Increasing employment outcomes using performance management incentives
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INCREASING EMPLOYMENT OUTCOMES USING PERFORMANCE MANAGEMENT INCENTIVES. Jason A. Turner Practical Government Solutions Milwaukee Wisconsin USA Former Commissioner, New York City Human Services Agency; 1998 - 2002. WELFARE SITUATION 1964 - 1993.

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Increasing employment outcomes using performance management incentives
INCREASING EMPLOYMENT OUTCOMES USING PERFORMANCE MANAGEMENT INCENTIVES

Jason A. Turner

Practical Government Solutions

Milwaukee Wisconsin USA

Former Commissioner, New York City Human Services Agency; 1998 - 2002


Welfare situation 1964 1993
WELFARE SITUATION 1964 - 1993 INCENTIVES

  • Continuous increase in welfare dependency in good economy and bad.

  • All efforts to increase employment outcomes had failed to result in significantpositive 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
USUAL JOB TRAINING IMPACTS INCENTIVES$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
WISCONSIN MAJOR FEATURES INCENTIVES

  • POLICY

    Welfare benefits paid only after work activity

  • MANAGEMENT

    Fully privatized with companies at financial risk

  • PERFORMANCE INCENTIVE

    Private companies earn money through reduced government costs resulting from employment.


Contract provisions
Contract provisions INCENTIVES

  • 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
PROCESS CHANGES BY VENDORS INCENTIVES

  • 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
EMPLOYMENT TWO YEARS LATER INCENTIVES

  • 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
NEW YORK CITY INCENTIVES

  • 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.


Compare
Compare INCENTIVES


Nyc contract payments
NYC CONTRACT PAYMENTS INCENTIVES

  • Create Employment Plan $250

  • Place in job and keep 30 days 1500

  • Still employed at 90 days 1500

  • Still employed at 180 days 1250

  • Bonus for case closing and wage gains

    MAXIMUM TOTAL $5500


Significant achievements

JobStat INCENTIVES City Index Scores

May - December, 2000

Significant Achievements

Progressive improvement in overall Center performance


Nyc employment gains
NYC EMPLOYMENT GAINS INCENTIVES

  • 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
UNITED KINGDOM INCENTIVES

  • 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.



Pricing placements
Pricing placements INCENTIVES

Vendor cost per job

Contract $$ per placement

0

Job Seekers



Contract price comparison
CONTRACT PRICE COMPARISON INCENTIVES

UK BEFORE NEW PROGRAM

  • ACTUAL COST PER PERSON PLACED

    - - $48,600

    NY CITY CONTRACT MAXIMUM PER PLACEMENT

    - - $5500

    UK NEW PROGRAM CONTRACT MAXIMUM

    - - $4480

    UK LOWEST VENDOR CONTRACT BID FOR PLACEMENT

    - - $2300


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