adjustment will really reflect apenalty/reward based on the quality ofthe job actually attained. It is indepen-dent of the derivation of the fixed unitpayment based on participant employ-ment barriers. Nevertheless, the SDAmust be careful in determining theamount of the adjustments for thequality of job placements in relation tothe amount of the adjustments for theextent and intensity of participant bar-riers. The guiding principle is that theservice provider should be able to earnmore by training and placing par-ticipants with more extensive/intensivebarriers than for making higher qualityplacements, because if the reverserelationship exists the service providerwill focus on serving participants whocan be more easily placed in higherwage jobs.

> STEP 3: EstablishingPerformance andPayment Benchmarks

The third step is to determine whatstructure of interim performance andpayment benchmarks will be used. Therecent policy guidance from U.S.DOLhas recognized the practical necessityof interim payment benchmarks in per-formance-based contracting unless the

Exhibit 11AEGUSUNENTS TO FIXED UNIT PAYMENT BASED ON PARTICIPANT BARRIERS

Income Neea

Work EXperience

SecondaryWage EarnerNo Dependents(- $200)

Primary WageEarner

No Dependents(- $100)

Primary WageEarnar WithSpouse(0)

Primary WageEarner With

TWo Dependents(+ $100)

Primary WageEarner With3 + Dependents

(+ $200)

- Recent, Prior(- $100)

$3,700($4,000-$300)

$3,800 $3,900 $4,000 $4,100

- Extensive, NotRecent (- $50)

$3,750 $3,850 $3,950 $4,050 $4,150

- Limited, Recent(0)

$3,800 $3,900 $4,000 $4,100 $4,200

- Limited, NotRecent (+ $50) $3,850 $3,950 $4/050 $4,150 $4,250

- No Prior (+$100) $3,900 $4,000 $4,100 $4,200 $4,300


SDA is going to operate low cost, shortduration activities - which is not consis-tent with the overall purpose of the Act.This step entails determining what

types of performance/ paymentbenchmarks will be used (e.g., trainingmidpoint, training completion, jobplacement, retention), and what thepercentage all 'cation of the total unhtpayment to each benchmark will be.JTPA implementation appears to becharacterized by some extremes in theapproach taken in this step. On theone hand, some SDAs have allocatedup to 90% of the total unit payment priorto placement, thus offering minimal in-centives to the service provider to effec-tively complete the full training,placement and retention process. Atthe same time, a common practiceamong other SDAs has been to allocatethe majority, and sometimes all, of thetotal payment to the placement andretention benchmarks. Althoughrriotivating, this approach alsoproduces some undesirable results;specifically:

An inadequate effort is placedon focused recruiting, which en-tails additional expenses, be-cause the payment for enroll-ment is insufficient to cover thecosts of this effort. The em-phasis is on getting enougheligible participants to fill theclass.

The duration of training activitiesis compressed to accelerate thefrequency of payments. This

46

generally means that significantemployment barriers will not beadequately addressed or over-come through the activity.

A "cattle auction" approach isused in the placement process,as providers, anxious to earntheir payments, try to place asmany participants as quickly aspossible after completion of thetraining.

These actions do not indicate mali-cious or greedy behavior by serviceproviders. They reflect the real difficul-ties of cashflow management createdby the reality of payments occurringwell after the work was performed andexpenses were incurred.

Consequently, payment benchmarksneed to be established according to theobjectives, duration, and the input-out-put specifications of the activity. Forexample:

If the characteristics or targetgroup profile of participants is animportant qualitative perfor-mance factor, then a relativelylarger percentage of the totalpayment should be allocated toearlier benchmarks, to en-courage and support the abilityof the service provider to makethe additional up-front invest-ments required to get these"harder-to-attract-and-serve"participants into the program.Obviously, payments should be


contingent on enrolled par-ticipants having the requiredcharacteristics and barriersprofile.

If the activity is of longer durationand includes intensive orremediation services, multipleinterim benchmarks (e.g., train-ing midpoints) should be es-tablished. More intensive,longer-duration training entailsadditional costs. For qualityskills training, investments haveto be made in instructionalmaterials, equipment and otherfacilities. To the extent thatnewer, customized, classroom-based training is being en-couraged, these investmentshave to be made at the begin-ning of the training cycle. It isunreasonable to expect serviceproviders to carry these costsplus staff costs over a period of3-6 months or even longer. Thebenchmarks should be definedin a manner that reflects sub-stantive skills competency at-tainment vs. length of time intraining.

If job placements with specificqualitative dimensions (e.g.,wages, targeted sectors) are animportan: objective, then moreof the total payment should beretained for this benchmark.

The guiding principle is that the struc-ture of payment benchmarks should

47

mirror the objectives and design of theprogram and individual activities.

> STEP 4: Adjust the Fixed UnitPayments to Reflect RiskDifferences

One final consideration in establishingthe compensation structure is to makeadjustments in fixed unit paymentsreflect differences in the level of certain-ty associated with attaining the plannedoutcomes. In Chapter 1, we discussedthe importance of making investmentsin "new and refined" program activitiesand service-provide Yet many SDAsexperience substai 1 difficulties insuccessfully soliciting pi oposals for in-novative programs or projects. A majorcontributing reason for this lack of suc-cess is the failure of SDAs to acknow-ledge the higher risk levels associatedwith implementing innovative projectsunder performance-based contracts.In effect, the SDA expects innovativeprojects for the same performancelevels and the same unit costs as moreestablished, proven activities. It is un-realistic to expect that organizations willundertake higher risk activities whenthey can earn the same amount ofmoney with a much higher probabilityof success (i.e., with established,"status quo" projects). Therefore, theSDA should be willing to pay more - ona unit basis - for new, refined, innovativeprojects - other performance dimen-sions being equal - and, thus, establisha balance in the relative risks beingassumed by the SDA and by the serviceprovider.


B. InspectingPerformance

The basic requirements for monitoringperformance-based contracts providea good opportunity for assessing thequalitative effectiveness of programopetations. In monitoring perfor-mance-based contracts, we not onlyhave to review summary reports of pro-gram or activity results, we have toreview source documents that verifythe attainment of performance/pay-ment benchmarks by individual par-ticipants. These documents caninclude application and enrollmentforms, training test results, and place-ment verification forms. When these re-quirements are combined with therequirement that an EmployabilityDevelopment Plan (EDP) must beprepared on each participant, we havea fairly strong base of information onwhich to assess the effectiveness of theoverall program and individual serviceproviders in meeting the input-outputspecifications that were defined in theplanning process.

INSPECTING PROGRAM INPUTS

As part of the process of tracking ac-tual performance in relation to perfor-mance standards, the SDA should bemonitoring the characteristics profile ofparticipants and terminations becausethe end-of-year profile of terminationswill determine what the applicable per-formance standards for the SDA are.The prudent SDA will, as part of thisprocess, monitor the characteristics

48

profile of participants served by each ofits service providers.

However, as previously stated,demographic characteristics are an in-sufficient measure of the population(s)most in need of assistance, and in theplan development process inputspecifications were developed on thebasis of extent and intensity of employ-ment barriers. The monitoring procedures should be designed such that aselective review of participant EDPs iscompleted. The purpose of this reviewis not only to ensure that EDPs arebeing prapared, but also to identify thetypes of employment barriers that arecharacterizing the participants who arebeing enrolled. This review will benecessary to verify that fixed unit pay-ment adjustments based on individualparticipant barriers are consistent withinformation included in assessmentresults in the EDPs.

