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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
  • 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$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
  • 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
  • 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
  • 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
  • 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
  • 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
NYC CONTRACT PAYMENTS
  • 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 City Index Scores

May - December, 2000

Significant Achievements

Progressive improvement in overall Center performance

nyc employment gains
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
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.
pricing placements
Pricing placements

Vendor cost per job

Contract $$ per placement

0

Job Seekers

contract price comparison
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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