Dias e Maynard-Mood 2006

JPART 17:189–211
For-Profit Welfare: Contracts, Conflicts, and

the Performance Paradox
Janice Johnson Dias
University of Michigan
Steven Maynard-Moody
University of Kansas
Downloaded from http://jpart.oxfordjournals.org/ at Northwestern University Library on January 16, 2015

ABSTRACT
This article examines how financial inducements in performance contracts shape the inner
workings of a for-profit welfare-to-work training program serving long-term recipients. Our
work pays particular attention to how contract requirements shape relationships between
manager and line staff and their treatment of clients. We argue that contract design, coupled
with bottom-level management efforts to meet contractual obligations, leads to a perfor-
mance paradox—the same actions taken to achieve contractual results ironically produce
negative program practice and poor client outcomes. Thus, rigidly constructed legal agree-
ments between the government and private service providers can distort incentive struc-
tures, causing programmatic conflicts between management and staff, and do little to
reduce long-term welfare use and diminish recipients’ poverty.
Welfare for profit—the concept jars, but the 1996 Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA) invites such a depiction. PRWORA promised
to ‘‘change welfare as we know it,’’ and perhaps one of the most dramatic change was
encouraging states to contract with for-profit firms to provide welfare services. Advocates
of privatization claimed that private sector efficiency would offer poor families better
service for less money. Critics worried about firms profiting from the impoverishment
of others. Ten years after this reform, it is time to ask how for-profit services have
responded to the needs of poor families and the exigencies of street-level work. PRWORA
gave states broad latitude to reorganize welfare delivery in order to make work its focal
point (Brodkin 2000). Nonetheless, 1 decade later, we still know remarkably little about
what occurs within these private agencies.
Using a private for-profit welfare-to-work training program serving long-term welfare
recipients as our site of inquiry, this research extends previous studies by giving greater
This research is supported in part by a grant to the first author from the Ford Foundation to the Research and Training
Program on Poverty and Public Policy at the University of Michigan. For their helpful feedback, we thank Sandra K.
Danziger, Christopher Jencks, Kevin Delaney, Yeheskel Hasenfeld, David Elesh, Alford Young, Evelyn Brodkin, Mary
Corcoran, Pamela Smock, Mayer Zald, Vicki Lens, Anthony Mallon, Kristin Seedfeldt, Thomas Brock, Vincent Louis,
Mary Stricker, Robert Reilly, Shreya Janssens, and Sheldon Danziger, participants at the New Directions for Research
in Social Policy and Organizational Practices conference and the annual meeting of the Midwest Political Science
Association. Address correspondence to the author at janjohns@umich.edu.
doi:10.1093/jopart/mul002
Advance Access publication on July 19, 2006
ª The Author 2006. Published by Oxford University Press. All rights reserved.
For permissions, please e-mail: journals.permissions@oxfordjournals.org.
190 Journal of Public Administration Research and Theory
transparency to a set of managerial and frontline practices and routines that have remained
otherwise opaque. Few studies examine for-profit agencies, and most welfare studies
choose to study managers (Lurie 2001), street-level workers (Sandfort 2000; Gais et al.
2001; Maynard-Moody and Musheno 2003; Watkins 2003), or clients (Edin and Lein
1997; Soss 2002; Hays 2003). By combining these issues, this study broadens the research
agenda and highlights the connections and implication of the ‘‘work-first’’ philosophy of
welfare reform legislation and the subcontracting of government services on the service
delivery process.
Much of the existing welfare reform literature evaluates the caseload declines and
factors that contribute to recipients’ outcomes (Council of Economic Advisers 1997;

Brauner and Loprest 1999; Schoeni and Blank 2000; Ziliak et al. 2000). Welfare organ-
izations have not been central to these discussions. Yet long-standing studies on human
service agencies have shown that what occurs during the enactment of policy is central to
understanding both policy successes and failures (Lurie 2001) and the operational proce-
dures and interpersonal relationships within these agencies are equally important to un-
derstanding such outcomes (Lipsky 1980; Handler and Hasenfeld 1997; Lurie 2001;
Brodkin 2002). Issues of managerial-staff relations, line worker discretion, and goal con-
gruence are essential parts of the policy process, and the literature on public agencies and
street-level bureaucracies maintains that client outcomes can be explained in part by
frontline discretion as exercised by street-level bureaucrats, such as caseworkers, police,
and teachers (Lipsky 1980; Goodsell 1981; Hasenfeld and Steinmetz 1981; Scott 1997;
Cohen 1998; Maynard-Moody and Musheno 2003).
The paradox of the new welfare legislation is that although it has afforded widespread
latitude and discretion to state administrators and their intermediaries, it may have simul-
taneously created greater constraint at the bottom. An underlying paradox—some would
argue ‘‘a fundamental contradiction’’—of welfare reform is that although states and local-
ities are encouraged to innovate and adapt programs to their communities, the individuals
who deliver these services to clients, the street-level workers, may be constrained in their
discretion when applying program policies to individual needs. This paradox may be most
evident in for-profit delivery of welfare as the cost-cutting incentives for management
confront the client-focused attention of frontline workers.
Contracting was promoted as the antidote for the organizational problems of public
bureaucracies. Contracting, as a form of privatization, has been used since the 1960s by the
government as a way to create greater efficiency at a fixed lower cost (Brodkin and Young
1989; Kamerman and Kahn 1989). However, prior to the 1996 welfare reform, the tradi-
tional approach to providing welfare services was in the form of noncompetitive, quasi-
grant arrangements made directly and primarily to nonprofit organizations (Nightingale
and Pindus 1997). PRWORA, by allowing states more flexibility in service provision,
made it possible for states to remove many of the existing contracting restrictions. Some
states opted to contract out services, primarily job training, and to use performance con-
tracts where payment is based solely or primarily on placement outcomes or quotas. The
institutional consequences of these changes are largely unknown.
Current research on performance contracts show that contracts typically stipulate
a focus on short-term deliverables, such as immediate job placement outcomes or quotas,
at the expense of longer term goals like employment quality and job retention (Autor and
Houseman 2005). Contract language appears to encourage some welfare programs to in-
vest their resources only in those activities that contribute directly to the financial ‘‘bottom
Dias and Maynard-Moody Contracts, Conflicts, and the Performance Paradox 191
line’’ (Brodkin et al. 2002; Thiel and Leeuw 2002, 267). Such efforts are likely to clash
with the case management perspective.
Drawn primarily from social work, the case management approach is based on in-
dividual assessment; it demands detailed, emotional interaction with clients, taking time to
discover their areas of interest and identifying the obstacles preventing them from accom-
plishing their individual goals (Anderson 2001; Segal, Gerdes, and Steiner 2004). In
theory, the work-first and case management philosophies complement welfare goals
(Anderson 2001, 167). But in program practice, reconciling the process-oriented philoso-
phy of case management with the work-first demands of ‘‘take a job, any job, now’’ may be
difficult. The work-first approach assumes that clients have few obstacles to employment