EDP reviews should be supplementedwith on-site interviews with participantsand project staff. These interviewsshould be planned and preceded by areview of available documentation onthe participants to be interviewed.Questions should be posed to both theindMdual participant and appropriatestaff that verify the accuracy of barriersindicated on the EDP and of perfor-mance results that have been reported.

Obviously this procedure can be verytime-consuming and quickly getbeyond the monitoring resources of theSDA. The key is to be selective, focused

t


and organized in the review and inves-tigation process. If problems are indi-cated, a snore complete review can beundertaken.

INSPECTING PROGRAM OUTPUTS

The same process can be applied toreviewing and assessing the qualityand effectiveness of program out-comes. A review of placement verifica-tions should be an integral part of anymonitoring procedure. On the place-ment verification form, the SDA shouldbe able to ascertain the type of job andthe wage at placement. These are twoqualitative indicators that can be com-pared with performance expectations.The placement verification informationshould be used to confirm the accuracyof any adjustments to the fixed unitpayment based on the quality of in-dividual job placements.

Placement information can also becompared with planned participant out-comes, as defined on the EDP, for aselect number of participants. Thisanalysis can provide some insightsregarding the effectiveness of the pro-gram in achieving outcomes for par-ticipants that are consistent with needsand erectations.

This approach also can and should beused in evaluating the effectiveness ofnon-placement outcomes, such ascompetency attainment. Again, thedocument review should be supple-mented by interviews with participants,project staff, and employers.

49

INSPECTING PROCu1414M PROCESS

If the SDA has established operationalrequirements for the program and/orindividual components, these shouldbe reviewed as part of the monitoringprocedure. Again, documentation re-lated to the attainment of performancebenchmarks should be reviewed bothfor completeness and for what the in-formation indicates about the quality ofprogram implementation. In terms ofprogram process, the monitoring pro-cedure should include selective obser-vations of classroom and worksiteactivities, and interviews with both par-ticipants and staff.

It is not the purpose of this guide tofocus on inspection or monitoring pro-cedures. However, to the extent thatthe SDA incorporates qualitative perfor-mance dimensions into its expecta-tions , and establishes paymentdifferentials based on qualitative dif-ferences, the review of quality-basedperformance factors must be an in-tegral part of the SDKs monitoringprocess and procedures.

C. Conclusions

Implementing the type of compensa-tion and inspection approach outlinedin this chapter is not an easy process.It requires the ability and willingness toisolate and review data on an individualparticipant and job placement/programoutcome basis. Fortunately, the basicapproach is already being used in themanagement of performance-basedcontracts. What is required is to go

: 7

h


beyond a general review of sourcedocuments used to support perfor-

mance payments, and to identify some

of the qualitative differences in program

inputs and outputs that are reflected in

the information included in those docu-

ments.

50

Some illustrative examples of alterna-

tive compensation structures, asdescribed in this chapter, arepresented in Appendix A.

CHAPTER 6: Achieving Quality Results

This guide began by posing the ques-tion:

"In an era of performance-drivensystems management withquantitatively derived rewardsand sanctions, how can an ap-propriate focus on qualitativeperformance dimensions be es-tablished?"

Through this guide, we have tried tosuggest that the solution to this cnal-lenge is one primarily of management,and not significant policy overhaul.Yet, the solution is multi-dimensional,requiring a combination of raised ex-pectations, focused and thorough in-spections, and motivating,compensations.

Fundamental to the approach outlinedin this guide is that improved, higherquality performance can not beachieved unless it is first of all wantedand expected. Particularly with the1988 refinements to the performancestandards model regarding fellow-upindicators and maintenance of unit costlevels, there is sufficient incentive andflexibility within the model to produceboth good quantitative and qualitativeresults. Local program managers anddecision makers must be willing to raise

51

their sights and to expand the scope ofperformance expectations which theyestablish through the planning and pro-gram design process (as discussed inChapter 3).

Nevertheless, higher expectations arenot a sufficient condition to produceimproved performance. As discussedin Chapter 2, effective performanceresults from an integrated set ofmanagement decisions and actions re-lated to program planning, contracting,performance monitoring and correctiveaction, and rewards and sanctions.Poor or erratic performance occurswhen the decisions and actions in eachof these areas are not in synchron-ization with each other.

Performance-ba3ed contracting, inconjunction with the pvformancestandards, has provided a significantboost in increasing the quantitative out-comes and results of job trainingprograms. However, no contractingprocess, including performance-basedcontracting, can be successful withoutappropriate parameters on all of thekey dimensions of performance. Per-f o rman ce-based contracting isdesigned to provide service providerswith substantial flexibility and discretionin determining the methods used to

Chapter 6: Achieving Quality Results

obtain results. PBC is not designed toprovide that flexibility and discretion indetermining the Inputs and outputs,which are qualitative definitions of theresults to be achieved. The purpose ofChapters 3 and 4 was to identify thedecision areas and describe a processfor ensuring that appropriateparameters are established for serviceprovider actions.

Finally, good performance occurswhen appropriate motivators are inplace and used. As stated throughoutthe guide, good expectations and con-tracts are relatively meaninglesswithout an appropriate structure of in-spections and compensations. Thepurpose of Chapter 5 was to providesome suggestions for motivating ser-ice provider behavior in support of the

performance expectations which havebeen established.

The long-term mission of the JobTraining Partnership Act requiresbalanced attention to both the quantita-tive and qualitative dimensions of pro-

52

gram performance. Quality withoutquantity does not have credibility in thefederal budgeting process, nor in thepolitical processes of most localities.The performance standards aredesigned to ensure that appropriatelevels of quantitative results areachieved. Yet, quantity without qualitywill not fulfill the general mandate of thelaw, nor the return-on-investmentdefinition implicit in the purpose ofJTPA. It is easy to achieve a higherreturn-on-investment by continuallyreducing the investment base, or in thejob training context continually loweringthe participant unit cost. But this is nota growth strategy, nor is it one thatrepresents an investment in humancapital. The alternative is to expandthe investment base, while at the sametime producing outcomes that repre-sent ever-Increasing Improvementsin the pre-program employment,employability and income conditions ofthe people being served. This guidehas been developed to provide someuseful suggestions for achieving thatpurpose.

APPENDIX A

Alternative Approaches for Adjustingthe Fixed Unit Payment

A-1

TABLE 1

Adjustments to Fixed Unit Payment Basedon Participant Barriers

(Hypothetical - tor illustration purposesonly)

Table 1ADJUSTMENTS TO FIXED uNrr PAYMENT BASED ON PARTICIPANT BARRIERS

Iname Need

Work Experience

SecondaryWage EarnerNo Dependents(- $200)

Primary WageEarner

No Dependents(- $100)

Primary WageSarner WithSpouse(0)

Primary WageEarner With

TWo Dependents(+ $100)

Primary WageEarner With3 + Dependents

(+ $200)

- Recent, Prior(- $100)

$3,700($4,000-$300)

$3,800 $3,900 $4,000 $4,100

- Extensive, NotRecent (- $50)

$3,750 $3,850 $3,950 $4,050 $4,150

- Limited, Recent(0)

$3,800 $3,900 $4,000 $4,100 $4,200

- Limited, NotRecent (+ $50) $3,850 $3,950 $4,050 $4,150 $4,250

- No Prior (+$100) $3,900 $4,000 $4,100 $4,200 $4,300

TABLE 2

Impact of Activity Design Variables onStructure of Payment Benchmarks

(Hypothetical - for Illustration purposesonly)

A-3

7e;

Table 2Arousmarrs Tp Pulma4En7 AND REUNITON PAYMENTS BASED ON CHARACTERISIICS OF JOB PLNCEMENT

Placement/RetentionChar.

