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Voices from the middle: how performance funding impacts workforce organizations, professionals and customers.

Under recent policy reforms, the landscape of authority relations in welfare and workforce development organizations has radically changed from one that privileged internal professional autonomy to one that privileges external authorities. Performance, rather than input funding is the medium for this change. Longitudinal ethnographic research reveals that performance requirements in workforce development both contribute to and challenge organizational structure and program design, professional practices, and job seeker outcomes. As such, when the "voices" of job-seeking customers, directly and through their affiliated workforce organizations, professionals, and employers, are added to the "voices" of funders under performance funding, polyvocality may result in more consensual authority relations: in particular, less autonomous power for professionals, less program hegemony for funders, and greater power for job seekers over their futures. These findings may also pertain to organizations and professionals funded under other performance directives, such as managed care and welfare-to-work.

Key words: workforce development, performance funding, authority relations, professionalism, ethnography


Recent policy reforms have radically changed the landscape of authority relations in workforce development and welfare organizations from one that privileged internal professional autonomy to one that privileges external stakeholders. Performance, rather than input, funding is the medium for this change. Under the Workforce Investment Act of 1998 (WIA), allocation of workforce development funds is increasingly based on rates of placement and retention (1) in the workplace (Danziger & Haveman, 2001; Plastrik & Taylor, 2001). WIA mandates seventeen different performance measures for the overall system (Buck, 2002). Similarly, funding for welfare-to-work programs under Temporary Assistance for Needy Families (TANF) is increasingly associated with placement and retention outcomes (Iversen, 2000; Murphy, Fishman & Barnow, 1999). Over this same period, the Government Performance and Results Act of 1993 required federal agencies to be accountable for outcome standards in what amounts to performance-based budgeting (Williams, Webb & Phillips, 1996, p. iii). Foundations, corporations, and other funders of nonprofit and proprietary organizations followed suit.

Before 1990, funding for most social service and workforce development organizations was tied to the designs and processes of their individual, generally independent programs. Such organizations were only held accountable for their "input," which essentially meant their procedures or units of service delivery (Frumkin, 2002). Under input funding, professional autonomy was paramount. Professionals, in the form of management or staff, defined and controlled client definition and recruitment. Professionals determined program and client goals and objectives. Professionals defined the scope and substance of the interventions, measurement procedures, and target outcomes. Evaluation generally consisted of an "audit function" (Williams, Webb & Phillips, 1996): namely, tallying numbers of clients served and asking professionals whether they did what they said they were going to do. As Williams, Webb and Phillips (1996) note, the public-sector preoccupation with procedures runs deep (p. v). A similar preoccupation has held sway in private sector organizations (Letts, Ryan & Grossman, 1999). In essence, professionals have been the authoritative "voice" in workforce service provision.

In contrast, under performance funding, administrative and staff professionals are held accountable for customer outcomes. Because workforce development organizations are increasingly dependent on outside funding sources for their existence, professionals no longer have complete autonomy over their functions. Public and philanthropic funding sources now define the "customer," set performance targets and required outcomes, specify measurement techniques to evaluate these targets and outcomes, and have the authority to withhold funds until requirements are met. In contrast to the past, when funding and professional procedures occupied separate spheres, the funding organization now may be the authoritative voice in structuring professional workforce services.

In this paper, workforce development is viewed as "the policies, programs, and supports that can enable low-income people to succeed in navigating an increasingly complex labor market (Elliott, 2002, p. 1). Essentially, the goal of workforce development is to redistribute jobs, earnings, work experience, and dignity to the residents of low-income communities (Harrison & Weiss, 1998). Historically, workforce organizations offered education and training, but little or no support for placement, retention, and advancement in jobs (Danziger & Haveman, 2001; Gueron & Pauly, 1991). In contrast, human service organizations traditionally delivered supports, but not education or training. Not only were the professionals in each relatively autonomous, the organizations functioned in silos as well. While this examination focuses on workforce development, there may be significant parallels with social service organizations, especially those funded under the guidelines of managed care or welfare-to-work policies. An early model outlining the interaction of multiple stakeholders in human service organizations suggests such parallels (Martin, 1980).

Ultimately, how workforce organizations respond to new performance mandates has implications for their survival and for the employment success of many low-income workers and family heads. If flexibility and innovation--historic strengths of non-profit organizations--are maximized under performance funding, workforce organizations may be able to increase capacity and impact for job seeking customers (Grote, 2003). Conversely, if performance funding strains management and staff beyond capacity, organizations may reduce services or close and employment opportunities for low-income workers may be reduced. This paper explores how multiple stakeholders in workforce development respond to performance funding mandates.

Framework and Argument

This exploration of workforce development and performance funding is lodged in sociological concepts of authority and voice. James Coleman (1990) defines authority as "the right to control another's actions" (p. 66) and posits that when actions, rather than goods, are the subject of exchange, an authority relation may develop whereby one actor gives up rights to control his/her actions to another (Coleman, 1990). While Coleman (1990) notes that authority relations need not be conflictual or coercive, and in their most benign form are oriented to mutual gain, I argue that consensual authority relations offer the possibility of reducing power differentials that commonly exist under hierarchical relations. In this paper, power is signified by "voice."

Issues of authority and voice are lodged more broadly here in the context of professionalism. Despite the lack of a definitive definition of "profession," professionals have characteristically claimed the right to a high degree of autonomy, established and sustained by privileged, if not monopolistic, practices and exclusionary regulatory mechanisms (Larson, 1977; Macdonald, 1995). The current climate of accountability gives funding sources new power in the professional sphere. Just as managed care, in the form of federal or state determination of service parameters, has deeply changed the practice landscape for professionals in social and health services, performance funding requirements, from both public and philanthropic sources, now impact workforce development professionals.

This paper explores two questions: First, whose voices are heard in workforce development under performance funding mandates? Those of the workforce organizations, represented here through the voices of administrators and staff professionals? Those of public or philanthropic funders, denoted here through performance requirements? Or the voices in the middle, those of economically disadvantaged (2) job-seeking customers? Second, to what end? How do new authority relations under performance funding impact workforce organizations, professionals, and job seekers, from their perspectives?