beyond personal motivation, and any work—even low-wage work with no benefits, little
security, and limited chances for advancement—is viewed as the best antidote to wel-
fare dependence. Case management, on the other hand, recognizes that individuals face
diverse barriers to employment; it sees good jobs, not just job placement, as the outcome,
not the treatment.
The difference in philosophy may be exaggerated when coupled with contracting out
to for-profit agencies where management is called upon to maximize output while also
minimizing costs.1 These goals are likely to conflict with the casework goals that many
service staff bring to the job. Under the new accountability model, frontline staff,2 who are
trained as case managers and deliver services in these new, for-profit welfare-to-work
agencies, may find themselves trapped between their understanding of clients’ needs
and the demands of their supervisors to place clients quickly and cheaply in jobs.
At the organizational level, the existence of these different perspectives is expressed
in normative conflicts over how best to move recipients from welfare dependency to self-
sufficiency. Using the narratives of managers, line workers, and clients, we examine the
ways these managers, street-level workers, and clients interpret the welfare directives to
better understand how the new policy imperative of work first merges with case manage-
ment approaches to help recipients. We present new findings on the competing demands
between policy demands and practice.
Using data from an intensive study of one for-profit job-training program, a local
subsidiary of a national program, we provide a detailed account of how the focused
attention to work-first service goals and contract compliance produced a performance
paradox. We examine how the performance contract contributes to tensions within this
program and produces unintended consequences for program practices and its long-term
1 The same may be true for nonprofit agencies that enter contractual relationship with the state. In the age of
performance contracting where public administrators of nonprofit agencies are being held to the same performance
outcome standards as their for-profit counterparts, nonprofit agencies may not be so inclined to take contract-centered
approach in their delivery of services (for fuller discussion of how contracting shape nonprofit service delivery, see
Sommerfeld and Reisch 2003).
2 No longer functioning solely as educators, staff in job-training agencies—those agencies responsible for
addressing recipients’ educational and employment barriers and assisting them in finding employment—are now
required to function as caseworkers. New responsibilities include, but are not limited to, goal setting, advocating for
clients, providing supportive counseling, brokering relationships, monitoring employment-related services, and
providing job links (Anderson 2001). In addition, today’s frontline workers in welfare-to-work programs, now
called ‘‘case managers,’’ are required to have more ongoing, direct, and ‘‘helping relationships’’ with clients. The
importance of this change in role from bureaucrat to caseworker cannot be overemphasized as it shifts power and
discretion to staff. As one client put it, ‘‘Generally the caseworker who has your case has your life in their hands . . .’’
(Anderson 2001, 167).
welfare participants. We investigate how this job-training program responds to the com-
peting demands of state regulators, executive management, frontline staff, and poor
women recipients. We ask, how do conflicting interests shape the ways frontline work is
conducted and the way frontline discretion operates?
Though focused on a single site, we maintain that the findings of this study may be
generalizable to other private job-training welfare programs similarly structured. Likewise,
our results have bearing on the nature of the gulf between policy ideals and policy imple-
mentation. After a discussion of the methodology, we present the background of the job-
training program and discuss the implementation of the performance contract mandates.
Having laid out the key areas of programmatic conflict, we then offer three sets of narra-

tives from the managers, line staff, and clients. We conclude by offering some explanations
for why these programmatic conflicts occurred and some policy recommendations.
METHODS
The data for this article come from an 18-month qualitative study conducted between
October 2002 and April 20043 of four welfare-to-work training programs (Johnson 2004).
This article focuses on one site, WorkOpts, a for-profit welfare-to-work training program
for long-term welfare recipients.4 Given the focus on issues of process and the relations
between people and organizational practice, we employ a grounded theory approach.
The grounded theory approach demands a dialectic relationship between data gath-
ering and theoretical analysis. Developed by Glaser and Strauss (1999), grounded theory
relies on the interactive process wherein the researcher is constantly comparing theory to
what he/she has learned from the data-gathering process. Simultaneously, the information
she gathers transforms the kinds of questions she asks.
Data Collection Strategies

The research involved multimethods: organizational, interview, and observational. Orga-
nizational data include contract stipulations. Interview data come from 22 clients, 17
street-level workers, and 5 program supervisors and managers. Data were also gathered
from over 1,200 h of participant observations of orientation sessions, classrooms, lunch-
rooms, and lobbies. The three different levels of information allow for triangulation and
depth of information on the relationship between the actors and their environment.
The 60 semistructured individual and group interviews provide information on the
individual perspectives of these actors. Some participants were interviewed twice. Gener-
ally, interviews lasted between 1 and 2 h. The majority of interviews were tape-recorded
and followed a formal protocol, but some discussions were impromptu. Most interviews
took place in a private room at WorkOpts, although several occurred at coffee shops, and
one interview was conducted in the respondent’s home. Group talks were equally impor-
tant to the study because these conversations allowed respondents to share individual
experiences in a large setting while allowing for explication of ‘‘the group’s point of view’’
and the contrasting perspectives of the interviewees (Agar and MacDonald 1995, 81).
3 The first author returned during the summer of 2004 to gather additional data.
4 The names of the individual, program, and the city are pseudonyms. Individual and agencies were promised
anonymity.
Beyond interviews, the study also included observations that allowed us to make
sense of the interview data. Lincoln and Guba (1985) argue that observations permit
researchers to acquire the fullest understanding of the phenomenon they are studying
because the researcher must interact with participants in their natural context. To guard
against having a biased view of the program, observation times varied about every 6 weeks.
Typically, observations occurred on Mondays, Wednesdays, and Fridays, but over the
course of the study, observations also took place on Tuesdays and Thursdays. Mondays
and Fridays were the busiest days at WorkOpts; however, the program appeared to work in
similar ways throughout the week.
We also collected contract information as a way to understand how the larger orga-

nizational structure shapes office relations and influences service delivery. Denzin (1989)
posits that this kind of data gathering can be helpful in elaborating the observational
framework, and Drasgow and Schmitt (2002) suggest that this process of exploring agency
documents, particularly the formalized rules, can be useful in developing a theory about
how process mechanisms impact outcomes.
Data Analysis
Each transcribed interview was analyzed using ATLAS.ti, which offers the ability to
manage, extract, compare, and explore meaningful excerpts from extensive amounts of
data. Data collection and analysis were iterative. Interviews were transcribed and analyzed
as soon as they were completed, and these findings would, to a degree, shape subsequent
interviews. In this way, new information was collected as the research proceeded and
questions arose. We began with a search for broad themes and patterns in the conduct
of frontline work, specifically the different set of incentives for managers, line workers,
and clients.
FINDINGS
The Political Economy of the Job-Training Agency
WorkOpts, a for-profit agency, is a subsidiary of Headly Inc., a national marketing research
and consulting firm with more than 4 decades of experience in serving many of the largest
corporations in the United States. They had no previous experience in providing welfare
services and only recently, in 2003, began to provide job training to welfare recipients in
Porter City, a large northeastern city. Its first job-training program, JobOpts, collapsed after
1 year in operation for failing to meet contractual job placement quotas. Despite JobOpts’
failure, Headly Inc. successfully negotiated with the city for additional programs. The city
agreed to fund two new Headly programs, WorkOpts and Exodus.5
At the start of the research study, WorkOpts had been in operation 6 months. The
program began as a demonstration project. During its initial phase, WorkOpts had 30
employees, including six case managers and two job developers, who provided service
to about 60 clients, many of whom had been on welfare for less than 5 years. At that time,
clients came from six of the 14 welfare districts in Porter City. Each of the four case-
workers on staff worked with 10–12 clients—a decidedly low caseload. According to
5 Exodus collapsed after 5 months of operation.

