Based on the experiences of a job training demonstration project in five hospitals, the handbook describes a rationale and approach for using hospitals (rather than sheltered workshops) as job training sites for mentally and physically disabled persons. Part I reviews advantages for the hospital, the disabled person and his family, the rehabilitation community, and the taxpayer. The demonstration project is placed in historical perspective, and such issues as employer prejudice and opportunities for participant advancement are discussed. Part II outlines a five-step program implementation model: (1) obtaining hospital agreements to participate; (2) paving the way to begin (obtaining Department of Labor certificates, hiring site supervisor, preparing hospital staff, clarifying agency roles, and identifying and analyzing jobs); (3) bringing trainees aboard (referrals, interviews, selection, and placement, close supervision to prevent early failure, and determining compensation); (4) conducting on-the-job evaluation and training (including adjusting wages and monitoring coworkers' reactions); and (5) moving people to long-term employment. Part III describes costs and benefits to the individual and employer, cost effectiveness in relation to alternative job training, and ongoing mechanisms for cost-benefit analysis. Samples of practical tools such as letters of agreement, job analyses, and compensation formulas are included throughout. A glossary of about 35 terms is provided. (JW)