A study examined a series of performance standards issues in the context of employment and training programs targeted toward the Aid to Families with Dependent Children (AFDC) population. Telephone interviews were conducted with representatives from the Job Training Partnership Act (JTPA) and departments of public welfare programs in nine states. These interviews were conducted to describe and document policies and procedures that encourage services for hard-to-employ individuals; existing welfare performance standards and adjustment procedures; key concerns with performance standards management; and major constraints in serving AFDC recipients, including the hard-to-employ. The second phase of the study entailed an assessment of the predictive validity of alternative performance measures that could be used for employment and training programs serving AFDC recipients. Fourteen of the more than 20 separate correlations evaluated were found to be significant predictors of earnings gains and reductions in welfare dependency. Average weekly earnings and average monthly benefit levels measured over the six months following termination were found to be the best predictors of both benchmarks. (MN)