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Situational assessment was used to predict employment outcomes for 77 individuals attending a community psychiatric rehabilitation program. The assessment form was a 22-item checklist comprised of four dimensions: work readiness, work attitudes, interpersonal relations, and work quality. Ratings were made in two work settings: prevocational work crews and transitional employment. Situational assessment predicted outcome better than did work history. Staff ratings were significantly higher for members working in transitional employment, although ratings made in both settings were predictive of later employment outcomes. It was concluded that Situational assessment may be a method better suited for screening out members who have poor work potential than selecting members who will definitely succeed.