The objective of the project was to develop methods for establishing output and input performance standards for the placement and placement support functions of the United States Employment Service (ES). This part of Volume 2 reports substantive findings and recommendations developed during the course of the project. A key recommendation is that performance standards be used in an Integrated Management System context in conjunction with planning, budgeting, evaluation, and diagnostic tools to improve overall performance. The volume presents findings from an intensive analysis of the internal structure of the Balanced Payment Formula (BPF), the ES performance-based budgeting tool; findings from an analysis of the effects of external economic, policy, and law factors on ES performance; and findings from field tests of data collection and analysis methods to be used for establishing ES input standards. Appended materials include: BPF Formula Tables for fiscal years 1975 and 1976; 1976 BPF Arithmetic Statement; BPF Simulation Results; and other tables. (Author/SA)