The first objective of a two-phase project was to clarify the policy rationale and intervention model for state-financed workplace-based retraining programs in terms of their two objectives of retaining jobs and preventing unemployment. The second objective was to develop: (1) an evaluation system for these programs that was composed of business screening guidelines for targeting investment and minimizing substitution effects; and (2) a performance outcome system for measuring program outcomes that are necessary to achieve these two program objectives. In phase one, the project reviewed California's Employment Training Panel and Illinois' Prairie State 2000 Authority and determined that a successful training project should result in these performance outcomes: training objectives, work unit performance, company performance, and trainee earnings. Based on this intervention model, the first phase of the project also developed business screening guidelines that would maximize the effects of training projects on program objectives and minimize substitution problems. The second phase of the study evaluated the feasibility of implementing the evaluation model in four state-financed, workplace-based retraining programs and examined 24 case studies from California, Illinois, Missouri, and New York. The project showed the feasibility of a state evaluation system and made recommendations for a 3-year implementation plan. (Appendices include the following: (1) descriptions of the four state programs; (2) sampling design and methodology; (3) impact evaluation of retraining programs; and (4) 15 references.) (KC)