Table 1
Contract Terms
Program features WorkOpts
Type of contract Performance based; agency is required to
place 10 percent of its clients into jobs
Employment timeline Employ at least 90 days
Contractually defined eligible On welfare 5 years or more considered
welfare clients extended TANF
Actual years of clients’ 11 years
welfare experience

Origin of clients Entire city
Mandated maximum case
management caseload 35:1
Length of time in program 6 months but cyclical
Total required hours of 30 (includes paid or unpaid work activity at
work activities worksites and classroom instruction, commonly
referred to as job readiness or wraparound classes)
Work training 20 h of paid or unpaid work
Payment schedule $1,053.34 for enrollment in program: $1,316.67
for program participation for 6 months, $2,633.34
for initial job placementa
Minimum average wage required None
for placement
Number of clients required to
serve annually 1,200
Contract length 1 year renewable
Contract cost $3,000,000
Cost per client $2,500
Cost per job placement $25,000
a
At both programs, a client is considered enrolled if they have attended 5 consecutive days of programming without any absences.
caseworker testimony during the initial phase of the program, ‘‘We had lots of time with
clients to figure out what they needed. We were able to work with them.’’
Contract
In the second phase of the program, Headly executives negotiated a new contract that
required the WorkOpts program to accept all ‘‘extended Temporary Assistance for Needy
Families (TANF)’’ clients from all 14 Porter City welfare districts. ‘‘Extended TANF,’’ as
they were called, are recipients who have been on welfare for 5 or more years and are
among the most difficult to place in employment.
A summary of program features is provided in table 1. For $3 million, WorkOpts
contracted with the city to serve at least 1,200 extended TANF clients per year, approx-
imately 100 clients monthly.6 With this decidedly hard-to-employ population of recipients,
WorkOpts’ contract required them to place only 10 percent of its population in work. No
minimum wage specifications were set for the WorkOpts’ clients. These minimal contract
expectations are, on one hand, realistic, given the nature of the clients, but, on the other, set
6 Porter City has 5,804 extended TANF recipients (Source: Porter City, Division of Income Maintenance).
such low expectations that the meaning of ‘‘success’’ and ‘‘failure’’ becomes blurred. The
contract defines success as 90 percent failure.
In exchange for service, WorkOpts was paid according to its ability to enroll, retain,
and place clients in employment: $1,053.34 per client for enrollment in program,
$1,316.67 per client for program participation for 6 months, and $2,633.34 for initial
job placement (see table 1). According to the program manager, in addition to the con-
tractual obligations to the city, Headly Inc. demanded that WorkOpts show at least an
8 percent profit.
Services

WorkOpts’ contract with the city also stipulated that all enrolled clients receive case
management services defined as individual assessment, job coaching, educational services,
and assistance with employment obstacles. According to state guidelines, caseload size
was not to exceed 13 clients per caseworker. Despite the emphasis on case management,
the contract did not attach a fee to delivery of service as they did to job placement out-
comes, a disjuncture that proved telling.
In addition to case management services, WorkOpts was required to provide recip-
ients with 30 h of work activities. These hours were divided into 20 h of on-the-job training
(OJT), paid or unpaid, and 10 h of ‘‘job readiness’’ activities intended to inculcate recip-
ients with a strong work ethic and proper workplace behaviors.7 WorkOpts subcontracted
OJT services to ‘‘The Mission,’’ a nonprofit agency, whose main responsibility was to
identify and place welfare clients at various not-for-profit human service agencies across
the city, referred to as ‘‘worksites.’’ In exchange for working at these worksites, recipients
received their regular benefits and an additional check for their work hours.8
Clients
Over the course of the research study, WorkOpts enrolled 1,454 extended TANF clients.
According to their records, 152 or 10 percent of WorkOpts’ clients gained employment.
Headly Inc., WorkOpts’ parent company, hired 20 of these individuals. Without these in-
house hires by Headly Inc., WorkOpts would not have met the minimal 10 percent place-
ment rate stipulated by the contract. Full program data were not available for all Work-
Opts’ clients because none were collected. The program did, however, collect detailed
demographic information, literacy, and mathematical test scores. What information was
available showed that clients had significant barriers to employment. WorkOpts’ clients
read at or below the eighth grade level. The majority of the clients were African American
women and single heads of household.
For many of these long-term clients, welfare had become a way of life. Clients made
typical statements such as: ‘‘I feel like I have been on welfare all my life.’’ ‘‘My mother was
on welfare.’’ Recipients had come to rely on welfare to support themselves and their
families, and though many had worked in the past, they had limited work skills and few
7 In Porter City, job readiness activities had a variety of meanings. At WorkOpts, these services intended to prepare
clients for work were called wraparound activities. This included classroom lectures about the job search process;
however, with the permission of their case managers, some clients were allowed this time to go on independent job
searches where they filled out job applications.
8 Working clients were paid the minimum wage. Some clients who worked at worksites did not earn any wages
because they used up their 6-month federal allotment. Unpaid clients worked side by side in the same agencies as paid
clients.
stable employment spells. To the critics of the old Aid to Families with Dependent Chil-
dren policy, WorkOpts’ long-term recipients symbolize what is wrong with welfare—
intergenerational recipients with low levels of education and many children.
To understand the way that these barriers influenced recipients’ employment, the first
author followed 13 clients for 1 year.9 These clients’ characteristics are shown in table 2
and are compared with national data on TANF recipients. The ethnographic sample
employment outcomes are shown in table 3. The average person in this group had been
on welfare for over a decade and had five children and more than two-thirds lacked a high
school diploma. The majority of these clients reported having childcare problems. More
than half had physical health problems, such as high blood pressure, that required medi-

cation. Many also reported having back problems, spinal injuries, ‘‘nervous breakdowns,’’
and feeling depressed more than twice a week. Three clients revealed that they had
considered suicide. On average, these WorkOpts clients had at least three significant
employment barriers.10
At the end of their 6 months training at WorkOpts, none of the 13 clients in the
ethnographic sample found employment. After two additional months of observations,
two of the 13 clients found employment; 11 remained unemployed. Of the two employed
clients, one client reported that she found her own part-time employment as a housekeeper
on weekends for $10 an hour. The other recipient found full-time employment through the
program as a security guard but quickly lost her job for lying about her educational
credentials.11 Although only two of the 13 respondents in the ethnographic sample found
employment, this employment rate is higher than the overall employment rate for Work-
Opts’ clients.
Staffing
To manage the new client population, WorkOpts employed additional staff, totaling 45.12
Staff included one program director, five department managers, and one data specialist.
WorkOpts hired 38 frontline staff: case managers, classroom instructors, receptionists, and
job developers. The increase in the size of the client population increased caseload size.
Although the contract required the caseload size not to exceed 35, with more clients,
caseload size varied from 70 to 100 per case manager because many clients did not find
employment and were therefore kept on the books. Case managers maintained ongoing
involvement with clients whether they were ‘‘actively’’ participating in the program or not.
Workers would intermittently call clients just to check in, or in some cases, clients would
call caseworkers in cases of life ‘‘emergencies’’ (e.g., childcare fell through, paycheck did
not arrive, pending sanctions).13
9 This small, nonrandom sample of participants is not statistically representative of the client population. Program
data of educational tests show that the women interviewed are similar to the client population with regard to educational
attainment and marital diversity. These women, like the larger WorkOpts sample, read at low levels, and many were
unmarried mothers.
10 See Danziger, Kalil, and Anderson (2000) for a fuller discussion of recipients’ employment barriers.
11 The client falsely told her employers she had a high school diploma. When she was unable to produce a copy of
the diploma, she was fired.
12 The number of staff changed several times over the course of the research project.
13 Clients also cycled in and out of the program. As the only program of its kind, all extended TANF clients were
required to attend WorkOpts. Unsuccessful clients returned to the program after they completed their 6 months or if
they lost their employment.
Table 2
Ethnographic Sample
Barriers to employment National percentage WorkOpts
a
Race
Black 39 77% (10)
White 34 8% (1)
Hispanic/Latina 22 15% (2)
Marital statusb
Single/never married 66.0 100% (13)
Ever married 22.4 0
Prior work experience (1 5 yes) 92% (12)