The Context

Despite the economic boom in the 1990s, improvements in workforce development were much needed. Results from evaluations of workforce programs before TANF and WIA had been equivocal about program effectiveness (Friedlander & Burtless, 1995; Mathur, 2002; Smith et al., 2002), increased numbers of children of working parents remained poor (City Kids Count, 2001; National Center for Children's Poverty, 2001), and employment chances remained unequal for Blacks compared to whites and Hispanics (Holzer & Offner, 2001; Moss & Tilly, 2001). In response, the Annie E. Casey Foundation, a national philanthropic organization dedicated to child well-being, mounted an 8-year, multicity workforce demonstration program called the Jobs Initiative with the goal of improving labor market opportunity for economically disadvantaged residents of impoverished inner cities across America. The initiative's "social investor" approach (Giloth, 1995) and results-focused funding design were the foundation's effort to improve upon the limited impacts of the earlier programs, based on the success of alternative models such as STRIVE (Harrison, 1995), Project QUEST (Osterman, 2001), Center for Employment Training (Harrison & Weiss, 1998; Melendez, 1996); New Hope (Bos et al., 1999; Huston et al., 2003), and selected others across the country (Giloth & Phillips, 2000; U.S. Department of Labor, 1994). At the same time, the tight labor market meant a window of opportunity for women leaving welfare and other economically disadvantaged unemployed or under-employed workers, as many firms desperately needed skilled and semi-skilled workers (Giloth, 1998). The demonstration program thus provides a platform for this exploration of authority and voice in workforce development under performance funding.

In this context, required performance outcomes included expanded organizational capacity, greater impact of professional services, as demonstrated by increased rates of job placement and retention, and "good jobs" for job seekers, defined as wages of $7 per hour or higher, in 1995 dollars, plus nonwage benefits and advancement opportunity. We note, however, that the parameters for "good jobs" were set in the mid- to late-1990s when the economy was thriving; in fact, the average wage of the nearly 6000 Jobs Initiative placements in that period was $9.13 per hour (Fleischer, 2001). In the current environment of economic downturn, a more difficult labor market faces job seekers and workforce organizations, as some of the voices in this paper reflect. As such, 'lessons learned' from this exploration may be increasingly important to organizations, job seekers and funders alike.

Structurally, a core "development intermediary" was located or formed in five cities (Milwaukee, Philadelphia, New Orleans, St. Louis, and Seattle) that contracted with or developed provider organizations to craft community solutions to persistent inner-city unemployment. These intermediaries included a nonprofit investment vehicle comprised of labor, management, and research; a new nonprofit civic organization; a regional investment fund; a regional council of governments; and a municipal agency (Hebert et al., 2002). The provider organizations were generally either industry oriented or community-based nonprofit and for-profit facilities. All offered job readiness training, skill training, and support and retention services, in varying proportions and degrees. In addition, the organizations were required to develop new partnerships, often with employers, which was a missing component in most earlier job training programs (Osterman, 1999). The foundation directed funds to the provider organizations through the intermediaries. Funds were linked to each intermediary's quarterly outcome targets for recruitment, training, job placement and job retention, both overall and by provider affiliate (Fleischer, 2001). Often, however, foundation funds were only one source of income for provider organizations.

Under independent grants from the foundation, I directed and led an ethnographic team that studied parents' work and children's welfare in the context of these regional workforce organizations, professionals, job seekers and employers (Iversen, 2002). My team of nine researchers had regular contact with twenty-five Jobs Initiative families in the five cities from January 2000 to June 2003 and with about 1000 auxiliary sources identified as important to the families' work and home lives. Augmented by administrative and retrospective data, the data set covers up to five years of information about families' advancement efforts and the workforce organizations with which they were associated. Ethnographic research methods were ideal for eliciting rich details (Denzin & Lincoln, 2000) about how multiple stakeholders fared in the context of new policies and programs. A 'dialogical' approach to research (Ostrander, 1995) involved regular and formal feedback to and from all key informants through written and verbal means throughout the research period. Triangulation of researchers, respondents, and analysts afforded a wide-angle lens on performance funding and increased the reliability of the data and validity of the findings. A qualitative software program was used for data management and code-based case construction from the audiotaped and transcribed field material. Names of all persons and organizations, with the exception of the foundation, have been disguised to protect their identities. Moreover, the perspectives expressed through each "voice" emerged repeatedly during the analytic process, irrespective of the individual characteristics of city, workforce organization, professional, job seeker or firm.


The "voices" of the Jobs Initiative stakeholders suggest that performance funding both benefited and challenged workforce organizations, professionals, and job seekers. The first section addresses structural issues and program content in the workforce organizations under performance funding, primarily from the perspectives of intermediary and provider administrators and staff professionals, amplified by the parallel experiences of their job seeking customers. Employers' voices are also interspersed. The second section addresses the roles and functions of the professional service providers, whose voices are also amplified by the perspectives of job seekers. Each section is roughly organized according to "benefits" and "challenges," although overlap is also illustrated.

How Performance Funding Benefited Organizations

Increased Data Capacity. Structurally, the philanthropic funder required that all organizations establish management information systems (MIS) in order to increase their capacity to collect and use data (Dewar, 2002; Gewirtz & Harrington, 2000). Both providers and intermediaries reported that increased use of MIS data contributed to more efficient staffing, whether 'up' or 'down:'
 "We just hired a new person. What we know now about our graduates
 is largely anecdotal. We're working on education (and other)
 outcomes; our aim is to establish larger outcome domains." [Chief
 Operating Officer, nonprofit community-based provider]

 "I was not aware of the depth of the organization's problems when
 I took this job ... especially the absence of matching funds. I
 inherited a staff of 22; we are now 13. The ones that left could
 not produce results." [Chief Executive Officer, development

To a one, job seekers stressed that effective staffing was important to their job outcomes, as the comments of this customer, a single mother of two with a history of temporary jobs, exemplify:
 "I really miss [Job Coach] from the healthcare training program. She
 was really an inspiration to me, a young black women doing the 'do'
 as we Ebonically say ... It's just that she has so much confidence,
 she looks good, she sounds good, and she is so successful. And she
 don't mind helping someone who wants to help themselves ... At
 times she would come pick me up and take me to work, and come
 get me from work. All that helped so much ... I needed to get my
 confidence back ... to show I am one that is just going to keep at
 it." [Loretta Lopez, customer of healthcare training provider]

