DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 37-99
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Director Unemployment Insurance Service
SUBJECT	:	UI PERFORMS Tier I and Tier II Performance Measures, and Minimum Performance Criteria for Tier I Measures

1. Purpose. To disseminate the performance measures that will be used to assess program operations and plans for program improvement, establish the minimum performance criteria for Tier I measures and their effective dates, and discuss the relationship of the Tier I and Tier II measures to the State Quality Service Plan (SQSP) process.

2. References. Unemployment Insurance Program Letter (UIPL) No. 41-95 (August 24, 1995), UIPL No. 19-98 (March 30, 1998), UIPL No. 34-98 (July 23, 1998), UIPL No. 4-99 (October 20, 1998), and Federal Register notice (FRN) 63 FR 63544 (November 13, 1998).

3. Background. The State-Federal Performance Enhancement Work Group (PEWG) established the outlines of the UI PERFORMS system for promoting continuous improvement in UI operational performance and identified performance measures for the performance management system. Ten of these measures were designated "Tier I" measures, for which uniform national criteria representing minimum levels of acceptable performance would be established.

   UIPL No. 41-95 provided a detailed description of the UI PERFORMS system and solicited comments on the proposed system from State Employment Security Agency (SESA) administrators.

   UIPL No. 41-95 included:

   • A discussion of the principles of the State and Federal partnership, including the roles and responsibilities of each party.
     
   • The identification of key performance measures, which were designated as either Tier I or Tier II measures.
   
   
   • Ten Tier I measures were identified. These measures represent core or critical areas of UI customer service for which uniform national criteria would be established. States would address their performance for the Tier I measures annually through the SQSP.
     
   • The Tier II measures were established for other important UI activities. States would report performance data on a regular basis to the Department of Labor; however, no performance criteria were established for Tier II measures. States would set performance targets for the Tier II measures in consultation with the Federal partner and plan for performance improvement through the SQSP process. The Tier II measures are listed in the Attachment.
   
   
   • A general description of the continuous improvement, "Plan-Do-Check-Act" cycle, and a detailed discussion of the SQSP and the planning process, including the plan narrative, quantitative displays of performance data, and criteria to identify performance needing improvement.
     
   • A discussion of Federal oversight, including technical assistance, financial assistance, rewarding State accomplishments, and actions to improve performance. This last activity includes the development of corrective action plans by States that fail to meet the minimum performance criteria, and conformity/compliance actions to address exceptional instances of continued failure to meet minimum levels of performance.

   The PEWG's successor, the Performance Enhancement Group (PEG), ratified the performance criteria principles established by the PEWG. These principles were included in UIPL No. 4-99. PEG materials related to the establishment of performance criteria for the Tier I measures were provided in UIPL No. 19-98, and UIPL No. 34-98 described the process for establishing the performance criteria.

   The PEG also deferred setting a criterion for one of the ten Tier I measures, cashiering timeliness, until a data collection methodology can be developed for that measure that can be applied uniformly by all States.

   The PEG established three workgroups -- Appeals, Benefits, and Tax -- to develop recommendations for the criteria for the nine other Tier I measures. Each workgroup included Federal staff from the National and Regional Offices and representatives from at least two States. The PEG developed guidelines for the workgroups to follow in developing their recommendations.

   The workgroups' reports were presented to the PEG at its meeting in Washington, DC, on September 28-30, 1998. The PEG reviewed the workgroups' recommendations, both in terms of the individual Tier I measures and in light of their cumulative burden, and recommended appropriate adjustments.

   UIPL No. 4-99 disseminated the proposed criteria and solicited the comments of the SESA Administrators. The November 13, 1998 FRN disseminated the proposed criteria and provided a 60-day period for public comment on the proposed criteria.

   A total of 26 States submitted comments in response to UIPL No. 4-99. Six States submitted comments in response to the November 13, 1998 FRN. However, the comments of three of these States were the same as the comments these States submitted in response to the UIPL. In addition to the States, two public interest groups submitted comments in response to the FRN.

4. Definitions, Criteria, and Effective Dates.  Tier I criteria will be used to assess State performance beginning with the SQSP cycle shown in the following Tier I performance measure table. States which do not meet minimum performance criteria which become effective in fiscal year (FY) 2002 (or later) will be required to submit plans identifying the steps the State will take to achieve those criteria, and must demonstrate progress toward meeting them. However, the Department of Labor will not initiate formal action if State performance fails to meet a new criterion prior to its effective date, provided the Department of Labor has received and approved a satisfactory corrective action plan and evidence of continuing progress in its achievement.

   State performance assessment is discussed in detail in the State Quality Service Plan Handbook (ET Handbook No. 336, 16th Edition).

5. Periodic Review and Affirmation or Revision. The Department of Labor is committed to reviewing performance measures and criteria periodically, as agreed to by the PEWG and affirmed by the PEG. Final determination of the criteria for the two current Secretary's Standards -- first payment timeliness and lower authority appeals timeliness-- will occur in conjunction with proposed UI PERFORMS rulemaking. The first periodic review of the full set of Tier I measures will occur not more than five years from the date of issuance, with the exception of the criteria for nonmonetary determinations timeliness, nonmonetary determinations quality, and new employer status determinations accuracy, which will be reviewed after two years. The reviews will include all State performance data for these measures available at the time of the review.

6. Action Required. SESA Administrators are requested to provide this information to appropriate staff.

7. Inquiries. Please refer inquiries to the appropriate Regional Office.

8. Attachment.  UI PERFORMS Tier II measures.