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


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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

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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

  • 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

Wages 2 ½ years after:

Men + 5%

Women +10%

Youth – female+1%

Youth - male- 4%

Youth - male, crime - 22%


WISCONSIN MAJOR FEATURES

  • 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

  • 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 earnings24,300 - 62%

    WELFARE DEPENDENCY AFTER 3 YEARS

  • Statewide caseload before55,000

  • After11,000

    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.


Compare


NYC CONTRACT PAYMENTS

  • Create Employment Plan $250

  • Place in job and keep 30 days 1500

  • Still employed at 90 days1500

  • Still employed at 180 days1250

  • Bonus for case closing and wage gains

    MAXIMUM TOTAL $5500


JobStat City Index Scores

May - December, 2000

Significant Achievements

Progressive improvement in overall Center performance


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.


UK Performance Payments


Pricing placements

Vendor cost per job

Contract $$ per placement

0

Job Seekers


Performance payments by category


CONTRACT PRICE COMPARISON

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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