Do Government Bureaucrats Make Effective Use of Performance Management Information?

Abstract

This research on a local job-training agency's use of performance-based contracting addresses a central question: Do JTPA program administrators use the performance standards system effectively to motivate behavior on the part of contractors, behavior that enhances agency performance and is consistent with program goals? I find some evidence that this agency uses information obtained from its performance-based contracting system to make resource allocation decisions. Service providers' performance relative to cost standards emerges as the most important criteria in these decisions. I conclude, however, that the performance standards system is not well designed, as performance measures are not strongly correlated with program goals and the predominance of cost-per-placement considerations has negative implications for service quality.