CHALLENGES IN THE IMPLEMENTATION OF PERFORMANCE CONTRACTS: A SURVEY OF STATE CORPORATIONS BASED IN NAIROBI

Performance Contracting Strategy in Kenya originated from the perception that the
performance of the Public Sector has been consistently falling below the expectations of
the Public. The government resorted to committing public institutions to transparency and
accountability using performance contracts.
Implementation of this strategy has been challenging to the stakeholders. It is within this
context that this study was initiated to determine the challenges experienced by
employees in the implementation of performance contracting in Kenyan state
corporations.
Exploratory survey was used and a population sample of 35 state corporations based in
Nairobi Kenya was selected using convenience sampling. Descriptive statistics and factor
analysis was used to analyse the data collected.
The study concludes that performance contracting is implemented by state corporations
in Kenya. Management is responsible for drawing performance targets based on the
corporate strategic plan and expected outcomes. However, lack of adequate resources
was rated highly as a major challenge. Policies, systems and structures were also
mentioned as major setbacks. Measurement of performance was not clear to most state
corporations. 51 % declared that they were experiencing many challenges in the
implementation process while 49% had not experienced any significant challenges.

 

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