Fiscal Federalism, Performance Policies, and Education Reforms: Are States Using Performance Policies to Improve Workforce Quality? BARBARA PATRICK Eastern Michigan University Performance policies aim to use provisions such as competitive recruitment packages, performance pay, outcome-based tenure decisions, and sanction to enhance the quality of the public sector workforce. Federal Race to the Top and No Child Left Behind policies have promoted the adoption of such principles among the states by linking funding to their implementation. While all 50 states have developed performance policies, the policies vary in strength and rigor. This research uses fiscal federalism and other state characteristics to assess factors affecting commitment to performance workforce development policies among the states. It finds that state need and commitment to federal initiatives influence the strength of voluntary state performance policies. It also finds that performance workforce development policies influence the dismissal of underperforming educators and the retention of highly qualified employees. However, a negative relationship is reported between policy strength and the retention of highly qualified teachers. Keywords: Fiscal Federalism, Performance Policies, Education, Public Sector Workforce, No Child Left Behind, Federal Race to the Top, Public Administration, Bureaucracy. Related Articles: Webber, David J. 2010. “School District Democracy: School Board Voting and School Performance.” Politics & Policy 38 (1): 81-95. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2009.00229.x/abstract Roch, Christine, and Amanda Wilsker. 2010. “Do Grades Matter? The Influence of Personal and Collective Assessments of Schools on Political Judgments.” Politics & Policy 38 (6): 1187-1210. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2010.00274.x/abstract Brill, Sam, and Abby McCartney. 2008. “Stopping the Revolving Door: Increasing Teacher Retention.” Politics & Policy 36 (5): 750-774. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2008.00133.x/abstract Politics & Policy, Volume 40, No. 4 (2012): 593-628. 10.1111/j.1747-1346.2012.00370.x Published by Wiley Periodicals, Inc. © The Policy Studies Organization. All rights reserved.