Average number of years on welfare 2.0c 11 years
Aged
25 years or younger 77% (10)
26 years or older 23% (3)
Average Agee 31 years 33 years
Average number of childrenf 2 children 5 children
Average number of children , 13 3 children
Educationg
Less than high school 46.3 69% (9)
High school graduate/GED 47.5 31% (4)
Post high school — 0 (0)
Transportation (no car)h 30.0i 77% (10)
Health problems
Mother has work disabilityj 46% (6)
Child with health problem 15.7k 15% (2)
Mental health problemsl 4.3 38% (5)
Criminal background (1 5 yes) 23% (3)
Domestic violence (1 5 yes) 3.2–3.4m 15% (2)
Childcare problemsn 46% (6)
Employedo (1 5 yes) 25.3p 15% (2)
Number of employment barriers
Average number of employment barriers 3 barriers
0 0% (0)
1 15% (2)
2 23% (3)
3 15% (2)
4 or more 23% (3)
a
U.S. Department of Health and Human Services. 2004. Fiscal Report on the characteristics of TANF adults.
b
Ibid.
c
Harris (1996, 407–26).
d
Department of Health and Human Services, ‘‘Fiscal report.’’
e
Ibid.
f
Ibid.
g
Ibid.
h
If a respondent reporting not having a license or access to a car, they were coded as having a transportation problem.
i
U.S. Census Data. 2000. Public Use Micro Data Sample.
j
If respondent reported having a physical health problem such as back and spinal injuries that limited the type of work they can do, they
were coded as having a work disability.
k
The 1994 National Longitudinal Survey of Youth: percentage of all mothers aged 29–37 with children who have one of six limitations.
l
If respondents reported being depressed or having considered suicide, they were coded as having a mental health problem.
m
The 1993 Commonwealth Fund Survey and 1985 National Family Violence Survey: percentage of all women aged 18 and over who
report current severe physical abuse.
n
If a respondent reported not having reliable childcare or not having someone to help them take care of their children when they were
looking for work or at work, they were coded as having a childcare problem.
o
Employed after 6 months in program.
p
Department of Health and Human Services, ‘‘Fiscal report.’’
Table 3
Ethnographic Sample Employment Outcomes
WorkOpts
Employed 15% (2)
Average hourly wage $8.50
Job-offered benefits (1 5 yes) 50.0%
Unemployed 85% (11)
N 5 13 13
Many line staff were familiar with high caseloads from their prior work experience in

human service jobs. With two exceptions, all other staff had previously worked in Porter
City for a state agency, the majority in mental health. Eight of the 10 case managers had
been case managers before, and the majority had prior experience working with welfare
recipients. Among the staff, only two held Masters degrees, one in Social Work and the
other in Sociology; several others held Bachelors degree in Social Work. The program
director completed only a high school diploma. Thus, the management and staff had
considerable experience working in human services. Many were conversant with the
welfare rules, but few had experience working for and understanding the demands of
a for-profit corporation. Many line staff thought working for a for-profit company would
allow them to help clients—most believed in the message of ‘‘ending welfare as we know
it’’—and increase their own pay. For them, at least initially, working for WorkOpts was an
opportunity. However, many found a stark difference in the work cultures of public human
services and those of the for-profit company. Their optimism quickly soured.
Frontline staff at WorkOpts resembled the racial distribution of the client population:
32 of the 38 staff were black, 5 were white, and 1 was Asian. Three of the five managers
were white. Men occupied the majority of the management positions. None of the man-
agers and job developers were former welfare recipients. Four members of the frontline
staff were former welfare recipients, and eight other line staff members had immediate
family members who were currently receiving cash assistance from the state. The eco-
nomic and social border separating the worker from the client was thin.
Implementing Competing Philosophies

Meeting the contract’s job placement goals and profit quotas created considerable tensions
within program management. The evidence we have marshaled suggests that the easiest
way for WorkOpts’ management to meet the city’s contract goals and make a profit was to
minimize the time and effort line staff devoted to each client. Individualized attention
distracted from the goal of immediate job placement, which compromised the parent
company’s economic gains. Yet many of their hard-to-place clients came to WorkOpts
with multiple employment and life problems. They lacked the work habits and skills to
easily succeed in the job. Many had several young children or a history of continuing health
and substance-abuse problems. Nonetheless, management expected the line staff to treat
this diverse group with a standardized, rapid-paced program. The contract obligated short-
term service and job placement for only 10 percent of their clients, and this quota drove
management’s expectations and demands. Under these conditions, WorkOpts management
had little incentive to go beyond minimal services.
From the onset of the program, the contract inducements competed with the frontline
staff and client motivations and desires. This conflict led to enduring and debilitating
organizational problems. Prior to operating under the new contract, frontline staff had
smaller caseloads and thus more individual time with clients. According to caseworkers’
testimonies, under the case management model, WorkOpts staff placed roughly 40–50
percent of their previous clients into unsubsidized employment.14 They were then able to
concentrate their energies toward life coaching, educational development, and job fit rather
than quick job placements. Under the new contract, caseworkers had considerably higher
caseloads and less individual time with clients. Where previously line staff were able to
spend 30 min to an hour with individual clients, with higher caseloads and more emphasis