Placement * Retention *

$4.00- $4.50- $4.75- $5.25 $5.75+ Not Re- <Place >Place Worked Wbrked Wbrked4.49 4.74 5.24 5.74 tained Wage Wage 5-8Wks 9-11Wks > 12 Wks(-$100) (-$50) (0) (+$50) (+$100) (-$100) (+$50) (-$100) (0) (+$100)

Barrier AdjustmentPayment

$3,800 $1,420 $1,470 $1,520 $1,570 $1,620 0 $470 $620 $470 $570

,

$670

$:,9o0 $1,460 $1,510 $1,560 $1,610 $1,660 0 $485 $635 $485 $585 $ 685

$4,000 $1,500 $1,550 $1,600 $1,650 $1,700 0 $500 $650 $500 $600 $700

$4,100 $1,540 $1,590 $1,640 $1,690 $1,740 0 $515 $665 $515 $615 $715

$4,200 $1,580 $1,630 $1,680 $1,730 $1,780 0 $530 $680 $530 $630 $730

* Assumes 40% Of Payment At Placement and 15% At Retention. I

vet

I. -

TABLE 3

Adjustments to Placement and RetentionBenchmarks Based on Characteristics ofJob Placement

(Hypothetical - for illustration purposesonly)

A-4

Table 3IMPACT OF ACTIVITY DESIGN VARIABLES ON STRUCTURE OF PAYMENT BENMIARKS-ILLUSTRATICN

Benchmark

Acttvity Design

* Allocation of T-4tal Fixed Unit Payment

Enrollment TrainingObjectives

1

TrainingObjectives

2

TrainingCOmpletion

Placement Retention

Single Activity, < 4 weeks 20% 20% 40% 20%

Single Activity, 1-3 months 20% 15% 15% 35% 15%

Single Activity, 4-6 months 15% 20% 20% 35% 10%

Single Activity, > 6 months 15% 15% 15% 15% 30% 10%

. Ccupled Activity, < 6 months 15% 20% 20% 35%

_.

10%

Coupled Activity, > 6 mcnths 15% 15% 20% 20%

---___

25%

--.0

5%

1rGeneral

i

Eligible Population 15% 20% 45% 20%

Mbre Barriers wHarder-To-Serve"

25%

25%

35% 15%

B

1

Established, Proven Activity 15% 25% 40% 20%

New, Untested Activity Design 25% 10% 20% 35% 10%

* For Illustration Purposes Only. Not Recommended %'s For Every Situation.

APPENDIX B

Sample Performance-BasedContracting Tools

Work Statement Formats Used to RFPand Contract for Specific Activities

Coosa Valley Area Planning andDevelopment Commission ServiceDelivery Area 17

Rome, Georgia

iIL 'tior

A. GFVERAL INFORMATION

1. Number of slots:

WORK STATansiTYOUTH COMPF:n.VCIES

Aem.0.11,

rgft4;

2. Nmber to be served:

3. Type of Training: Youth Competencies - Pre-employment Skills

4. Counties to be served:

5. When training to he provided: 08-01-87 to 06-30-88

6. Schedule of Training:

TASF/ACTIVITY BEGIN DATE COMPLETION DATE

Recruit '!taining StaffRecruit Trainees/ParticipantsIdentify and Secure Training FacilitiesParticipant TrainingTrainee Job Placement/Competency

Attainment

7. Competencies that particinants will acguire: PIC-approved compe-

tency level in pre-employment/work maturity skills.

B. PROGRAM CCNTENT

1. Performance Standards:

Number to be served:Positive termination rate:Entered employment rate:Cost per positive termination:

2. Target Groups:

wimmimm.

a. Female 60%

b. Age 14-15 35%

C. Age 16-17 55%

d. Age 18-21 10%

e. Black 2

f. Student 30%

g. Dropout 35%

h. handicapped 15%

i. Welfare Recipients 20%

3. Entry Criteria:

JTPA eligible youth age 14-21 enrolled in a secondarY educational

institution or dropouts who are residents ofand whose score

on the competency pre-test indicates that they lack understanding

of subject matter included in the competencies. Priority will he

given to potential dropouts, dropouts, welfare recipients and those

who do not plan to go on to post-secondary education.

4. Exit Criteria:

Achievement of the specific number of competencies in each of the

three components: career decision making; joh seeking skills and

job keeping skills. Some students may attain employment.

5. Services to be Provided:

Outline of youth competencies curriculum follows:

Curriculum Outline for Youth Competencies

A. Assessment testing and counseling

R. Career Exploration

C. Career Decision Making

D. Job Seeking Skillv

1. Elements of Job Seach2. Job appli:ations3. Resumes4. Cover letters5. Scheduling Interviews

6. Interviesas

7. Interview follow-up

E. Job Keeping Skills

S I

1. Followina oral directions2. Following written directions3. Listenina skills4. Filling out appropriate forms (tax, insurarce, etc.)5. Accepting criticism6. Goal settira

Budgeting8. Financial management9. Stress10. Personnel policies11. Work habits

6. Schedule of Training Locations and Traininq Hours: Training willbe for hours per day, days per week for weeks.Classes will be held in

7. Counseling:

Counseling will be an on-aoing part of the curriculum and will beprovided a mirtmum of three (3) tines by the instructor or

will bereoponsible for completion of the EDP.

8. Job Development and Placement:

Job Placement will be secured primarily throw!, self-diracted iobsearch by the participant.

9. Selection Methodoloav:

Priority will be given to eligible youths who plan to enter thefull-time labor market upon leaving sdhool.

Assessment tools to be used

a. Pre-test/Post-test on pre-emplovme.lt skills developed by FloydJunior College

b. rnmpetencies approved by the Private Industry Councilc. (mecklist for compete4lcies approved by the Private Industry

Councild. Performance Rating Sheet for competenciese. File folders with documentation of competency achievement

10. Facilities:

space as needed at no charge to the proaram.

11. Equipment:

Necessary equipment will be provided byat no cnarge to the program.

will provide classroom

12. Internal Administrative Procedures:

a. Job Descriptions

Instructor -

Instructor Aide

b. Internal Administrative Procedures

(Position) will maintain thefiscal records and supporting documentation for the JTPAprogram. (Position will maintain dailyattendance records for participant orientation. (Posi-tion) will sign invoices. (Position) willtrack participant progress during training.

A. GFINTERAL IrFORMATION

1. Numbpr of slots:

wORK STATFIKEIr

SHORT-TERM

; (adult youth

2. Numl-er of participants: ( adult, youth)Contractor will serve carryovers from FY '87 cmtract (

in placement and actively training).

3. Tyre of Training:

4. Counties to be served:

5. When training to be _provided: 08-01-87 to 06-30-88

6. Schedule of Training:

TASK/ACTIVITY BEGIN DATE COMPLETION DATERecruit Training StaffRecruit ParticipantsIdentify and Secure Training FacilitiesParticipant TrainingTrainee Job PlacemenL

7. Competencies that participant will acguire:

B. PROGRAM COUTENT

1. Performance Standards:Adult Youth

a. Total number to be served:b. Entered employment rate:C. Cost per entered employment:d. Average wage at placement:e. Entered empLoyment rate at follow-up: 65 %

f. Average weekly earnings at follow-up: $ 188.00

2. Target Groups:

L. Femaleb. Age 16-21

I

C. Blackd. Dropoute. Handicappedf. Unemployment Insurance Claimant -----%q. Welfare Recipienth. Student

3. Entr! Criteria:

4. Exit Criteria:

5. Services to be provided:

6. Schedule of trzdning:

days a week; hours a day (a.m./p.m.) to(a.m./p.m.); average weeks of training atlocation.

