This report extends the results of an earlier NCRVE study, Improving Perkins II Performance Measures and Standards: Lessons Learned from Early Implementers in Four States, published in 1994, on the use of performance measures and standards to suggest principles for designing outcome-based program improvement systems in light of current efforts to reform the U.S. workforce education system. At the time this project was undertaken, states were actively involved in implementing the Carl D. Perkins Applied Technology and Vocational Education Act of 1990 (Perkins II), and educators and policymakers were anticipating the reauthorization of the legislation in 1995. However, the policy environment has changed; other options such as consolidated block grants for education and training are receiving increasing attention. Although in its details the present document reflects an emphasis on Perkins II, in its general principles the report should be of interest to federal policymakers engaged in developing new education and training policy initiatives. A companion RAND Issue Paper, Accountability and Workforce Training (Stecher & Hanser, 1995), discusses the implications of this study and related research on accountability in a non-Perkins environment.