THE EFFECTS OF PERFORMANCE CONTRACTING ON THE PERFORMANCE OF STATE CORPORATIONS IN KENYA
Anne W. Kago - Master of Business Administration (Corporate Management), KCA University, Kenya
ABSTRACT
State Corporation performance is based on the observed overall performance of the public institution while managerial performance is the total enterprise performance adjusted for exogenous factors which are beyond the control of managers. This study therefore aimed at establishing the effects of performance contracting on the performance of State Corporations in Kenya. The study’s specific objectives included: to determine priorities set out in the implementation of performance contracting at State corporations in Kenya; to determine the extent to which performance contracting influences the State Corporation performance of State corporations in Kenya; and, to establish the relationship between performance contracting and managerial performance at State corporations in Kenya. The researcher adopted descriptive survey research design. The target population of this study consisted of all State corporations in Kenya. For the purposes of this study, the sampling frame consisted of all the State corporations listed by the Office of Public Communications as at 31st December 2010. The study employed purposive sampling technique to select thirty five (35) State Corporations which have their headquarters in Nairobi. The data collected was quantitative and qualitative in nature and was collected using a structured questionnaire containing both open ended and closed questions. The questionnaires were distributed by research assistants through ‘drop and pick’ method and in some cases by email. Collected data was edited, coded and analyzed using descriptive analysis such as regression analysis, frequency distribution and measures of central tendency. Statistical Package for Social Sciences (SPSS) was used to analyze the data. The study’s response rate was 71%. Findings indicated that majority of the corporations make it mandatory for employees to sign performance contracts before commencing with their duties and that this has been undertaken by majority of the firms over the last five years. Moreover, findings indicated that performance contracting influenced both enterprise and managerial performance at the State Corporations in Kenya. Findings further illustrated that there was a strong positive relationship between organizational and managerial performance and the implementation of performance contracting. It can therefore be concluded that performance contracting has had a positive impact/influence on both enterprise and managerial performance at the State Corporations in Kenya. The researcher recommends that the signing of performance contracts should be made mandatory for every employee and policy makers, regulators and government in general should be sensitive when drafting performance contracts and enforcing their implementation in State Corporations in Kenya to ensure long-term success in the implementation of performance contracting within State Corporations in Kenya.