on quick job placement, they now had less than 10 min with each client. Whereas staff
were able to place almost half the clients into employment, under the new contract, staff
struggled to place even 10 percent. In total, the change in contractual stipulations from case
management to a work-focused program produced considerable organizational conflicts
that affected program delivery and client outcomes. From these conflicts emerged three
distinct narratives of what the agency should be doing.
Management, street-level workers, and clients held strikingly different views of what
was needed to move recipients from welfare to work. The primary clash centered on
management’s ‘‘work-first’’ approach and staff’s orientation toward ‘‘social work’’ or
casework practices.15 These sets of beliefs proved incommensurable. In total, the differ-
ences of views ignited an ideological war between frontline workers and managers in
which the clients were treated more or less as pawns in a struggle over which approach
was best. In sociological terms, it was a conflict between immediate market attachment and
human capital development. In organizational terms, it became a conflict between man-
agement and staff. In policy terms, it was a failure of both sides to achieve the goals of
welfare reform.
We elected to use personal narratives from managers, line staff, and clients as a way
of inviting readers to see these individuals not just as mere subjects but rather as people
whose stories can serve as powerful research tools. Generally, these viewpoints are
flattened or silenced by more traditional research methodologies (Maynard-Moody and
Musheno 2003; Ospina and Dodge 2005).
Management’s Narrative
For the majority of WorkOpts mangers, implementing welfare is about getting line workers
and welfare recipients to comply with the ‘‘rules.’’ Their narratives reveal a keen focus on
compliance and efficiency. Emotionally detached and financially motivated, management
focused their energies on achieving program results as stipulated by the contracts. For four
of the five managers, WorkOpts’ success was tied to their own financial achievement. They
simply could not afford to have the program fail. When asked why they worked at Work-
Opts, the executive manager replied, ‘‘It pays the mortgage.’’ For others, ‘‘I am trying the
for-profit area to pay my bills.’’ Still others responded with ‘‘because of the money and to
compensate me.’’
14 According to worker testimonies, the program served between 70 and 100 clients in total during the demonstration
phase of the program.
15 The terms social work and casework are used interchangeably throughout the paper; however, within the disciple
of social work some distinction exists (see Segal, Gerdes, and Steiner 2004).
Managers’ personal success was tied to the program’s meeting its contractual require-
ments. In that vein, they pushed line staff to dedicate their time to the financially rewarded
contract goals of immediate job placements. They also wanted clients to abide by the rules
of the program and take a job, any job. To achieve these goals, managers worked tirelessly.
Besides the personal motivation, the program supervisor explained the impetus behind his
push toward the work-first approach:
Well [the contract] gives you directions. The contract does have direct guidelines. I mean it’s
clearly defining; [It says] this is how you are going to submit the paperwork to the fund
source. This is how blah, blah, blah, blah, so it clearly delineates a process. . . . We have

guidelines that we have to follow, we have those rules that we got to follow like they [staff
and clients] have to follow. . . .
The rules laid out by the contract governed program service options. The contract
required two simultaneous program activities, classroom and work activities, and dictated
what activities clients must receive and specified areas of flexibility and discretion. Despite
being granted some flexibility to be innovative, management chose a narrow reading of the
contract. In practical terms, this meant fully adopting the work-first model of practice at the
expense of the social work or case management model that line staff supported. Describing
the contrast between these perspectives, one manger explained
This type of [welfare-to-work] industry requires fast-paced thinking, quick thinking,
effective thinking, resourcefulness . . . [It’s not] traditional social work, [where] there is
a process in working with a client. There are expectations and rules and regulations and that is
also in the welfare industry, but there isn’t that immediacy as much as . . . within the welfare
industry. In the traditional social work . . . something that needs to get done [can get done]
within a few weeks or a month or something . . . there isn’t as much immediacy.
The manager’s use of the word ‘‘industry’’ accurately reflects the business mode that
frames supervisor understanding and decision making.
He later elaborated
This is not an industry for someone looking to break into social work, etc. I look at it as above
a social work level because in the social work level, the traditional social work, there is
a process in working with a client. But there isn’t that much immediacy. Th[is] industry is
unique in terms of the social work approach. You really can’t have that social work model so
to speak in working with clientele.
Displeased with line staff’s social work or case management approach, managers
described frontline workers as ‘‘taking too much time’’ with clients. According to manag-
ers, staff needed to abandon their slow social work approach in favor of the ‘‘rush-rush’’
style.16 Such actions would help case management meet the immediate and short-term
results of the city government and the profit expectations of Headly Inc.
Though financial gains and the contract guidelines heavily influenced the manage-
ment’s dedicated focus to quick labor force attachment, the management’s actions were
also motivated by their personal beliefs about the recipients’ job prospects. Managers were
generally pessimistic about clients’ chances of employment and upward mobility. The
16 Client comment.
‘‘take a job, any job’’ approach seemed the best course of action; it meant that they and
their organization succeeded even if the clients did not.
Sure [clients] will be able to hook up a job but they’re not going to be able to hook up that $20
an hour job. And so it becomes a catch 22 [for them]. I want the job that is $20 an hour but on
the other hand I don’t have the skills that are going to get me there. So it’s a difficult situation.
When probed on what kind of services WorkOpts offers that may afford recipients
some upward mobility, this manager ignored the issue of skill deficits and personal cir-
cumstance and put forth an alternate explanation for the recipients’ unemployment, mo-
tivation. Retreating to a common stereotype, he argued that

It’s the motivation. Those individuals that have secured appointments they’re not necessarily
college graduates. They do have again eighth, ninth grade reading level and have three to four
children so they do face the same barriers that those that are not. I think it’s the mindset of do
I want to go now or is this the summertime and I just want to chill in the summer and wait
until September comes around. I think that’s part of it.
All managers agreed that one of the biggest obstacles to clients’ employment was
their motivation. When asked what these clients needed to help them, management shared
the standard response, ‘‘I mean these folks [clients] need some, I think, intense clinical
work, quite frankly, just years of depression.’’ However, when queried on what resources
the program provides for these clients, the program manager responded
I think that we have bounced around [getting a psychologist] a little bit, but never given it
much thought. I haven’t seen in the contract or guidelines any indication of needing
a psychologist. I think that’s the reason why there’s no funds allocated for it. . ..
Given the clients’ educational and skill deficits and their difficult personal situations,
motivation is a relatively simple and superficial problem: one that can improve particularly
through therapy. Although managers argued that a psychologist might have been helpful in
motivating recipients, they failed to hire a therapist or subcontract with any agency that
provides this type of service. Cutting costs took precedence over providing a needed client
service.
Street-level Workers’ Narrative

In contrast, frontline workers expressed a typical ‘‘social work narrative,’’ which could be
described as ‘‘people first.’’ Their narratives reveal a focus on helping clients achieve long-
term success. As previous work has shown, frontline work in social service is tied to workers’
personal and occupational identities (Maynard-Moody and Musheno 2003). Line staff at
WorkOpts were no different. In their words, frontline staff wanted to work in human service
to ‘‘help people.’’ They wanted to use their professional power to make a difference in their
clients’ lives. Line staff tried to tailor their services to what they perceived as clients’ needs
but were limited by management actions, program resources, and contract requirements.
The contract required case management but did not reward its implementation. The
provision of case management services was not tied to any financial inducements or
penalties. With little program support from management and no legal and financial support
for their people-first philosophy, frontline staff were constrained in their ability to help
clients enhance their job skills and prospects. In the end, line staff at WorkOpts were
reduced to client processors, not social workers.
Many staff understood that their social work philosophy was not compatible with the
managers’ work-first approach. Summarizing the differences in viewpoints, one line work-
er’s words reflected the perspectives of her peers:
We are in the field of social work [but] a social worker is someone who gets a little
more into the person’s personal life. They go to the house maybe more. They’re more
interested in maybe some of the quality aspects of the life, ‘‘Do you have leisure time
with your children?’’ You know nice things like that. . .. We have a limited amount of
time with clients.
Echoing a similar sentiment, one caseworker said,