New MIS capacity also enhanced the organizations' ability to market their programs, as this exchange between an intermediary CEO and his Board member typifies:
 "The monthly report is a sign of how much clearer we are." [Chief
 Executive Officer, development intermediary]

 "The finance committee now has schedules we're comfortable getting
 every month. This is a great relief. It makes our sales job so much
 easier to have data." [Board Member, development intermediary]

In the best of circumstances, organizations used data and other performance requirements to forward their mission of serving the "hard to serve," as these intermediary and community executives communicated to provider applicants at a proposal information session:
 "We are looking to find a different way to pay for milestones and
 recruitment without hurting the agencies. Our intent is not to
 jeopardize your cash flow. The heavy emphasis on retention has been
 hurting cash flow." [Director, development intermediary]

 "We need to make sure agencies are not penalized by serving the
 hard-to-serve." [Community consultant to the development

Increased Partnership Capacity. Structural changes in the form of required new inter-organizational partnerships also increased capacity. Because workforce organizations were responsible for specific rates of placement and retention, they found that collaborating with employers and other workforce providers helped job seekers get and keep jobs, as the comments of this administrator and staff professional illustrate:
 "Potential participants come to an orientation to hear about jobs
 and training in manufacturing and assess the fit. We have employers,
 unions, technical college and PIC [Private Industry Council] people
 who do eligibility screening on the spot." [Director, manufacturing
 training provider]

 "I problem-solve with co-workers and supervisors at the provider
 organization. I call employers too. In a recent example, we had a
 conference between the employer, client, PIC, and me. In another,
 I conferred with the employer, the client, and staff at the
 intermediary. The employer wants the worker to stay. We worked to
 problem-solve how this could occur. The group meetings facilitate
 feedback and help the new worker stay employed." [Professional
 community-based provider]

Job seekers, such as former felon and parent of three, Kevin McDonalds, underscored that their training provider's partnerships were critical to their employment outcomes:
 "I was in a plumbing course before [training provider]. If there had
 been more help job searching, like this program, it would have been
 a nice program. I didn't know what I was looking for. I didn't have
 my driver's license. I was a felon, and that was looked at not
 positively. I was into the program, the classes, and figured they'd
 help find me a job. I was thrown for a loop when they didn't. If
 people would have cut the yellow tape--sent us to meet Bob, Joe,
 and Lou--it would have helped. Like this program did." [Kevin
 McDonalds, job-seeking customer of printing training provider]

Employers also identified ways that new partnerships with workforce organizations benefited them, as this manufacturing firm manager outlined:
 "What we were doing was we worked with a technical school in
 the city here, we worked with the manufacturing training provider
 there, and we started to get 'outside the box.' We had to find out
 what was out there if we were going to succeed. We found that as we
 were working with various educational and training agencies, we were
 introduced into the state's work development program. I mean this
 stuff all of a sudden was just snowballing and we said, 'My gosh,
 wake up, you might as well take advantage of this stuff here' ...
 because we wanted workers." [Operations Manager, manufacturing
 firm that hired graduates of a manufacturing training provider]

Program Improvement and Innovation. In the content arena, new data collection and reporting systems informed organizations about which workforce programs or program characteristics to retain or drop (Dewar, 2002). One intermediary director described funding-driven changes in a provider's business skills program that were typical of many others' experiences:
 "It's changed over time and greatly improved. There's room for a lot
 more improvement. I've worked in many projects in many different
 roles--I have to admit that one "plus" in the Jobs Initiative is
 there have been changes made when changes need to happen. The
 organization is responsive to change especially small changes. But
 it's difficult to make monumental change. For example the business
 project is trying to structure more hard skills training into its
 retention activities, such as classes in web design. We know people
 want more computer training." [Director, development intermediary]

Similarly, and more rapidly in the context of philanthropic than public funding requirements, as provider organizations evaluated unsatisfactory rates of retention and gained experience with the needs of their job-seeking customers, they added content to their pre-employment programs to benefit job seeking customers, as this program manager emphasized:
 "We tell participants about income disregard, EITC, TANF cut-off.
 We do a lot of advising--one woman had 6 children and was using
 up her lifetime eligibility. We gave her some hints about how to
 save some of it." [Manager, healthcare training provider]

Although direct causality between program component and retention cannot be ascertained, the twelve-month retention rate of this healthcare provider was twice as high as that of healthcare programs overall in the initiative (Hebert, St. George & Epstein, 2003).

Innovative program changes also took place in the context of mandated new relationships between provider organizations and employers, as this provider manager and participating employer described:
 "Company turnover is employers' concern. What to do to change
 that? We instituted the role of workplace mentor together with
 management and the union, for everyone [not just Jobs Initiative
 workers]. When I first set up the programs in manufacturing,
 employers expected five to seven to turn up for mentor training--30
 to 60 did! The company did a cost-benefit analysis and it saved
 $2000 in reduced turnover because of the mentor program. The key to
 retention is building the environment in the facility, whether
 factory, shop floor, or hotel. If you bring together varied
 individuals, you get better system communication and recognition by
 incumbent workers that you hope leads to more training, more
 education, and better needs assessment." [Manager, manufacturing
 training provider]

 "[Have things changed at the plant as a result of the mentor
 program?] I think people are more relaxed ... The feedback that we
 are getting is that it has been very beneficial to them [new
 workers] ... Early indicators are that it is working ... We have had
 feedback from other companies, saying, 'How can we get involved in
 it?'" [Operations Manager, manufacturing firm partner of a
 manufacturing training provider]

How Performance Funding Challenged Organizations

Strained Staff Capacity. Workforce development organizations commonly function on a financial "shoe-string," especially those serving low-income customers, and thus rely on dedicated professional staff to work 'above and beyond' on behalf of customers' goals (Frumkin & Andre-Clark, 1999). In this study, the technical demands of the new management information systems and extensive data collection requirements, together with the requirement to develop new partnerships with employers, strained staff capacity and may have increased turnover, as this staff professional described:
 "The whole process is a juggling act ... recruitment, funding,
 proposals, monitoring, case management, retention ... We've had
 a lot of line workers leave in the past six to eight months. That
 impacts the success of the program since our work is all about
 relationships. If a worker is only there eight months, no
 relationship can build. We've done two and one-half years of
 relationship building. Only now are some of these meaningful
 relationships. The policy of collaboration may be in place, but
 without the relationships, the communication that greases the
 wheels of actual working together falters." [Retention Counselor,
 printing training provider serving Kevin McDonalds]

