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INCREASING EMPLOYMENT OUTCOMES USING PERFORMANCE MANAGEMENT
INCENTIVES
Jason A. TurnerPractical Government Solutions
Milwaukee Wisconsin USA
Former Commissioner, New York City Human Services Agency; 1998 - 2002
WELFARE SITUATION 1964 - 1993
Continuous increase in welfare dependency in good economy and bad.
All efforts to increase employment outcomes had failed to result in significant positive change.
National employment program 1989, coincided with increase in welfare caseload by one-third a few years after introduction.
USUAL JOB TRAINING IMPACTS$10 BILLION ANNUALLY
Wages 2 ½ years after:
Men + 5%Women +10%Youth – female +1%Youth - male - 4%Youth - male, crime - 22%
WISCONSIN MAJOR FEATURES
POLICYWelfare benefits paid only after work activity
MANAGEMENT Fully privatized with companies at financial risk
PERFORMANCE INCENTIVEPrivate companies earn money through
reduced government costs resulting from employment.
Contract provisions Vendors paid only from benefit savings
- Vendor earns first 7% of all government benefit savings resulting from welfare case reductions
Additional benefit savings: - Vendor retains 10% - 45% to state government - 45% to local government
PROCESS CHANGES BY VENDORS Critical attention to important outcomes,
including caseload and employment. Managers paid on performance basis. Staff changes from social workers to business
representatives. Increased salaries for line staff.
PROCESS CHANGES BY STATE AGENCY Relaxation of process rules to vendors. Attention focused on support services for
employment
EMPLOYMENT TWO YEARS LATER
Total welfare cases at start 39,000 - 100%
Closed because of earnings 24,300 - 62%
WELFARE DEPENDENCY AFTER 3 YEARS Statewide caseload before 55,000 After 11,000
POVERTY DECLINE AFTER FIRST YEAR Milwaukee child poverty 26% to 20%
NEW YORK CITY
Over 100 employment and training vendors Vendors paid on cost plus basis Central office had little influence on local
operations (communication by mail). Agency did not track employment status of
recipients. Bureaucratic culture Agency lacked a program mission and reward
system.
NYC CONTRACT PAYMENTS
1. Create Employment Plan $2502. Place in job and keep 30 days 15003. Still employed at 90 days 15004. Still employed at 180 days 12505. Bonus for case closing and wage gains
MAXIMUM TOTAL $5500
Significant Achievements
Progressive improvement
in overall Center
performance13.4
17.521.1 20.8
31.6
22.2
35.2
44.6
13.4
15.3
15.6
16.7
18.8
19.2
21.2
23.4
-5
5
15
25
35
45
55
May June July August September October November December
JobStat City Index Scores
May - December, 2000
NYC EMPLOYMENT GAINS
First full year after change:
2 X more job placements 1/3 lower expenditures to government Weak vendors dropped out of program voluntarily
Working in the private economy - - Mothers without High School degree:
Working 1995: 16%Working 2001: 44%
UNITED KINGDOM
New Labor Blair government, 1997, changed orientation in favor of work-first employment policy influenced in part by US experience.
Employment efforts over ten years yield minimal results.
Blair government hires David Freud to write white paper exploring changes, 2007.
Labor government introduces partial performance payments, 2009.
Conservative government combines elements of Wisconsin and NYC performance incentives, 2011.