We have a limited amount of time, you know, with the person . . . it’s gotta be fast. To me,
they’re [management] looking for results here. ‘‘How many placements did you get? What
were the results?’’ It’s like, almost like a statistical thing. They’re worried about statistics,
where from our end we see it as, ‘‘Okay, it’s not just statistics.’’
Without enough time to work with clients and with management’s emphasis on
placement quotas, frontline staff were not able to explore ‘‘the quality aspects’’ of the
client’s life or implement their social work skills. Workers complained that
You’ve got like maybe ten minutes for each participant, sometimes less than that; so basically
the relationship is really bad. I mean you don’t have time. I wouldn’t use the word
‘‘relationship’’ because you don’t have any relationship; you just fill out the papers [and] ask
basic questions. . . .
Though some staff were willing to abide by these time constraints, others were not.
Some would extend their time with clients ‘‘to work through the barriers that [clients] have
and [help them] realize that those barriers are having a hindrance on them getting a job.’’
One of the major obstacles facing WorkOpts’ clients was their limited human capital;
many lacked the education and skills to move beyond poverty-level employment. Street-
level workers believed that the case management approach could help clients increase their
human capital to make employment gains. Describing the dismal situation for clients, one
worker gave an account of the clients’ employment barriers:
I would say at least eighty percent of the clients that come through the door haven’t
made it through high school—don’t have their diploma. So realistically, we’re
looking at clients who are only gonna get minimum wage. $5.15 an hour ain’t
gonna cut it. Not when you have three kids, or six kids, or however many, it’s not gonna
cut it.
Frontline staff strongly believed that clients needed remedial educational classes such
as Adult Basic Education and courses for General Equivalence Degree (GED). Many line
staff complained about the lack of resources at WorkOpts to help clients. Echoing the
viewpoint of their peers, one staffer summarized the perspective. ‘‘You cannot get some-
body ready for a job if they have no skills, if they have no education, if they have no
training. What job are they gonna have?’’ When asked what the program needed, the
overwhelming frontline response was:
My main issue [with the program] is the job thing. They emphasize the job more than the
education, and to me, it should be education, then job. Because the more education you got,
then the more you can make on your jobs. That would be my main issue.
For line staff, helping clients remove such employment barriers was a personal im-
perative. Staff defined ‘‘barriers’’ broadly. According to their definition, obstacles to em-
ployment included educational deficiencies, depression, and social isolation. For example,
line staff wanted to expand the clients’ horizons, introduce them to new places, and help
clients become less socially isolated. In discussion, workers would comment:
Some [clients] have never been downtown except to go to the mall. Some people have
never seen [The Monument] and lived here all their lives. Some people have heard of Willow
Creek [a near by suburb], they heard of Salem [another suburb] but have never been there.
I think that’s really sad because their world is so small. And trying to expand their world

is a difficult task.
Another worker echoed the desire to address clients’ social isolation:
Poor people, it’s easy to oppress them because you keep them in their neighborhoods
and you surround them with liquor ads, drug ads and cigarette ads . . . you don’t educate
them. It’s sad. It’s sad. I wish I could take them on field trips . . . I’m like let me show
you something.
These strong feelings about clients’ social isolation and lack of opportunities fueled
street-level workers’ desire to help. But despite their personal impetus, line staff were
constrained by the management’s guidelines. When queried on how much flexibility they
had to design individualized programs for their clients, caseworkers responded, ‘‘Not
much. I mean the guidelines are very specific. [The management] give us, you know, what
THEY want to do’’ [emphasis original].
Regardless of the pressure from management to reduce their individual time with
clients, some frontline staff refused, openly objecting to management demands. For line
staff, helping clients remove their employment barriers was a personal imperative. Despite
the consequences of the managements’ objection, line staff banded together and organized
client initiatives.
I did the sexual workshops, sexual health. I’ve got [Black Alliance], ‘‘Blacks Educating
Blacks’’ about sexual health to come out and do a two-day workshop and, boy, you never
heard so much howling and screaming and fussing. Management said, well, we don’t want to
do that again.
With limited success, line staff continuously tried to push their agenda forward. As
one frontline staff put it:
One way we wanted to [motivate clients] was not only though our own role models and
behaviors and the way we treated them, but was by bringing in other professionals to talk to
them and let them know that, ‘‘Yes, maybe you made mistakes, maybe your past has been you
know this, that and the other, but that is not the way your future has to be.’’ But that was
circumvented by management because what we came to find out was it wasn’t about
motivating the women to make a transition in their own life, a long-term change, it was about
meeting an immediate number. Just get them jobs. Bottom line—get it done.
Management did not reward such initiatives. Instead, they became angered by what
they perceived to be the staff’s insistence on ignoring the contract’s demands. Seeking to
curtail line staff’s action, management constrained frontline workers’ initiatives by can-
celing all motivational speakers because it distracted from the job placement focus.
Unable to give up their fight for broader service options, line staff remained vigilant in
their efforts. When group actions failed, individuals took up the struggle alone. Demon-
strating her protest, one staff member described her actions with clients:
I chose to speak my mind. I choose to let paperwork go. I chose to listen to the client. . ..
When I go into the classroom I close the door and I tell them what I want. How [is
management] going to know? Who is going to tell them? [I tell clients], ‘‘If you’re not going
to keep the job, what’s the point in accepting it? Even better yet what is the point in going on
the job interview for a job you don’t really want?’’
This type of advice, although undermining management directives, allowed street-

level workers to achieve dignity at work. In their eyes, they were doing ‘‘good’’ by helping
clients navigate the welfare system to achieve their individual goals. As other scholars
(Maynard-Moody and Musheno 2003) have found, when staff perceived the rules as unjust,
they often follow their own ethics.
Management responded to this rebellion by confronting staff. Suspected of willfully
disobeying directives, a staff member reported her exchange with management:
I was approached by the [Program Officer, highest ranking administrator] who mentioned
that she thought I was not a good job developer and when I asked her to clarify that she said
the [job placement] numbers were really low and that proved that I was bad job developer . . .
[She said] I’m too much of a purist; that job development is a dog-eat-dog profession and that
I just wasn’t cut out for it. . .. She literally yelled at me when I tried to justify some of the
reasons for the low number [and said] I care too much about the clients and I’m thinking,
‘‘Well isn’t that why you hired me in the first place?’’
The incongruence in viewpoints often led to open and hostile exchanges between
outcome-focused program supervisors and client-centered line staff. On a regular basis,
managers and line staff could be found in the hallways hashing out their complaints with
each other. Quite often, each would storm off to their respective corners without any
resolve.
The inability to reach some form of reconciliation between these two perspectives
damaged the program. Disagreement with management’s work-first philosophy led to the
resignation of two key employees, the most highly educated and experienced, which left
the division understaffed. The result was a higher caseload, exceeding the state require-
ments. The disagreement had a ripple effect: 1 month following the departure of these two
employees, a high-ranking manager, who strongly empathized with clients, also resigned.
She too cited management’s ‘‘tunnel’’ vision and disregard for clients’ long-term interest as
reasons for her resignation. Before she left, she gave a teary-eyed testimonial about her
displeasure with the company.
We are just another welfare-to-work, WorkOpts is a for profit. . .. The company gets
$12,000 for every participant we can get to stay in a job for 90 days . . . and guess what the
jobs are, wiping the shit off of old people’s butts in nursing homes, they are cleaning toilets at
the vet. What am I doing . . . like why am I working here? We are not helping anybody. It’s
horrible I hate it . . . I think [case managers] try really hard to make the program mean
something. We had motivational speaker; we were doing something that was meaningful . . .
and the clients told us when I did my little evaluation every Friday that this was different, that
they didn’t just feel like they were another hot dog being processed in the chute. Now I am . . .
almost embarrassed to work here.
These departures left the program with fewer employees who had only worked in
public social service agencies and were themselves former welfare recipients. These
remaining employees had less experience and limited employment networks that they
could leverage on the clients’ behalf, thus further compromising the program’s ability to
connect recipients to work.
The unreconciled differences in the views of managers and workers reflected a clash
embedded in the policy and contract that resulted in debilitating effects for program
operations. By demanding that clients receive case management services but compensating
the program only for job placement, the contract created the basis for the hostile interaction
between management and staff. With no incentives to put the clients’ needs first, the