Staff turnover, in turn, daunted the confidence of new workers, as this customer's sentiments typify:
 "When I learned that Retention Counselor was gone, I was shocked!
 She was the one that really got me motivated and started. She really
 put me out there. I hated it when she left. Seeing her and talking
 to her kept me motivated and uplifted." [Kevin McDonalds,
 job-seeking customer of a printing training provider]

Had Kevin's retention counselor remained at the training provider, she might have been able to help him navigate a complicated work-family situation that resulted in his dismissal from a job he had successfully held for 18 months, as he reported:
 "I'm not working at Bindery any longer. I don't like playing the
 race card, but in reality, that's what it was. It was my fault also.
 I missed the days. I had signed up for overtime months earlier, but
 when I checked the schedule, I didn't see my name. I'd signed up
 for every weekend for months in a row. I was there over a year and
 some months and I never did a no-show. Others were given a second
 chance. There was a guy there--he and I were 'into it.' His father
 had worked there before him, and when he was a kid, he worked at
 the company. I'd gone down south earlier to see my father; he was
 sick. They didn't want me to go--put me through an ordeal. When
 I missed the overtime, that gave them the opportunity to get rid of
 me." [Kevin McDonalds, job-seeking customer of printing training

Reduced Customer Service. Provider administrators also feared that pressure to meet payment points and outcome goals would lead to staff burnout and reduced customer service. For example, four years into the demonstration, the technical capacity of some community-based organizations remained limited, thus extra 'person power' was needed. Typically, only one staff member could be spared for the task of reporting retention outcomes of program completers. At the same time, increasing numbers of completers needed to be tracked, followed-up, and sometimes re-served. Others echoed this manager's report that overload led to a reduction in essential customer retention services:
 [Who does retention?] "I do. Every three months I try to contact
 them personally. But this usually means phone calls where I often
 just have to leave a message, or a follow-up letter. Some placements
 come by to report in to me." [Manager, construction training

Job seekers also reflected this organizational challenge, as these graduate's comments illustrate:
 "They were supposed to have an after-care program to deal with
 the graduates. I haven't heard from anyone there in 3 months. I told
 them I was on a temp job. I didn't hear anything else from them.
 The after-care program needs to be more intense. Really and truly.
 I'd like them to ... call us up and find out what's going on. Find
 out any support we need--like childcare. Help us get what we need
 from employers--especially financially." [Ayesha Muhammad, job
 seeker graduate of community-based provider]

Applicant Selectivity or "Creaming." Other administrators predicted that strained organizational capacity would lead to applicant "creaming," whereby only those perceived likely to be successful would be accepted into the program. In several instances, the need to meet payment points reduced "potentials," who might have benefited from the workforce program's extensive services, to "rejects," as this manager outlined:
 "I tell them [applicants] to come to the project at 7am and have
 them volunteer here for several days--shovel snow, stuff envelopes,
 etc. If they show up at 8:30, they're out. They have to demonstrate
 dependability before I'll try to help them. This rules out about
 80%." [Manager, construction training provider]

Weak retention outcomes revealed by data collection and reporting systems led to formal restructuring of the recruitment base in other provider organizations. While higher rates of retention resulted from such changes, the authoritative voice of the funder via the intermediary--per design or interpretation-eclipsed the provider's voice, as this manager's comments typified:
 "Our placement focus used to be 30% directly into jobs and 70% into
 skills training. Now with new funding directives it will be 70%/30%.
 Much of the direct placement will be in dietary and housekeeping
 jobs where there is on-the-job training. The tone now is moving away
 from a "career" concept because we will place less emphasis on
 CNA (Certified Nursing Assistant) training and more emphasis on
 direct placement. The intermediary is concerned that CNA training
 is not cost-effective; it's not meeting the healthcare network needs.
 The emphasis on numbers compromises the training piece. But 90-95%
 of the entire base is welfare recipients--you can't "direct place"
 them. [Manager, healthcare training provider serving job seeker
 Loretta Lopez]

Such data-and funder-driven decisions about customer recruitment made leaner programs available to job seekers, but limited organizations' ability to satisfy the performance requirement of "good job" placements at the same time. Job seekers were diverted into alternative and less lucrative employment paths that ran counter to their career goals, as Loretta Lopez, 29-year old single mother of two pre-school aged children, illustrated in response to her provider's suggestion that she consider a dietary or housekeeping position:
 "Since I had my [medical assistance] certificate [from a previous
 program] ... I am focusing on getting a job in the medical field. I
 want a job at a medical call center, if possible." [Loretta Lopez,
 job seeker at healthcare training provider]

In order to attract matching funds, another performance requirement, and strengthen employers' desire for program graduates, provider administrators occasionally rationalized that selectivity, or "creaming," was necessary to sustain both program and organization:
 "Employers told us they were more interested in quality than
 quantity." "We've done a lot of work to strengthen our assessment
 process--hard-nosed testing for skills and career choice." [Director
 and Retention Counselor, customer service training provider]

 "What's central to our success is placing successful individuals in
 jobs. Some of our success is due to the placements. I want to make
 sure that they [employers] want more of my people. It opens up
 more doors for others if they are successful. What makes it easy is
 to send out a good worker." [Manager, construction training

Most often, however, training providers absorbed the extra demands imposed by reporting and retention expectations without limiting customer access.

