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 Background 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. …