contract set up a dichotomy between the desires of the staff and those of the management.
Clients’ Narrative
Different from line staff and managers’ viewpoints, clients’ perspectives emphasized the
need for educational credentialing, skill development, and job tailoring in their struggle for
upward mobility. Neither the management’s quick labor force attachment model nor the
case managers’ life skills program addressed clients’ perception of their own needs. In
general, clients believed in the underlying philosophy of work but wanted training, edu-
cation, or the right type of job to make work worth it. Common in most client narratives
was a high level of optimism, but many felt constrained by their limited education and
few employment skills. Believing they were still going to make it, many clients were
hopeful; but for some, welfare generally, and WorkOpts specifically, was crushing, or
had crushed, their dreams. Rather than fostering hope, welfare and WorkOpts had pro-
moted a system of spirit-breaking work that they considered menial. For some clients,
particularly African Americans, this kind of work made them think of the sharecrop
economy their grandparents had fled during the northern migration. Drawing on the slavery
analogy, some clients would comment, ‘‘Welfare is modified slavery. They put you in
jobs that they wouldn’t even want to be in. Where they wouldn’t want to take their kids,
their daughters, their cousins, their aunts, none of their family members just so they can
keep their jobs.’’
The contract required that clients work in these ‘‘slavery-like’’ conditions. The work-
first contract demanded that recipients like ‘‘Macy,’’ a 10-year veteran of welfare who
dropped out of school with only an eighth grade education, find a job within 6 months.
Tearfully defending her employment status, she explained, ‘‘I’ve been looking for a long
time. Being so that I don’t have no high school diploma or no GED is like they don’t want
to hire you because you don’t have none of that.’’ Macy’s plaint is familiar to many
WorkOpts clients; one-third of the ethnographic sample lacked a high school diploma,
and a significant number of clients read at or below the eighth grade level.
Clients experienced the one-size-fits-all approach at WorkOpts as ‘‘You want the
help, but they are not giving you the help that you want. It is like a rush thing with them—in
and out. They are just giving you little jobs. It don’t work like that.’’ Unaware or unfazed
by clients protest to the rushed job placement, the program did not deviate from a narrow
approach to its mandate.
With respect to the 10 h of classroom instruction called ‘‘wraparound’’ classes, the job
readiness activities also did not focus on what the clients desired: educational credentialing
for better job attainment. These classes were built on the basic assumption that long-term
recipients lacked ‘‘life skills,’’ such as stress reduction, time management, and budgeting,
needed for employment. The classes were geared toward either educating clients to a proper
work ethic and etiquette or providing them with life skills.
Though some clients may have agreed that they lacked work ethic, more pressing for
these clients was the need for educational development, skill training, and career advance-
ment. They were frustrated by managers and case managers’ attention to their life matters
at the expense of attention to their educational needs, skill development, and need to get
good jobs. Expressing the shared feelings of her peers, one client commented
I don’t just want a job, I want basically a career, that’s why I want to do something in data
entry where I know I have room for advancement and move up in the company. I don’t just

want to work at a store oh, no, I can’t put up with that. [If it’s a choice between just taking
a job then] I’m going to stay on welfare and get all this money that they’re giving me.
Linda had been on and off welfare for 15 years because, in her view, her lack of high
school diploma, not her work ethic, kept her from securing stable employment. She hoped
that by attending WorkOpts she would finally earn her diploma, even a nursing degree. In
March 2003, she reported that
They [WorkOpts] suppose to help me get the GED. I been here since November [2002],
I have not yet started one class for my GED. I only need one more test. And I’ve been to
different places, and it’s hard to come here and to meet my [work] hours, and to go to another
place to do my GED. I can’t do that. I can’t travel two different places at one time. Now they
said they were gonna help you get your GED in here . . . they said that in the beginning of the
month. This is the end of the month, and I have not yet heard nothing. I put my name on the
list . . . ‘‘Oh, we’re gonna talk to you later.’’ And it’s been months, days been running around,
and still nothing yet. I’m like, ‘‘Well when am I gonna start?’’
Linda’s experience was common; she represented the norm at WorkOpts. During
orientation sessions, clients were promised that they would get a chance to earn their
GED, get their driver’s license, and learn computer skills, but none of these services were
provided. Indeed, management reassigned the GED instructor to teach job readiness clas-
ses. No replacement was hired for the GED classes.
In general, WorkOpts’ clients were discouraged and aggravated with the disconnect
between job readiness classroom instruction and their employment needs. Expressing
a sentiment shared by other clients, one client reported that
They [the classes] full of crap. Crap, crap, crap that’s the only thing. The wrap around class
that I’ve been to, the last one I been to was about stress. Relieving stress. Yes, I had some
stress to relieve too and I released it. I released my stress and I let them know that I was
stressed about coming in here. I got tired of coming in here; I got tired of them telling me oh,
we’re going to find you a job today. Oh, we’re going to do this for you today. I’m tired of
hearing it. Don’t tell me unless you going to actually help me.
These classes, created to inculcate recipients with job readiness, had little to no utility
in the clients’ eyes. Job readiness classes did not bring them any closer to getting the nec-
essary educational credentials, skill development, or jobs that they sought. In fact, any client
responded to the lack of GED classes with open hostility. Displays of their anger were
present in the classrooms. In a room filled with 40 or more of their peers, recipients loudly
voiced their complaints about curriculum, but often they transferred this dissatisfaction to
their instructor and fellow classmates. On any given day, clients could be found in verbal and
physical altercations in the classroom. Describing the situation, one client says, ‘‘Classes are
out of control . . . people screaming, arguing with each other. . .. Girl[s] . . . yelling at the
teacher, who’s trying to instruct the class. It [is] really hectic.’’ Many clients would disrupt
the class saying, ‘‘I’ve been through this. I don’t feel like doing this shit no more.’’ Physical
and verbal altercations ensued between instructors and students, and on more than one
occasion, the police had to be called to calm the crowd. The classroom situation became
so unmanageable that many clients stopped attending classes, choosing instead to hang out
in the lunchrooms or smoke outside. Some even dropped out of the program entirely, thus
lowering the program’s enrollment and jeopardizing their own welfare benefits.
The client narrative demonstrates dissatisfaction with both the work-first and case