Unrealistic Definitions and Outcome Expectations. Finally, many administrators believed that performance standards did not reflect the realities of job seekers' lives. As such, organizations tried to use customer experience to "correct" critical definitions and outcome expectations. This admistrator's opinion exemplified the views of others, echoing Frumkin and Andre-Clark's (1999) suggestion that nonprofits should define "success" in their own, not solely business, terms:
 "The system should be changed. It should be much longer term
 because people come and go. Performance standards are
 different--they assume a linear track. We should re-define
 'success.' The performance standards give 30 days to get a new job
 when an individual loses a job--sometimes we can't even find the
 family for 60 days. If they lose a job, it can easily take longer
 than 30 days to get another job." [Director, community-based

The need to redefine "success" was underscored by job seekers. Former heroin addict and 31-year old single parent, Isabell Smith, used a business training program to support and retain custody of her children. Isabell initially defined success in the simple terms of starting training--no small feat, as she was concurrently transitioning out of a sheltered recovery facility, retrieving her children from foster care, finding a therapeutic childcare program for their residual developmental needs, locating an affordable apartment, and enrolling in a job training program:
 "L was my original case manager; she was so awesome. I was trying
 to do everything and I was moving, getting my children back for
 the first time, supposed to start school at the same time, and I
 called her up freaking out. She was great and she told me, 'Girl,
 you are nervous, but don't worry about it. School will still be
 there; you can do the one in June.'" [Isabell Smith, job-seeking
 customer of community-based provider]

After this wisely-counseled delay, Isabell graduated from the provider's affiliated business program and got a job at Dot-Com Company at $10 per hour that she retained for 19 months until the facility closed. By that time, she had been promoted twice and earned $13 per hour.

Similarly, organizations felt that the definition of job seeking "customer" was too narrow, as this director's comments illustrate:
 "We're trying to educate WIA people and funders that our clientele
 need as much support as if they were formally diagnosed with
 'disabilities.' Ultimately, disability is not the disabling
 factor--it's their psychological condition, their family, workplace
 policies and practices, and their self-esteem." ]Director, customer
 service training provider]

Indirectly, job seekers' experiences supported this need for redefinition. During their training or early employment months, fully half of the 25 family heads scored above the mean for the general population on the CES-D, a widely-used non-clinical depression scale (Radloff & Locke, 1986), meaning "possible depression," while only one-third scored above the mean after several years in the work world. Similarly, navigating dangerous work environments also showed that intervention needs persisted long after training and twelve months of retention tracking, suggesting that "customer" was a longer-term category than even the initiative's liberal 12-month definition implied. Hard Working Blessed, a former felon in his early 40s, suffered two herniated disks in his back, two bouts of pneumonia, and repeated bouts of the flu in his 19-month crane operator position at Steel Mill & Foundry before being demoted to "light duty" because of the injuries. He found a subsequent job within two weeks, but lacked information about bridge health insurance to sustain his family's health during the three-month probation period at the new job. His wife's comments illustrated how defining the "customer" period as twelve months was inadequate, especially for children's well-being:
 "Well-child preventive visits, dental care, and children's eye
 testing [with implications for school performance] were all
 postponed during this period." [Mrs. Hard Working Blessed, wife of
 manufacturing training provider customer]

Other voices identified the need to redefine "retention," as this administrator's comments suggest:
 "Performance-based compensation is really a problem. There are so
 many complex situations. It comes down to quality treatment versus
 numbers processing. One of our biggest problems right now is white
 men. They don't stay at it. We put a lot of energy into them--but
 they don't stay. A second problem is African American men. But
 the problems are different. The African American men don't think
 they can do the job; their self-esteem is low. The white men don't
 think they need any help. Some of them have criminal histories and
 lots have substance abuse problems." [Director, community-based

In response, one intermediary digressed from performance funding directives and then advocated with the funder for new procedures:
 "We have sent out a Request for Proposals to community organizations
 for case management services that are not performance-based.
 The focus will be, 'This is a client; these are the issues.'
 Ongoing assessment is really necessary. Performance-based funding
 constrains the time [and] the quality of assessment procedures.
 [We] can't meet payment points because you need lots of time to do
 good individual assessments. The foundation thought that if we give
 them a job, it's a solution. I see that we give them a job, it's
 more problems. We need to renegotiate the complexity." [Director
 of retention services, development intermediary]

In fact, because a compelling case for this change was buttressed by data on job seeker characteristics and "stories" about housing, transportation, childcare, and children's school problems, the intermediary was able to expand its retention services and retain funding.

As a whole, provider organizations also argued for defining a broader range of "outcomes" than specified under performance funding. This intermediary manager's statement typified the broader critique of the TANF and WIA policy emphasis on work over education and training (Connolly & Gottschalk, 2000; Benner et al., 2001):
 "Teresa's class learned ... She was placed before the last week
 of training. By graduation, she had a job. [Rental Car Company]
 hired her. There were two others who were skilled besides Teresa.
 One stayed in college to continue his education; he's in his 60s.
 He's considered a 'failure' under performance funding. Further
 education [only] counts as long as a person is working." [Manager,
 development intermediary]

Similar sentiments about how to define "outcome" were expressed by an intermediary director in reference to the paucity of public funding under the welfare and workforce reforms:
 "Maybe folks are learning that 'there's no quick fix.' All the
 family issues are interrelated. Retention support is the hardest
 money to raise. There's money for training; money for placement.
 But not for retention, yet it takes forty cents of every dollar.
 The big issues are childcare [because] it disappears too quickly
 after the worker's wage level rises just a little; turning the
 clock off during education; and support for retention. I hope that
 reauthorization leads to more conceptualization of welfare-to-work
 as poverty reduction. That means longer-term investment."
 [Director, development intermediary]

Mission Strain. In a similar vein, administrators and professionals in provider organizations often felt that performance funding strained their mission to serve economically-disadvantaged customers--a common perception among nonprofits (Blazek, 1996) that at times masks ineptitude, but at other times results in advocacy for job seeking customers. This manager's views reflected those of many provider administrators:
 "As we move into retention now in the intermediary, it's not where
 it should be. It's a problem of the inadequacies at the front-end
 determining the results at the back end. It's a kind of cumulative
 domino effect. The numbers are low now in the business project;
 recruitment is low, the infrastructure is bad, and the program is
 numbers-driven. They forget the true mission and purpose of the
 program. Performance-based funding is a problem. The intermediary
 said they are doing more front-end funding now, but the skill
 and competence of the community organizations isn't enough. Any
 time there are behavioral change issues it takes a lot of
 preparation. The pattern is now: 'get the client in--worry
 later' versus 'get the preparation done on the front end, which
 will take care of the later.'" [Manager, development intermediary]

Multiple Funding Sources. A final organizational challenge resulted from the fact that the provider organizations all received funding from multiple sources, each with idiosyncratic eligibility and outcome requirements that thwarted the provider's mission and capacity to serve low-income job seekers. Such conflicts occurred regardless of funding source, as administrators reported:
 "We compete with TANF agencies, and they control participation.
 They can choose not to send to a JTPA program [like we used to
 be]." [Manager, printing training provider]