7. Counseling:

will be responsible for counseling ser-vices and EDP completion. A rdnimum of personal coun-seling sessions will be scheduled with each participant.


9. Selection Methodology:

10. Facilities:

11. Equipment:


Staffing positions and responsibilities include the following:

13. Summary of course curriculum:

A. GENERAL LNPORMATION

1. Number of slots:

WORK STATEMENTINDIVIDUAL REFERRAL

adult, youth).

2. Number of participants: C adults and youth will

he ser,-ed). Contractor will serve carryovers from FY'87contract ( in placement and actively training).

3. TYpe of training: Occupational Skills training through individualreferral to existing classes at

4. Counties to he served:

5. Areas of training are as follows:

6. When training to be provided: This proiect will begin July 01,1987 and end June 30, 1988. Enrollment of new participants willbegin on or after July 01, 1987.

7. Schedule of training: The training schedule is as follows:

Summer auarter becins and ends

Fall quarter begins and ends

Winter auarter hegins and ends

Spring quarter begins and ends

8. Competencies that participant will acquire: Competencies acquiredwill vary according to training program. The grading system

standard and procedures for evaluating student programs is

outlined in 's catalog. A JTPA trainee

is expected to maintain acceptable progress while in training.

B. PROGRAM CONTENT

1. Performance standards:

The following standards will be met:'

Adults

a. Entered employment rate:b. Cost per entered employment:c. Averaae wage at placement:d. Welfare entered employment rate:e. Retention:

f. At follow-up (F.U.):g. Average weekly earnings at F.U.:

Youth

a. Entered employment rateb. Attained employment enhancementc. Cost per positive termination

2. Target Grouus:

Target groups of trainees in actual numbers and percentages are asfollows:

a. Femalesb. Age 55 years +c. Blackd. Other Minoritye. Dronoutf. Handicappedg. Unemployment Insurance

Claimanth. Welfare Recipient

3. Entry Criteria:

a. General: All participants must meet eligibility requirementsestablished by the Coosa Valley PIC. Other:

4. Exit Criteria:

Participants must have successfully completed all reauirements forthe program of training they entered as specified in the schoolcatalog.


Ninety percent (90%) of trainees will be enrolled in occupationalSkills training which does not exceed quarters atTen percent (10%) of trainees may be enrolled for training up tosix (6) quarters. Six quarters is the maximum training time for10% of enrollments only.

In addition to the occupational skills training, a job-readinesscomponent which teaches job-seeking and :iob-retenticn skills isoffered to all trainees. Counseling with trainees is provided toassess their training needs and assist in placement.

Other:

6. Schedule (Training areas and hours):

f4 t

Full-time day programs meet daily from a.m. - p.m.Full-time elrening programs meet from p.m. - p.m.Classes meet five (5) days per week, days per quarter, and

days per ,,ear.

7. Counseling:

Theand instructors may provide

counseling to participants. The is primarilyresponsible for counseling services. The performsthe following fanctions: (1) counsels with eligible participantsand helps them select occupations within the realm of their inter-ests and abilities; (2) provides screening and career guidance inorder to determine an applicant's trainability; (3) schedules witheach JTPA student, a minimum of personal counseling sessionsper year; (4) instructs participants in job-seeking skills; (5)

provides timely job leads; and (6) contacts employers, and confirmsemployment when JTPA students go to work.


Job Development is a continuous effort. Through personal job-sitevisits, telephone and mail contacts, the Placement Director, JTPACoordinator and instructors make daily contacts with employers.Qualified JTPA trainees will be referred to employers when joborders are received. Also, job leads will be made available totrainees. To further assist in job placement, all JTPA studentswill be instructed in proper job-seeking skills. They vr:11 begiven instructions in resume writing, application procedulis Indwill have the opportunity to participate in a mock interview.


10. Facilities:

All training will take place in the classrooms and labs atwith the exception of the LPN program which re-

quires an internship which will be at

Other:

11. ..2.iprent:

(

All equipment required for training is provided by. Equipment at the school is uP-to-date and meets

safety regulations.

12. Internal administrative procedures:

(Position- ) will maintain the fiscal records andsupporting documentation for the JTPA program. (Position

) will maintain daily attendance records. (Posi-tion- I will certify information necessanr for theissuance of support checks. (Position- ) willdistribute the support checks. (Position- ) willsign invoices. Job Oescriptions are attached.

WORK STATEMENTGED TRAINING PROGRAM

A. GENERAL INFORMATION

1. Number of slots: adults, youth)

2. Number of particicants: ( adults and youth will

be served. Contractor will serve carryovers from FY '87contract / in placement and actively training).

3. TVpe of Training: Eligible participants will be provided academictraining to enable them to pass the GED examination in order forthem to be able to pursue additional training and/or secure entrylevel employment in local growth occupational areas.

4. Counties to be served: The program will serve

5. When training to be_provided:

6. Schedule of trainthg activities:

countv(ies).

TASK/ACTIVITY BEGIN DATE COMPLETION DATE

Recruit Training StaffRecruil ParticipantsIdentify and Secure Training FacilitiesParticipant TrainingParticipant Job Placement

7. The program will operate from

P. PROGRAM CONTENT

1. Performance Standards:

TOtal number to be served:

Adults

a. Enter,.d employment rate:h. Cost per entered employmentc. Average wage at placementd. Welfare entered employment rate

Youth

a. Entered emplcyment rateb. Attained estplovment enhancement

c. Cost per positive termination

2. Target Groups:

FemaleAge 16-21Ace 55+BlackDropoutHandicappedUnemployment Insurance ClaimantWelfare Recipient

3. Entry Criteria:

a. General: All participants must meet eligibility require-ments established by the Coosa Valley PIC.

b. Specific: 1) Participants must have scored at 8th gradelevel or higher on the mests of Adult Basic Education(TARE) in the areas of reading and math and be able toattain the GED within three (3) months; 2) Participantmust be willing ard able to work based upon personalinterview; 3) Other:

4. Exit Criteria:

1) Participants must obtain an average score of 45 or ncreand a minimum of 35 on all tests in order to pass the GED; 2)Participants may be terminated from the program upon jobplacement or entrance into the armed forces; 3) Participantsmay be negatively terminated when


a) JTPA applicants will be interviewed and/or tested todetermine their academic level and their job readiness; b) AnEmployability Development Plan (FIV) will be developed foreach participant; c) Trainees will be provided an orientationregarding training, training expectations, rules and regu-lations, etc.; d) GED preparation instruction will be provid-ed; e) Those who are unsuccessful in the GED program and/orthose leaving the program will be assisted in job development.

6. Schedule of training:

Training is provided days a week, hours a day froma.m. to p.m. There is an average weeks of

training per participant.

7. Counseling:

The (Position ) is primarily responsible toprovide counseling to participant. Theperforms the following functions: 1) Counsels with eligibleparticipants to determine their job readiness, academicdeficiencies, and barriers to employment; 21 schedules witheach JTPA student a minimum of personal counselingsessions per year; 3) maintains the EDP and other counselingnotes.

8. Job Dev_ opment and Placement:

The (Position ) is responsible for assistancein job development. Activities to assist participants in

finding employment are as follows: .=1.11.,


10. Facilities:

Training will be provided. at

11. Equipment:

All equipment required

up-to-date and meets safety

for training is provided by. Equipment at the school is

regulations.

