Challenges in the implementation of performance contracts: A survey of state corporations based in Nairobi

Abstract

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