 "[City Workforce Organization (CWO)] is one of our funders. We
 assess the potential trainees and then we lose them there. They are
 not designated eligible for our program. We lose at least half this
 way. They don't pass assessments at CWO. [Why?] They have to
 show city residence and proof of such. Many don't have proof and
 others don't live in the city. They have to show two forms of ID.
 Many don't have two forms. They have to demonstrate 5th grade
 math and 6th grade reading. We've already given them a rigorous
 assessment--even after they've passed our assessment, they don't
 pass CWO's. We expected them to come to us from CWO already
 certified--it would be our feeder program. It hasn't worked out that
 way. Our assessment is at least 1 1/2 hours. We do some behavior
 testing. They've sent hundreds to be assessed. And then we lose
 half of them." [Director, business training provider]

The challenge of multiple authorities directly impacted job seeking customers and their employment futures, as illustrated by Ayesha Muhammad, a mother of five in her early 40s who was forced to change careers because a life-threatening injury ended her certified nursing assistant career. Ayesha Muhammad's experience also illustrates that changes in program content took time to develop, often because the requirements of public and philanthropic funders conflicted with each other:
 "To be honest with you, I was not skilled. The skills that I picked
 up are from the learning centers that my job had. I learned about
 Excel. I learned Microsoft. I learned just about everything I had
 to do to deal with computers [on my job]. I know how to print out
 spreadsheets. I know how to do logs. They [provider program] didn't
 teach you that." [Ayesha Muhammad, job seeking customer of a
 community-based provider]

A skill instructor at the provider organization echoed Ayesha's assessment that the computer training was not sufficient for office jobs. He noted that even one year after Ayesha attended the program, TANF funding requirements prevented using philanthropic funds to offer more intensive skill content:
 "The early computer training was too basic. We spent a lot of time
 on soft skils. They might only have learned how to save a file on a
 desktop; delete a file; and edit a document." [Can students switch
 to a more advanced computer course?] No. Students are referred to
 [provider] if they have work experience and some skills. They get 4
 weeks class training, but some are changing careers [like Ayesha].
 You can't pick up skills in 4 weeks.., poorer students often don't
 even reach basic skill levels in 6 months." [Computer Instructor,
 Ayesha's community-based provider]

Ayesha Muhammad's work supervisor described the career-restraining effects of TANF funding regulations under which past work experience, rather than future career needs, determined the length of skill training:
 "She didn't have any computer experience when she started working
 here ... She has taken advantage of attending some of the
 classes we had during company time ... We selected Ayesha to
 move to a position from sending bills to receiving ... it will be a
 lateral move for her." [Supervisor of Ayesha Muhammad at Financial
 Insurance Company]

In a small change, however, two years after Ayesha participated, the provider's computer training was expanded from 11 to 15 hours per week, largely in response to pressure from the provider's employer partners, job seekers and professional staff.

How Performance Funding Benefited Professionals

Professionals in service and workforce organizations are particularly vulnerable to being caught between the demands of performance funding and their view of professional service (Frumkin, 2002). Even so, workforce professionals in this study acknowledged benefits as well as challenges under performance funding.

Customer-Oriented Service Changes. In the best of circumstances, self-assessment procedures required under performance funding revealed problems at both professional and program levels that led to favorable service changes, as these job seeker and professional perspectives exemplify:
 "We did career assessment when Lucky Miracle [Asian immigrant
 job seeker] first came. When he came, the program was just starting.
 Sometimes there was not enough time to go into his history--how he
 got here. When you get a chance, you try to. So many meetings and
 clients. I have welfare-to-work, Bureau of Vocational
 Rehabilitation. I try to take care of a lot; I'm running around
 like crazy. I have a common understanding with Lucky. He is a high
 functioning client. Sometimes I end up focusing on those who are
 more in trouble." [Case Manager, community-based provider serving
 Lucky Miracle]

Lucky offered a different perspective from that of his case manager about the services he needed:
 "He contacts me every two to three weeks. He's trying to find me
 a job. Before the program I saw him every few weeks. Now he just
 calls. He's very, very busy." [Lucky Miracle, job seeker served by
 the community-based provider's case manager]

When the professional learned that, in fact, Lucky's job search was floundering, he re-assessed his role:
 "I rely on what clients tell me. I guess I need to question them.
 Take what they say and work with them." [Case Manager,
 community-based provider]

The customer's "voice" was heard such that the professional urged his organization to negotiate with the funding source for a smaller caseload. The negotiation was successful and the professional reached out more intensively to Lucky, and others like him, as a result. Increased Customer Advocacy. Performance funding also enhanced professionals' customer advocacy role. As professionals collected "stories" from job seeking customers, and learned more about their backgrounds through expanded MIS data capacity, they collected a body of evidence that increased their ability to advocate for them after they entered the workplace. Advocacy is, of course, a traditional role of nonprofit professionals (Frumkin, 2002); in this study it was practiced by for-profit provider professionals as well:
 "We talk about anger management, racism, drug problems, attitude
 problems, value differences, choices. In the retention phase, we
 look at workplace situations: Do you need an advocate? You have
 rights. We try to empower them; give them confidence. I write a
 letter introducing myself and the retention services to the
 individual's employer, unless the customer asks me not to. I tell
 the employer about the Jobs Initiative 'support program' and ask
 them to bring any questions or issues to me." [Professional,
 for-profit community-based provider]

When partnered teen father of two, Ahree Raca, encountered racism in a new construction apprentice position, his mentor at the development intermediary advocated directly with his employer and guided Ahree through the formal union complaint process. Ahree had recorded these among other racial incidents:
 "The supervisor called me names, like 'Dummy, homie, home slice,
 and Muslim/The supervisor also said to me, "My daddy had slaves,
 now I have me one.' The supervisor put his hands on me and smiled.
 When I asked him to stop, he said, 'Get out and head for the house.
 Go to the union if you want/The supervisor asked me, 'What do you
 bleed, because it can't be red?'" [Ahree Raca, construction training
 program graduate]