12. Internal Administrative Procqdures:

(Position- ) will maintain the fiscal recordsand supporting documentation for the JTPA program. (Position

) will maintain daily attendance records.(Position- ) will certify information necessaryfor the issuance of support checks. (Posi-

tion- ) will distribute the support checks.(Position- ) will sign invoices. Job de-scription9 are attached.

1

13. Sumter/ of Course airriculin:

97

A. GENERAL INFORMATION

1. Number of slots:

WORK STATEMENTON-THF-JOB TRAINING

adults, youth)(

2. Number of participants: ; adults, 'youth)

Contractor will serve carryovers from 7Y '87 contract;in placement and actively training.

3. Tvpe of Training: On-the-Job Training

4. Counties to he served:

5. When training to he provided: 07-01-87 to 06-30-88

6. Schedule of training activities:

TASK/ACTIVITY BEGIN DATE COMPTIrION DATE

Recruir. Training StaffRecruit ParticipantsIdentify and Secure COT WorksitesParticipant TrainingParticipant Job PlacementParticipant Tracking

7. Competencies that participants will accuire: Occupational Skills

B. PROGRAM CON=

1. Performance Standards

a. NUmber to be served: Adult , Youthb. Percentage entered employment: Adult, Youth

c. Averaae wage at placement: S4.50d. Welfare entered employment rate: 60%

e. Adult etrtplonent rate at follow-up (13 weeks after termination= 65% at $188.00 averace weekly earnings)

if. Cost per entered employment: Adultg. Cost per positive termination: Youtn

2. Target GroupsAdult Youth

a. Females 70% 60%

b. Age 18-21 N/A 100%

c. Age 55+ 5% N/A

d. Slack 24% 27%

e. Dropout 45% 35%f. Handicapped 10% 15%g. Unemployment Insurance Claimant 11% N/Ah. Welfare Recipient 21% 15%

3. Entry Criteria:

JTPA eligible,

4. Exit Criteria:

Completion of five (5) davs of unsubsidized employment followingcompletion of the training period.


Outreach and recruitment, Assessment, Participant Orientation, JobSearch Assistance, OJT Development with Employers, Placement,Monitoring, Lanseling and Tracking as described in the proposal.

6. Schedule Training Areas and Training Hours:

a. Participant Orientation will be given atas needed on through between thehours of and =11=1.=

Length of participant orientation: hours fordays.

b. On-the-Job Training will bc given as developed with employers.

7. Counseling:

andmay provide counseling to participants and isprimarily responsible. The following counseling services will beprovided: 1) assessment of participant's occupational interestsand abilities; 2) career guidance; 3) job seeking counselin-sessions; 4) a minimum of personal counseling sessions; 5)provision of job leads; 6) employment confirmation information: and7) completion of EDP.


On-going


Completion of application, interview by staff member and testing asindicated. (List any other methodology used by your agency)

10. Facilities:

(List facilities and give location)


(Position) will maintain the fiscalrecords and supporting documentation for the JTPA program. (Posi-

tion will maintain daily attendance recordsfor participant orientation. (Position) willsign invoices. (Position) will track participant progress duringtraining.

Job Descriptions are attached.

Performance-based OJT Contract withCost Reimbursement for EmployerTraining Costs

(currently being refined to includepayment benchmarks for placement andretention only)

Northeast Georgia Area Planning andDevelopment Commission ServiceDelivery Area 4

Athens, Georgia

B-3

ATTACHMENT B

SCOPE OF SERVICES

A. TRAINING PROGRAM OFFERED.

lanimmili, will conduct an On-The-Job Training program toprovide business and industry with job-specific skilled employees,

while simultaneously creating job opportunities and hands-on

skill training for economically disadvantaged residents of the

Service Delivery Area (SDA).

Employers will receive reimbursement of up to 50 percent of the

trainee's starting hourly wage,'exclusi.,e of benefits, during the

training period. A training program will be negotiated with the

employer, taking into consideration the trainee's current skill

level and the specific training requirements of the occupation/

skill.

The training will be designed and carried out by the employer at

his/her place of business, which ensures the trainee will be

exposed to the job-specifie machinery, tools and actual work

environment.

4MMOMOMMIM, will recruit, test, and assess applicants to meet

the employer's minimum entry requirements. Referrals will be

made to the employer. The employer makes the final decision

to hire an applicant referred by41.110010.

dolimagisp, will enroll the trainee, monitor his/her progress,provide counseling, and make required payments to the employer.

A job readiness or employability skills training component will

be made available to all participants in need of such services.

Initial paperwork for On-The-Job Training must be finalized before

the trainee begins work at the employer's place of business.

Training periods must not be less than 80 hours in length and

must not exceed the number of hours outlined for that occupation

in the Specific Vocational Preparation Manual. 4111111111111106.,

will utilize the standard SDA 4 OJT Contract when contracting

with employers.

B. ENTRY CRITERIA.

Each employer will make selection criteria known toallIMINIM,through contract negotiations. Criteria for applicant referral

to an employer will be documented in the OJT Contract.

C. EXIT CRITERIA.

Each employer contracting with alielmsji. , will develop specificcriteria for completion of training. mmop criteria for exitingthe program is successful completion of training as outlined inthe OJT Contract.

moms .

D. SERVICES TO BE PROVIDED.

I. The chart on the following page depicts participant flowthrough the OJT program from outreach to 90-day follow-up.Training will be provided at each OJT Contractor's place ofbusiness.

The employer will make the final decision on hiring and trainingparticipants from imiglip pool of referrals. The employer isunder no obligation to retain a trainee, however, all effortsshould be made through participant counseling and contractmonitoring to assure satisfaction of both the employer/trainerand employee/trainee.

ETCON, Inc., will provide the following services as part of thiscontract:

Fqpr,the Applicant For the Employer

a) Assessment/referralb) Referral to training and

supportive servicesJob reaAliness training

d) Counseling and guidancee) Job search assistance

a) Specific aptitude test resultsb) Employer referrals

c) Task analysisd) Training outlinee) Free, direct job placement

2. The employer/trainer and an 4111111Mob Developer will meet andcreate a training outline for each occupation utilizing a systemof observation and functional task analysis. Each trainingoutline will be the equivalent of a mini-curriculum.

The training outline will specify the following items: (a) jobtitle, (b) DOT code, (c) beginning and eliding wage rate, (d) fundedwage rate, (e) training hours allocated, (f) training positions,(g) cost per position, (h) cost per occupation, (i) jobdescription, (j) training categories, and (k) prerequisires.Using 411111011"Job Analysis Worksheet", Ole Job Developer willinterview the employi .iainer to acquire a set of task statementstor a job and develol, position description. Major categoriesor groupings of tasks will be used to develop training categories.The DOT code will be assigned based on the results of this analysili.

PARTICIPANT MIX SUMMARY

LOCAL FACTOAG

1. Female

23 Yrn, and over

J. U1auk

1.

5. Indioal/A1.1.:.,kiln

6. At..i,An/P:AciTic

7. Orcipout

O. HanUicapped

. UC Chlimant

10. Wulfare flcpint

11. 11-15 Yuar 01thi

12. 11.3-21 Ycar 01dt.

13. 5;..uduili.

11. H. S. Cradthate

15. Orrundwr

lb. ,-Iripc Rucii.iunt

17. Limited Lny1itihfpualkiug Ability

io Labor FovLu

5DA PCNCENTAGE

29

60

1

0

1

6

20

IA)

12

10

40

IJ

UIDDCW5 PEPCENTraW.

