A study assessed effectiveness of Workforce Investment Act (WIA) of 1998 performance measures. Data were from a survey of WIA program administrators in 50 states; visits to 5 states; interviews with labor officials and national associations representing state and local workforce development officials; and a document review. Findings indicate states and localities took action to implement WIA performance measures, but faced challenges. States had to change the way they collected and reported performance data. Other challenges were due to states' respective complexity and resource demands and the need to develop procedures to access sensitive records. States believed performance levels were set too high. Many reported performance levels may determine who receives WIA-funded services. When fully implemented, measures may not accurately assess performance because data are not comparable across states or timely. Challenges in using unemployment insurance (UI) wage record data also may affect accuracy and comparability of performance data. Existing performance measures failed to gauge overall one-stop performance. Recommendations were made to postpone implementing financial sanctions, expedite developing criteria for renegotiating performance levels, more clearly define policies and measures, and develop ways to address challenges in using UI data. Appendixes include a list of performance measures and written comments from the Department of Labor concurring with the report's findings and recommendations. (YLB)