Because of his mentor's direct advocacy and guidance, Ahree reported that a meeting between his boss, his supervisor, and himself resulted in immediate relief from the harassment and his decision to remain on the job:
 "He didn't give the supervisor a chance to deny my allegations,
 because there had been past allegations by others against the
 supervisor. My boss told the supervisor, 'Times have changed,' and
 that his behavior was not acceptable and would not be tolerated ...
 It made it hard to go to the job.... [but] we worked together
 afterward without any more incidents of harassment." [Ahree Raca,
 construction training program graduate]

Increased Self-Advocacy. Workforce professionals also perceived that they could turn the performance requirement of organizational self-evaluation to their benefit. The director of a development intermediary allocated a larger proportion of funding to professional salaries in response to an analysis such as the one this professional reported:
 "The sector managers make $52,000 to $62,000 depending on
 experience. Three times what we're making. They're the guys sitting
 there pontificating and theorizing and making policy. [The sector
 managers and I]--we're really a team. It takes a team effort to help
 people. In the new request for proposals between our organization
 and the intermediary, we're looking at case manager salary."
 [Professional community-based provider]

On the other hand, such advocacy did not always result in success, as this manager noted, drawing his conclusions from previous employment as a training provider case manager:
 "At [training provider] my boss never let me see a contract.
 Directors don't want to let case managers know how much the
 intermediary is paying them--this would give case managers leverage
 to ask for raises. Thus, there's a lot of turnover," [Manager,
 development intermediary]

How Performance Funding Challenged Professionals

Role Strain/Challenge to Professional Expertise. Professionals that work in organizations have historically experienced tension between allegiance to the tenets of their profession and competing demands from the organization (Frumkin, 2002). In this study, role strain was the most pervasive challenge that professionals experienced under performance funding, exhibited most often in concerns about reduced quality of professional service. Reporting requirements conflicted with professionals' convictions of how to best meet customers' needs, as this case manager's comments illustrate:
 "I guess at [development intermediary] retention means from the
 first day in a job to one year. But what about the person who has
 a job for one month, loses the job, and is unemployed for the next
 six months? If the person works for one year after the second job,
 what kind of retention does he or she get? I guess if I consider the
 retention year according to the second job--my work load would
 be too heavy. And then there are the accountability figures for
 the intermediary--it's pretty confusing." [Professional,
 community-based provider serving Maya Vanderhand]

This professional, as others, rued that lack of time for in-person contact limited the level of relationship-building and individualized attention that she considered hallmarks of professional expertise. In this case, her job-seeking customer concurred and spoke for others by critiquing such impersonal professional procedures in terms of the results she sought:
 "I look at it like what do you call those people--like social
 workers--they go out to the families and look at how the kids are
 doing and stuff like that. If you have a case manager and that case
 manager has, I don't know how many [clients], they might have so
 many of them that they can't really focus. I was transferred from X
 to Y to Z. Z has been helping me with a lot of issues--gas
 vouchers, the move to this apartment, shoe vouchers. Now that I've
 been on my job for a year, Z is transferring me to somebody else. I
 feel so bad. I didn't really know Z, and now I'm being transferred.
 The contact should have been person to person." [Maya Vanderhand,
 job seeker served by community-based provider]

Maya's case manager agreed with this critique and not only extended oversight of vulnerable customers, such as Maya, past the one-year mark of designated service, but facilitated changes in the organization's service practices in line with Maya's recommendation:
 "I called Linda personally to let her know about Maya [the
 customer], and set up an in-person meeting for them to meet each
 other." [Professional community-based provider serving Maya

At the same time, the case manager was increasingly stretched beyond her service limits, which threatened to derail the change she implemented before the new procedure became firmly established:
 "I have 68 clients now. My maximum was 75." [Professional,
 community-based provider serving Maya Vanderhand]

Reduced Autonomy. Reduced autonomy was a second but prevalent constraint that professionals experienced under performance funding. Autonomous professional authority was essentially replaced by shared authority between professionals and customers and between multiple professionals. This retention counselor was one of many that valued autonomous one-to-one service over the performance requirement of service by multiple providers:
 "The people we work with really need relationships. They bond
 with someone. When they connect, they're yours. They stay."
 [Retention Counselor, community-based provider]

Many job seekers similarly valued sustained, autonomous relationships, associating them with improved employment outcomes:
 "He [case manager] became kind of a friend. I can call him at
 home ... He gives encouragement to me. The automotive course
 was ... postponed two times; I was two months waiting. Case
 Manager steadily encouraged me. 'It's gonna happen.' He helped
 with gas vouchers. He told me that he has the font picked out for
 my shingle when I open my own repair business." [Teresa Russell,
 job-seeking customer of community-based provider]

Teresa's case manager underscored that this relationship, over time, was vital to Teresa's job retention:
 "Teresa, for example, calls me at home now and then if she's had a
 bad day at work. She'll show up for work if she gets to speak her
 mind." [Case Manager, community-based provider serving Teresa

At the same time, Teresa's career benefited financially and educationally from multiple professional resources:
 "I go over to school [skills training partner of Teresa's
 community-based provider] to work on my truck and I had my [former]
 instructor help me with whatever I needed ... As long as I can do
 the work on it, I can take it over to the school and if [former
 instructor] has a day open, he is more than willing to let me bring
 it in and work on it, which is really a plus because it was going
 to cost me $150 for a mechanic to do the work." [Teresa Russell,
 job-seeking customer of community-based provider and its automotive
 training provider partner]

Because professionals' partnerships with employers were weakened after the economic downturn in spring 2001, their autonomy was even further challenged, as this program director outlined:
 "We have an Employer Advisory Council. Big name employers are
 on this council to see us succeed. Right now, none of these
 employers are hiring. There are 100 of them. None are hiring.
 [Why?] The economy. The downturn has hit them hard. And it's
 about to get worse. Two airline companies were on the Council.
 At our initial Council meeting, employers mobbed me afterward
 saying 'when can we hire your graduates?' One company wanted 40 of
 them. Now, especially after the terrorist activity and fallout for
 the airline industry, the market could be flooded with 5000 customer
 service people with experience. We're banging on their doors with a
 gift--six weeks of customer service training. New employers write us
 off as a "temporary agency' or welfare program, which we are
 not. They've been burned before by welfare-to-work programs."
 [Director, customer service training provider]