59

1

55

1

0

0

40

3

6

18

0

45

5

60

1

18

0

15

ATTACHMENT A

A. FIXED PRICE BUDGET

BENCHMARK

COST PER NUMBER OFPARTICIPANT PARTICIPANTS TOTAL

ENROLLMENT $300.00 175 $52,500.00

MIDPOINT $421.69 166 $70,000.00

PLACEMENT $176.17 149 $26,250.00

RETENTION $200.38 131 $26,250.00

TOTAL *$1,098.24 $175,000.00

* The fixed unit price established for the contract is $1,098.24.

B. COST REIMBURSABLE BUDGET

OJT WAGES

NO. OF PARTICIPANTS X HOURLY WAGE X NO. OF HOURS = TOTAL

175 $2.50 215 $94,062.50

TOTAL REIMBURS,,BLE COST: $94,062.50

Section A of this budget is a fixed unit price-performance based contract,pursuant to 20 CFR Section 629.38(e)(2) of the JTPA Regulations. This

contract is for Specific Employer Training at a fixed unit price of$1,098.24 per participant. Full payment of the full unit price will bemade only upon completion of training and placement into unsubsidizedemployment in the occupation for which traini-,g was provided ar a rateof pay as specified in the contract for a retention period of 30 days.

1.65

MILESTONE/PAYMENT POINTS DEFINITION SHEET FOR CONTRACT

A. ENROLLMENT.

I. The Enrollment Fee will be paid for each client who is acceptedand enrolled by the service provider and who attends five (5) daysof training.

2. Enrollment will be verified through the Management InformationSystem (MIS) prior to payment.

3. afilaffiewill review eligibility determination documentation toensure that satisfactory verification is contained in the participantrecord prior to payment of the Enrollment Fee.

4. Replacement participants will not be allowed.

B. TEST POINT (MIDPOINT).

I. Completion of 50 percent of the training and attainment ofspecific measurable skills as outlined in the OJT contract.

2. Contractor will binding...for each participant whocompletes the criteria specified in B.1.

3. The following documentation will be contained in the participantrecord to verify B.1:

OJT Contractor Invoice which demonstrates che participantcompleted 50 percent of the training hours.

C. PLACEMENT.

1. The full Placement Fee will be paid for each participant whoachieves completion of training as specified in the OJT contractand is: (a) placed in full-time (at least 35 hours per week)unsubsidized employment, (b) for at least seven (7) calendar days,(c) in an occupation for which the participant was trained (seeDOT and Wage Sheet), and (d) for which he or she is paid thehourly wage specified on the DOT and Wage Sheet contained in thiscontract.

2. The Contractor will receive 75 percent of the full PlacementFee for all placements which pay less than the wage specified inC.1, but meet all other criteria in that paragraph.

3. Placements must occur within 45 days of completion of thetraining unless an extension is specifically permitted in writing

bYAMMOMMO No extension will be granted beyond 90 days ofcompletion of training.

4. The Contractor is not entitled to a Placement Fee which doesnot meet the criteria specified above.

5. The following documentation will be contained in the participantrecord to verify C.I above:

A signed JTPA Placement and Retention Form (JTPA 519). Thisinformation will be verified by prior to payment.

D. RETENTION.

I. lhe full Retention Fee will be paid for each participant whomeet., the definition of Placement, above, and remains with theoriginal employer for 30 calendar days.

2. The full Retention Fee will be paid for each participant who:(a) meets the definition of Placement, above; (b) leaves the firstemployer; (c) is placed with a second employer; and (d) remainson the second job for 30 calendar days, provided, however, noRetention Fee will be paid if the second placement is in anoccupation which is different from that of the first placementand the wage paid is lower that that of the first placement.

3. The Contractor is not entitled to a Retention Fee which doesnot meet the definition above.

4. The following documentation will be contained in theparticipant record to verify D.1 or D.2 above:

A signed JTPA Placement and Retention Form (JTPA 519). Thisinformation will be verified by 4111ME1 IS prior to payment.

Performance-based Contract withMultiple, Clearly Defined PaymentBenchmarks

Palm Beach County Private IndustryCouncil, SONGS Delivery Area 22

West Palm Beach, Florida

AGREEMENT NO.:

MADE THIS DAY OF 1989 BY AND BETWEEN

PALM BEACH COUNTY PRIVATE INDUSTRY CJUNCIL, INC.

(hereinafter referred to as the "Private Industry Council")

and

(a not-for-prefit corporation organized under the laws of theState of Florida hereinafter referred to as the "ServiceProvider")

for the provision of services for and at the direction of the

Private Industry Council under the Job Training Partnership Act

(Public Law 97-300) ("JTPA" or the "Act"), in accordance with the

terms of this Agreement.

In consideration of the mutual covenants and benefits

hereinafter set forth, the parties hereto covenant and agree as

follows:

A. Me term of this Agreement shall be from

through

B. The Service Provider shall provide the services of

for ( ) residents of Palm Beach

County (SDA #22) eligible for services under JTPA, as described

in the Statement of Services to be Provided, attached hereto and

made a part hereof.

C. The Private Industry Council shall compensate the

Service Provider for services provided hereunder in an amount not

to exceed ($ . ) in

accordance with the Statement of Compensation for Services

Provided, attached hereto and made a part hereof.

D. This Agreement consists of the first sheet, this sheet,

the attached Statement of Services to be Provided, the attached

Statement of (7ompensation for Services Provided, the attached

General Provisions and Grievance Procedures, the attached copy of

the Job Training Partnership Act, and the attached copy of Part

II, Federal Register, February 12, 1988 (20 CFR Part 626 et

seq.).

IN WITNESS WHEREOF, the Private Industry Council and the

Service Provider have caused this Agreement to be duly executed

as of the date set forth above.

Approved by Private Industry Approved by Service ProviderCouncil

By BySignature Signature

Name and Title Name and Title

Witness Witness

SEAL SEAL

Approved as to form andlegal sufficiency

Legal Counsel

1 f

STATEMENT OF SERVICES TO BE PROVIDED

A. Statement Of Work

The Service Provider shall provide training to eliaible

participants under the Job Trainina Partnership Act leading to

placement in permanent unsubsidized employment in the

installation, maintenance and repair of telephone interconnect,

cable television, and fire and security alarm equipment. Such

training shall be provided through a Training Program providing

thirteen weeks of intensive clasgroom and laboratory training,

and preparing JTPA participants for an entry-level job as a

telecommunications technician. Emphasis shall be placed on

hands-on training, with approximately 70 percent of the training

time spent installing actual, current equipment. The training

will include an overview of an Introduction to

Telecommunications; Basic Electricity; Introduction to the

Telephone, Security Alarm and Cable Industries and Installation,

Equipment Testing and Troubleshooting. After completing the

training, a Placement Counselor will work to meet the established

goal for placing participants in unsubsidized c!mployment.

B. Trainina Proaram

1. Curriculum

The Training Program will feature a core

curriculum including a) basic electronics b) the installation,

testing and troubleshooting of 1A2 key telephone systems and

electronic key systems, c) installing, designating and modifying

Hi

station equipment, d) reading and usina schematics, e) modern

PBX theory and terminology and experience in programming via a

microcomputer cRT, f) proper use of tools, g) fundamentals of

soldering, h) proper tool/equipment use and safety rules, i)

installing and repair of security systems and j). CATV.

Instructional methods incorporate instructor-led lectures

and discussions, supportive text materials and handouts, and

simulated and actual equipment as relateu to the course

curriculums.

2. Outcomes

Upon successful completion of the Training Program

participants will be able to:

1. Demonstrate understanding of current, voltage

and resistance using Ohm's Law.

2. Identify resistor values using the color

code.

3. Terminate 25 pair cable and construct

amphenals.

4. Assemble, disassemble and repajr 6- ane 10-

button telepone sets.