management perspectives. Recipients were reluctant to leave welfare for jobs that would
not advance their position. Classes that focused on life skills instead of education and job
attainment irritated them. In short, the client narrative highlights the flaws of the mana-
gerial and caseworker perspectives. Both points of view were equally unsatisfactory in
getting recipients from welfare to work.
DISCUSSION
WorkOpts, although a single organization, is not an idiosyncratic program but rather an
example of what happens during the implementation process of welfare services when
legislators attempt to bring the market model of contracting to social service reform. The
programmatic conflicts at WorkOpts are due in part to the contract incentives and the
clashing views among managers, line staff, and clients of what is needed to move recipients
from welfare to work.
The policy and contract mandated implementing job placement and case manage-
ment, but without any incentives to make the two elements work together, the contract only
served to aggravate traditional organizational dilemmas. Although in theory the program
could feasibly implement both mandates, management had little incentive to do both. They
were financially rewarded for pushing forth the message of work first in the short term at
the expense of providing individually tailored services for clients.
However, the decision to ignore case management for job placement exacerbated
problems within the program. Organizations place demands and constraints on their lead-
ers. What is most important is the leaders’ construction of, and reaction to, the available
and constrained choices; these responses shape organizations’ failures and successes (Lynn
1987; Denhardt 1993). Managers at WorkOpts were unable to balance the priorities of the
contract with the demands of line staff and clients. Opting to ignore line staff requests,
management’s actions fueled conflict between themselves and their line staff and between
line staff and clients. The result was a philosophical war with practical consequences over
whether to prioritize the recipients’ needs or their contract first. In practical terms, this
difference of positions led to a battle over whether to enhance clients’ human capital or
push for quick labor market attachment. Driven by the contract, management succeeded in
designing a program that emphasized rapid and often-temporary labor force attachment
over skill or educational development but at a great expense.
To achieve low-cost rapid job placement, management sought to curtail staff atten-
tion to clients’ needs, but those efforts were never fully successful. Staff continually
revolted, and this led to a chaotic and hostile environment, not efficiency. This clash
between cost-cutting managers and service-oriented street-level worker was predictable,
almost inevitable. Frontline staff were hired for their devotion to client-centered service—
they were social workers by either training and/or orientation—yet at WorkOpts they were
being asked to forgo their training and ethics for an economic model that they maintain did
not benefit them or their clients. Previous scholarship shows that conflict is likely where
line staff and management have divergent points of view and differ about which perspec-
tive is more effective.
Frontline workers’ responses to managements’ actions underscore findings from pre-
vious research. Worker discretion can be limited and constrained but not eliminated despite
concerted management effort (Brown 1981; Brehm and Gates 1997). The WorkOpts case
illustrates that even in strict regulatory environments frontline workers will exercise in-

dividual discretion or agency. The WorkOpts case also shows, paradoxically, that attempts
to eliminate frontline worker flexibility and to focus exclusively on contractually defined
objectives can contribute to program failure.
Whereas the conflict between management and frontline workers is telling of what
occurs during implementation, clients’ narrative provides an insightful and often over-
looked part of the welfare story. Their narratives suggest that the debate between work-first
and case management philosophies is largely irrelevant because neither perspective
addresses clients’ views of their needs. From the clients’ perspectives, the work-first
approach overlooks their realities. The majority of clients had worked in the low-wage
market in dead-end jobs; they did not want to return to them. In practice, the work-first
philosophy assumes that they have very few obstacles to employment beyond personal
motivation issues and lack of exposure to the world of work. The client’s narratives un-
dermine these theories. The case management/social work approach, on the other hand,
assumes things about clients that are equally untrue. More than stress reduction, clients
wanted quality jobs. The social work approach ignores their need for skill development.
Like the work-first approach, case management assumes that problems lies within the
client and the solution rests with the social worker. The inadequacy of both perspectives
to be useful to clients suggests that an alternative approach is needed.
Policy Implications
It is also no surprise that these organizational clashes emerged within welfare agencies that
were rushing to implement welfare reform and undergoing major organizational and in-
stitutional changes. This case example highlights the emerging conflicts between manag-
ers, line workers, and clients in one setting. It also demonstrates the poor work outcomes
that can result in these programs that are directed and funded by government contracts.
The evidence from this case shows for-profit agencies, such as WorkOpts, caught in
a difficult position. Beholden not just to clients and staff but also to their stockholders,
these programs are driven by financial objectives that encourage them to maximize output
while minimizing expenditures. Therefore, even as they provide services to recipients, they
may have a disincentive to attend to clients’ entrenched employment deficits, such as low
literacy levels and mental health problems. Indeed, they may be motivated to ignore them
completely, particularly in cases where the cost of attending to their clients’ needs is high.
The evidence also shows that state contracts can contribute to the problem or defuse it.
In this case, the performance-based contract exacerbated the problem. These findings show
the folly on the part of the government of rewarding A while hoping for B (Kerr 1975).
Although government administrators profess to value the importance of case management
services, as defined by the one-to-one interaction between worker and clients and the
development of client-centered action plans, financial rewards were linked solely to job
placement outcomes. The contract focused little to no attention on the quality or length of
clients’ employment or on the reduction of their employment barriers.
If not properly stipulated, the external pressures of performance-based contracts
can set up distorted incentive structures for agencies that view welfare contracts merely
as a financial, not service, opportunity—as it did in this case. Facing fiscal and legal
obligations and perpetual resource shortages, program managers operating under this
framework are encouraged to ignore issues of organizational process such as institutional
cohesion, workload distribution, and clients’ needs. Responding to Porter City’s work-first

demands and Headly’s performance pressures, WorkOpts management focused simply on
immediate results. Paradoxically, this myopic attention on job placement produces both
organizational and client failures.
External demands from government contractors can invite job-training programs to
ignore clients’ needs. By tying payment solely to short-term employment outcomes,
government administrators encourage private job-training agencies to pay more attention
to the monetary bottom line and less attention to clients’ needs. Unfortunately, when man-
agers follow this dictum, their actions contribute to internal organizational strife and may
have little effect on clients’ poverty and welfare dependency.
Our results call into question the way privatization of welfare services is currently
executed. National lawmakers contend that the broad ideals of welfare reform policy are to
reduce welfare dependency and move poor families toward self-sufficiency. State and city
administrators and job-training managers are left to translate these lofty goals into practi-
cal reality. However, in the process of implementation, the state and city governments
design welfare contracts that reward welfare-to-work agencies for accomplishing one-
dimensional goals, such as immediate and short-term job placement. Further, these con-
tracts set benchmarks for success so low that job-training agencies are not encouraged to
help clients achieve long-term economic success. Indeed, the actions of the government
encourage job-training agencies to focus their attention to the minute details of satisfying
their contracts. Such actions may actually frustrate recipients already mired in poverty.
Further research can help us disentangle whether these contradictions are inherent and
impossible to overcome in these systems or workable under different types of contractual
arrangements and policy design. Additional investigations may also provide clues about
service approaches that might successfully realize greater work attachment and long-term
client economic stability.
POSTSCRIPT
Headly Inc., WorkOpts’ parent company, hired enough of its own clients to achieve the
contract-stipulated 10 percent success rate and was rewarded by an additional contract to
provide services in a wider area of the city. In the new world of welfare reform, pro-
grammatic failure can mean organizational success.
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