Work Overload. Professionals also found themselves overworked and overburdened in workforce organizations that did not have sufficient funding to "staff up" to meet the performance demands, as these comments typified:
 "Work day? On paper, 8-5. Actual, maybe 6:30 a.m. to coincide with
 first shift, or to 7 p.m. and after, to coincide with later shift.
 I make a lot of phone calls from home. Probably more like 60 to 70
 hours per week." [Job coach, healthcare training provider]

 "I have a 'caseload' of about 300--just impossible to fully track.
 The manufacturing program has at least 500 graduates. The program
 likes to stay in touch--there are a lot of Hard Working Blesseds
 [job seeking customer] out there, but it's absolutely impossible.
 Technically, Hard Working Blessed is beyond required program
 tracking--the intermediary does not technically track after 1
 year--formally. Informally, all sectors do follow-up." [Retention
 specialist, manufacturing training provider serving Hard Working

Hard Working Blessed might have benefited from consultation about the physical dangers on his job noted earlier, but he hesitated to burden his retention specialist, as many customers did:
 "I guess I figure that part with me is over. They helped me along
 in the time of need [getting a job] and now they have to go off and
 help someone else in their time of need." [Hard Working Blessed,
 job-seeking customer of manufacturing training provider]

Professionals feared that such overload contributed to lower rates of retention among program completers because their post-employment needs went unmet. Accordingly, drawing on the voices of their professional staff and job-seeking customers, provider organizations pressured funders to allocate more money for staff expansion. In some cases, such funding was allocated, as this workforce professional's response to the interviewer's question about caseload suggests:
 "Caseload? [chuckle] I have 60 to 70 people per contract and we
 usually have two contracts at the same time. The CEO of [our
 provider] organization is reviewing caseloads right now. There are
 going to be some changes!" [Retention Counselor, community-based

Discussion and Implications

This paper used ethnographic research conducted in the Annie E. Casey Foundation's Jobs Initiative as a platform to explore performance funding in workforce development, finding that new authority relations were evident among organizations, professionals, job seekers, and public and philanthropic funders, for good and ill. Workforce administrators and professionals voiced organizational improvements that job seekers and employers underscored, such as in-person transfers to new support professionals; more intensive and individualized outreach services for retention; increased capacity for and use of data; and substantive changes in training content. Moreover, the immediacy of the requirements under performance funding meant that many of these changes were made over a relatively short period of time, thus countering the "change inertia" often present in busy workforce or human service organizations.

Performance funding also led workforce professionals, job-seeking customers, and employers to collaborate on strategies to retain and eventually advance new workers, improving chances of economic mobility through employment. If retention outcomes had not been a funding requirement, community-based organizations and training providers could easily have been side-tracked by the depth and extent of the post-training and post-employment problems that customers experienced, devolving to time-worn professional practices and program procedures in response. Instead, the development intermediaries, provider administrators and professionals, employers, and job seekers often coalesced around program and service improvements, monitored them, and made mid-course corrections when necessary. Most of the time, they saw that the self- and external assessments that were mandated by performance funding resulted in higher rates of job retention and better employment outcomes for customers.

At the same time, the performance funding picture was not completely rosy. The ability of both organizations and professionals to satisfy their mission, remain true to their professional tenets, and remain relatively autonomous as service providers was limited by the external authority of funders. Professional staff, in particular, chafed under the new authorities, believing that job-seeking customers were more often hurt than helped by the service changes that resulted from performance requirements. Very occasionally, funds were withheld temporarily until provider goals were met, but this was seen as less problematic than the other performance requirements. Perhaps most worrisome, the temptation of some providers and professionals to select applicants who were "most likely to succeed," in order to meet performance demands and keep organizations intact, was antithetical to ethical professional practice, to the overall aims of funders, and to successful employment outcomes for job seekers. While it appeared that job seekers, as a whole, were more helped than challenged by the changes that accrued in workforce organizations and professional services under performance funding, workforce development stakeholders must remain vigilant about customer selection criteria and procedures if the redistributive goals of philanthropy and public policy are to be realized.

In sum, the experiences reflected in this paper suggest that neither professional nor funder should be the sole authority in work force development. Workforce program design, professional practices, and customer outcomes may be improved if the "voices" of job seekers, directly and through their affiliated administrators, professionals, and employers, are added to the "voices" of funders under performance funding. Multiple voices may assure more consensual authority relations: in particular, less autonomous, unaccounted-for power for professionals; less program hegemony for funders; and greater power for job seekers over their futures.

Clearly, characteristics other than performance funding influence workforce development outcomes, such as the state of the labor market, "fit" between job seeker and firm, job seeker background, and the like. But ultimately, performance funding may be an important component to help job seeking customers achieve better employment results rather than simply experience better "procedures" that may not be connected with results. Employer customers may benefit similarly. Experiences in this demonstration program under performance funding can be used to encourage consensuality and polyvocality in the design and implementation of workforce development efforts, and to identify, proactively, areas of expectable conflict and challenge. These experiences may also offer valuable "lessons learned" to organizations and professionals funded under other performance directives, such as managed care or welfare-to-work.


This research was conducted under independent grants to the author from The Annie E. Casey Foundation; the contents of this paper do not necessarily reflect the opinions of the foundation. An earlier version of this paper was presented at the Annual Conference of the Society for Social Work and Research in 2002. The author is extremely grateful for the helpful comments of two reviewers and the journal editor on the previous draft.


(1.) "Job retention" is not yet universally defined. The original WIA legislation required states to report retention and earnings 12 months after entry into employment (Public Law 105-220, August 7, 1998). The TANF program has allocated funds for employment retention, but has not defined retention (U.S. Department of Health and Human Services, 2003). In this paper and in the Jobs Initiative (Giloth & Gewirtz, 1999; Fleischer, 2001; Welch, 2001), job retention is defined as labor market attachment for 12 months with no more than 30 successive days of unemployment. Retention does not necessarily signify remaining in a single job, but wages must be stable or improved in job change.

(2.) "Economically disadvantaged" in this paper and in the Jobs Initiative is defined as family income below 200% federal poverty level.


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Author:Iversen, Roberta Rehner
Publication:Journal of Sociology & Social Welfare
Geographic Code:1U2NY
Date:Jun 1, 2004
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