5. Install and repair 1A2 key telephone systems

and ail basic features.

6. Demonstrate understanding of the oneration

and application of the Mitel SX-10 PBX

svstem.

2

7 .Install, troubleshoot and program the ITT-801

electronic phone system.

8. install, troubleshoot and repair the Teletec

zelf-contained telephone system.

9. Demonstrate understanding of the application

of safety requirements of and identify, basic

hand tools and power tnols.

10. Identify and demonstrate an understanding of

the construction cf various types of walls

and ceilings found in commercial buildings

and residences.

11. Demonstrate understanding of the theory and

application of C:ATV and make coaxial cable

connectors.

12. install, troubleshoot and repair single and

multizone security alarm systems.

13. Install and checkout: magnetic switches,

glass break sensors, ultrasonic detectors,

microwave detectors. passive infrared and

photoelectric beam detectors.

14. Draw basic plans for commercial and

residential security installation.

15. Install an RJ31-X alarm/phone interface.

16. Demonstrate understanding of the principles

of cicsed-circuit television and access

systems.

17. Tastall, troubleshoot and repair Class A and

3 fire alarm systems an-' associated

detectors.

18. Perform fundamental soldering tecaniques.

19. Formulate a resume based on self assessment.

20. Demonstrate knowledge of strategies for job

seeking and keeping.

The skills to be acquired in the Training Program

are set forth in further detail in the Schedule of Lectures and

Demonstrations set forth in Attachment A, attached hereto and

made a part hereof.

3. Course Organization

'The Training Program will include 435 hours of

classroom training over a period of thirteen weeks. Instruction

will include three (3) weeks of textbook instruction in

electronics, followed by ten (10) weeks of laboratory experience

in which participants will learn how to install and repair

various types of equipment used in the Liecurity alarm telephone,

cable TV, and security systems industries. Students enrolled in

the Training Program will attend classes from 8:30 a.m. to 430

p.m., five days a week. The Training Program shall be conducted

by the Service Provider at the training facilities designated

below, in three (3) cycles. Each cycle shall have a minimum

enrollment of seventeen and a maximum enrollment of thirty-t:Iree

11 4

participants.

N,7 participants may be enrolled in a cycle after the thirtieth

(30th) day of the beginning date of each cycle. No non-JTPA

participants shall be enrolled .Ln or attend the Training Program

except on tne prior approval of the Private Industry Council.

The cycles shall be conducted according to the following

schedule:

CYCLE BEGINNING DATE CCMPLETION DATr

1

3

July 11, 1988

October 24, 1938

February 20. 1989

Cctober 10,

January 31,

May 19, 1989

1988

1989

C. Placement in EmYlovment

The Service Provider shall provide services

designed to secure the placement of seventy-five percent (75%) of

the participants enrolled (but in no event less than forty-nine

(49) participants) in unsubsidized employment in the

occupation(s) for which training is provided hereunder, 1.ncluding

the identification and development of positions with employers in

the community, and counseling and assistance to participants in

applying for and securing, and maintaining such positions.

D. Staffina, Facilities, and Eauiyment

The Service Provider shall employ qualified staff,

and utilize adequate facilities and equipment. Such staff,

facilities and equipment shall not be less than as set forth in

the Statement of Staff, Facilities, and Equipment attacned hereto

as Attachment B and made a part hereof. Failure to adhere to

this Statement of Staff, Facilities and Equipment may result in

termination of this Agreement at the discretion of the Private

Industry Council.

E. Rece--al Criteria

The Service Provider shall consider for possible

enrollment in training under this Agreement individuals who have

been certified by the Private Industry Council as meeting the

applicable eligibility requirements of the Job Training

Partnership Act, and who meet tl,e following criteria:

1. Minimum of 13 years of age

Seventh grade reading level and mathematics

level as determined by a standardized TABE Test

administered

APTICOM Test

Council.

3. Ability to recognize colors

Dvorine Test of Color Vision

Service Provider.

4. Possess a normal degree of manual dexterity as

determined by the Purdue Pegboard of Manual

Dexterity test administered by the Service

Provider.

5. Lack :f f-hc ckills o be acquired in the Training

Program, and aptitude and desire for training dnd

by the Service Provider and/or

administered by the Private Industry

as determined by the

administered by the

employment, as determined bv the Service Provider

in a personal interview.

The Service Provider agrees tc refer to the

Private Industry Council any individuals recruited or referred

who are not selected by the Service Provider for participation in

the Training Program.

F. Recruitment

The Service Provider, in cooperation with the

Private Industry Council, shall engage in outreach to and

recruitment of eligible participants in the training to be

provided hereunder, sufficient to assure that an adecuate number

of participants are enrolled Eor the performance of such

training. Final responsibility for enrollment of sufficient

participants shall rest with the Service Provider.

G. Particitant Records

The Service Provider shall maintain individual

folders for each participant including the following documents:

1. JT2A Child Care Voucher (if applicable)

2. JTPA Grievance Procedures, signed by the

participant.

3. JTPA Referral Form (Attachment C)

4. Mid-term examination, signed by the

participant and ty the instructor.

3. Participant Mid-Point Evaluation Sheet.

6. Final e;aminaticn, signed by the participant

and by the instructor.

7. Participant Final Evaluation Sheet.

8. Other evaluation tools, if any.

, rerti'Ficate of Completion, signed bv the

Certifying Instructor.

LO. Notification of Termination or Training

Completion of Participant to School Board

Child Care Office (if applicable).

11. Certification of full-time employment

signed by the employer of the participant.

12. JTPA Notice of Child Care Services

Termination (if applicable).

H. Weekly Reporting

The Service Provider shall provide to the Private

Industry Council Contract Specialist on a weekly basis the

attendance roster (Attachment J1 of all participants who attended

class during the duration of this Agreement.

STATEMENT OF COMPENSATION FOR SERVICES PROVIDED

A. Unit Cost Maximum Amount Payable

The Private Industry Council shall compensate th.,

Service Provider tor services performed under this A.::reement in

the amount (hereinafter r,--F.-ed to as the "Unit Cost"; Of THRrv

THOUSAND THREE HUNDRED EIGHTY-SIX DOLLARS (53,386.00) for each

participant who has completed the Training Program and has been

placed in full-time employment as defined herein, subject to the

limitations set forth below, and provided, that the total

compensation budgeted to the Service Provider under this

Agreement shall not exceed the amount of THREE HUNDRED THIRTY-

FIVE THOUSAND TWO HUNDRED FOURTEEN DOLLARS (5335,214.00), and

provided further, that the duty of the Private Industry Council

to pay compensation under this Agreement shall be contingent upon

the prior obligation by the Private Industry Council of funds for

such compensation as hereinafter provided.

B. Earned Unit Costs

Such Unit costs shall be earned by the Service Provider

with respect to a participant in the following payment

increments:

1. Miduoint

A "Midpoint Payment" in the amount of EIGHT

HUNDRED THIRTY DOLLARS ($830.00), shall be earned upon enrollment

of a participant through the Midpoint date of a Training Program

and the participant's achievement of the Midpoint skills as

certified by the Service Provider on the Participant Mid-Point

Evaluation Sheet attached hereto as Attachment D and made a part

hereof. Midpoint payments shall be continaent upon the

submission by the cervice Provider of a Participant Summary

(Attachment E attached hereto and made a part hereof) listinc the

names and social security numbers of participants the Service

Provider attests have achieved the Midpoint skills, together with

a properly executed participant Mid-Point Evaluation Sheet for

each participant. The Mid-Poini Evaluation Sheet shall be

supported by a -Mid-Term Examination in the form attached hereto

as Attachment F and incorporated herein.

