The impact of performance contracting on organizational performance

Abstract

This study was initiated to determine the effect of performance contracting on organizational performance at the Kenya Revenue Authority. The respondents included 40 top-level managers and middle level managers. In addition secondary data and materials especially from internal documents such as annual reports, Strategic plan-2003-2008 Strategy was obtained The study found that; all those who were aware of the performance contract scheme had already signed their contracts with their reporting officers, performance contract scheme has enabled KRA to significantly increase revenue collection, reduce customer turn around time, define and streamline the reporting and operational structure and make employees committed to their work. On the other hand no link was established between performance contract and performance appraisal and reward to good performance. In general, there is high correlation between employees work, organization objectives and performance contract scheme.