Factors that influence the effectiveness of state and local units of the federal Work Incentive (WIN) program were examined to suggest ways to improve the program, which is designed to move recipients of Aid to Families with Dependent Children (AFDC) into productive jobs. Factors studied were organizational, managerial, and service delivery characteristics and also environmental factors, such as demographic and labor market conditions. Data collected over a two-year period from field research in forty-three local sites and ten states were analyzed to compare high and low performing programs. The main performance measures identified were number of job entries per staff, average job entry wage, retention rate, and average monthly welfare grant reduction. Socioeconomic environment was found to significantly influence performance levels while political-bureaucratic environment was not shown to be associated with variations in performance. High performing state programs were managed differently than low performers, and high performing local units differ systematically from low performlng units in the way they were managed and delivered services to clients. Organizational structure of state programs appeared less important than other factors, but local characteristics were extensively shaped by those at the state level on such issues as program priorities, management behavior, and attitudes toward CETA. Recommendations are presented under the following topics: differentiating high from low performing programs, managerial recommendations, changes in service delivery methods or emphases, and elements of a structured performance improvement program. (JT)