2. Trainina Completion

A "Training Completion Payment" in the amount of

EIGHT HUNDRED SEVENTY-SIX DOLLARS ($876.00), shall be earned upon

successful completion of the Training Program by a participant,

as certified by the Service Provider on the Participant Final

Evaluation Sheet attached hereto as Attachment G and made a part

hereof. For the purpose of this Agreement, a participant must

complete at least 319 hours of training in order to be considered

as having completed training. Training Completion Payments shall

be contin9ent upon the submission by the Service Provider of a

Participant Summary (attached hereto as Attachment E and made a

part hereof) listing the names and social security numbers of

participants the Service Provider attests have successfully

completed the Training Program, together with a properly executed

Participant Final Evaluation Sheet for each such participant and

a Certificate of Completion for each such participant, signed by

the Certifying Instructor fer the Training Prcgram. The Final

Evaluation Sheet shall be supported by a Final Examination in the

form attache,i hereto as Attachment H and incorporated herein.

3. Placement Payments

a. Full Placement Payments

A "Placement Payment" in the amount of ONE

THOUSAND SIX HUNDRED EIGHTY DOLLARS ($1,63C.30) shall te earned

upon placement of a participant in full-time, permanent,

training-related employment at an hourly wage of not less than

$4.50 per hour, as evidenced by a properly executed Employer

Verification Form attached hereto as Attachment I.

b. Bonus Payment

A "Bonus Payment" in the amount of FIVE

HUNDRED DOLLARS (S500.00) shall be earned by the Service Provider

for each participant so placed in excess of fifty (50)

placements.

c. Definition of Placement in Emlelovment

For the purposes of the Agreement:

1. "Placement" refers to placement in

employment commencing not later than

sixty (60) calendar days after the

participant's completion of training.

2. laEmplcyment refers to unsubsidized

employment.

3. "Permanent" refers to employment that is

retained for not less than thirty (30)

days and for wnich nc termination dace

has been established.

4. "Full-time" refers to employment at an

average of not less than thirty (30)

hours per week.

5. "Trainina-related" refers to employment

in positions as: a Instrument Repairer

(722.281-010), Assembior (Tel & Tel)

(722.381-010), Electronics Assembler,

Developmental (726.261-010), Electronics

Tester I Technician (726.281-014),

Electronics

Electronics

Production

Utility Worker (726.361-010),

Inspector I (726.381-010),

Repairer (electronics)

(726.381-014), Electronics Assembler

(inst. & app.) (726.384-010), Electronics

Assembler (electronics) (726.684-018),

Electronics Inspector (electronics) II

(726.684-022), Electronics Tester

(electronics) II (726.684-026), Cable

Maker (electronics) (728.684-010), Wirer,

Cable lelec. equip.) (729.331-022),

Eloc.:rical Control Assembler (729.684-

026), Assembler, E1,--trical Accessories

(729.687-010), Community-Antenna-

Television Line Technician (321.261-010),

Line Maintenance (821.261-014),

Television-Cable Installer (821.281-010),

Cable Installer Repairer (821.361-010),

Central Office Repairer (822.281-014),

Maintenance Mechanic, Telephone (822.281-

018), Private Branch Exchange Repairer

(822.281-022), Cable Tester (Tel & Tel)

(822.361-010), Central Office Installer

(Tel & Tel) (822.361-014), Protective

Signal Installer (822.361-018),

Protective Signal Repairer (822.361-022),

Line Installer-Repairer (Tel & Tel)

(822.381-014), Private Branch .:lange

(PBX) Installer (822.381-018), Protective

Signal Installer - Helper (822.664-010),

Protective Signal Repairer - Helper

1(822.684 J14), Sound Technician, Intercom

Helper (829.281-022), Cable Splicer

(829.361-010) ,Cable Splicer Helper

(829.667-010), Electrician Helper

(329.684-022). Protective Signal Operator

(379.362-014) and other positions that

substantially utilize the skills acquir2d

in the Training Program conducted under

this Agreement, as determined by the

Private Industry Council in its sole

discretion.

The Private Industry Council shall determine

whether a placement constitutes employment within the meaning of

the terms of this Agreement as defined herein.

4. Limitations on Payments

Notwithstanding any other provis xi hereof,

compensation for services under this Agreement shall be subject

to the following limitations:

a. Reduction for Late Placement

The amount of the Placement Payment under

Paragraph 3 (a) shall be reduced by five (5) percent for any

placement in employment commencing on the thirty-first (31st)

through the thirty-seventh (37th) day following the ending date

of the participant's Training Program, by ten, (10) percent for

any placement in employment commencing on thirty-eighth (38th)

through the forty-fourth (44th) day following the ending date of

the participant's Training Program, bv fifteen (15) percent for

any placement in employment commencing on the forty-fifth (45th)

through the fifty-first (51st) day following the ending date of

24

the participant's Trainina Program, and by twenty (201 percent

for any placement in employment ccmmencina on the fifty-second

Y52nd) through the sixtieth i6Gth) day following the endina date

of the participant's Training Program.

b. Cbl4aation/Availabilit-7 of Funds

The Private Industry Council shall obligate

the amount of ONE HUNDRED ELEVEN THOUSAND SEVEN HUNDRED THIRTY-

EIGHT DOLLARS (S11l,738.00) for each of the three cycles provided

herein cn the following dates: Cycle I. June 12, l983; C7cle II,

September 24, 192E; Cyc',, III, January 21, 1229, utilizing the

Statement of Obligations attached hereto as Attachment K. Each

such obligation shall te subject to a determination by the

Private Industry Council that sufficient funds will be available

within the Private Industry Council's budget. Should the Private

Industry Council determine that sufficient funds are not

available for a scheduled obligation, the Private Industry

Council will provide reasonable advance notice to the Service

Provider, and the Service Provider may, at its option, terminate

this Aareement or renegotiate its terms.

c. Invoice Deadline/Decblioation

The Private Industry Council shall pay only

such invoices for earned unit costs as are received within thirty

(30) calendar days of the date such unit costs were earned,

together with documentation as required herein and validated as

payable, rrovide'd, that the Private Industry Council will make no

payments cf invoices for payment increments received after the

following dates:

CYcle

1

2

Pavment Increment Invcice

Mid-Point September 21, 1983Completion November 9, 1933Placement February 7, 1939

id-Point JanuarY 4, 1989Completion Marcn 2, 1989Placement May 31, 1939

Mid-Point April 30, 1989Completion June 19, 1989Placement September 18, 1989

After each sucn invoice deadline, the Private

Industry Council will unilaterally deobligate all funds for such

payment increments for which invoices have not been received. In

addition the Private Industry Council will deobligate funds

unavailable for compensation due to the lack of enrollments

projected per cycle.

d. Pell Grant and SECG Payments

Notwithstanding any provision of this

Agreement to the contrary, no compensation shall be earned or

payable for services provided under this Agreement to che extent

that any such services are paid fcr, directly or indirectly,

through a Pell Grant or Supplemental Educational Opportunity

(SEOG) Grant. The Service Provider shall take sufficient actions

to assure that services paid for through such grants are not paid

for under this Agreement (including the reduction of invoices to

the extent of such grant pavme:,ts, the return of any funds paid

t2f;

hereunder for services paid for thrcuch such crants, and any

other actions as may be recIuired by the Private Industrv

Council).

U.S.CUVERMMENT PRIJOING Orr ICE 119139-20-00$10557S

ed 328 789 ce 057 010 · portfolio consisting of jtpa and related grant funds; and if they are able...

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