Determinants of Implementation of Performance Contracting: A Case of Makueni County Government

Abstract

Performance contracting is a performance tool that has been implemented in many countries globally and implemented in Kenya for the first time in 2004. It has proved to be a useful tool for performance improvement in both private and public sector. The purpose of this research was to establish determinants influencing implementation of performance contracting in Government of Makueni County.Specifically, the study aimed at establishing how organization effectiveness, building human resource systems, knowledge management and performance appraisal management system determined implementation of performance contracting in the county. The study analyzed experiences of performance contracting in global context, African perspective, Kenya scenario and local adoption in County Government of Makueni. The study wasanchored onGoal-path theory, Resource Based View theory, Two Factor theory, and Transformational leadership theory. The study adopted mixed designs including explanatory design to link the variables and establish the general relationship of the independent and dependent variables on implementation of performance contracting. The target population for this study was300 employees out of which72 were sampled for the purposes of this study.The researcher collected data from all the 72 respondents.The researcher used both closed and open- ended questionnaire to collect data. The questionnaires were dropped and picked from the respondents and the researcher administered the process. The analysis was conducted using Statistical Packages for Social Sciences (SPSS)to produce both descriptive and inferential results. Themajor findings were presented using tables whichrevealedhuman resource directorate was not proactive enough to spearhead the process of implementation of performance contracting. Further findings established that there was lack of knowledge management where no benchmarking hadbeen done before embarking on the process. Lack of reading material on performance contracting also influenced the process. Negotiations before signing contracts were lacking and employees were not motivated by setting achievable targets by appraising them quarterly, that is after every three months with feedback from supervisors. The recommendations from the study included benchmarking, putting in place guidelines and policies to guide the process, training champions to spearhead the process and using appraisal tool which is simple to understand by both top and lower level employees.