A survey of factors influencing success of performance contract implementation by the public corporations in kenya

Abstract

Recent studies have found that the results of performance contracting so far have been “mixed”. In some countries there has been a general and sustained improvement in public enterprise performance while in other countries some public enterprises have not responded or have been prevented by government policies from responding. A World Bank study of twelve public enterprises which had been subjected to performance contracting showed that efficiency increased in three cases and remained the same or deteriorated in the other nine cases. Analysis showed that failure was attributed to lack of information, lack of incentives and lack of commitment among others. The current study aimed to contribute to the understanding of the factors that determine the success of performance contract implementation by the state corporations in Kenya. To achieve this objective, data were collected through a survey from fifty state corporation representing different sectors which had signed performance contracts during the year 2006/2007. The corporations were picked randomly from each stratum. Data was collected using a structured questionnaire which was administered through e-mail and drop and pick later basis. Responses were received from thirty eight state corporations giving a 76% response. The current study showed that 95% (21) of the factors presented were important in influencing the success of performance contract implementation. With regard to the extent to which the factors influenced the success of performance contract implementation during 2006/2007 contracting period, only eighteen factors were considered as having contributed to the success of the performance contract implementation. These factors should be fully integrated in performance management systems. Of importance is evaluation of more state corporations in the country in future to determine the effect of individual factors in performance contract implementation. Then these factors can be adopted across the board in boasting performance of public and private sector in the country