The purpose of this guide is to provide state and local Job Training Partnership Act (JTPA) program administrators with an approach to developing meaningful and relevant negotiated performance standards that will serve as a management and evaluation tool. The guide is organized in four chapters. Chapter I provides background information on the legislative and administrative history and evolution of performance standards. It provides an overview of the performance standard system as set forth by the U.S. Department of Labor and discusses performance standards within the context of overall program management. Chapter II examines performance standards as an integral part of the program planning process. It reviews the functions of strategic and operational planning and the ways that program officials can select their strategies to meet local needs and circumstances. Chapter III provides the framework for a negotiated approach to setting performance standards and examines the Department of Labor's adjustment model, its major limitations, and the key issues for undertaking a negotiated approach. Chapter IV focuses on the negotiation process, discussing several important issues that states and service delivery areas (SDAs) must resolve when negotiating their performance standards. These issues include establishing the basis for negotiation; developing tools for further quantifying adjustments to the model-predicted performance scores; negotiation and its relationship to 6 percent incentive funds; establishing a framework to support a negotiation process; and state and SDA roles in establishing a negotiation process. (KC)