EFFECTS OF SELECTED ORGANIZATIONAL FACTORS ON IMPLEMENTATION OF PERFORMANCE CONTRACTING IN GOVERNMENT MINISTRIES IN KENYA

Abstract

Result-based management has been globally acknowledged as having effect on performance contracting. However, there has never been common acknowledgement with regard to effects of organisational factors on performance contracting. The study aimed at investigating the effect of organisational factors, results-based management on performance contracting in government ministries in Kenya. Study intended to achieve the following objectives: to establish effect of government policies on performance planning for implementation of performance contracting, to establish effect of training on performance monitoring for implementation of performance contracting, to establish effects of top management commitment on performance reporting for implementation of performance contracting, and to determine effect of job satisfaction on performance appraisal for implementation of performance contracting. A mixed method type of design was adopted. Stratified sampling was used to sample four government ministries. In sampling staff to be interviewed, top and middle-level management totalling 831 were identified. Thirty per cent of the 831 (249 staff members) considered, to be representative enough. The study adopted descriptive and inferential statistics. Study used ANOVA, regression analysis, and correlation to analyse relationship between variables. Reliability of instruments was assessed using Cronbach‘s alpha coefficient, which alpha value is equal to or greater than 0.70, which is considered sufficient. Content Validity Ratio (CVR) was calculated for each item, and items with a CVR value below 0.99 were eliminated. The final instrument consisted of 22 items with CVR values ranging from 0.99 to 1.00. Findings were: there was strong correlation coefficient of 0.866 at p-value of 0.035 between government policy and performance planning which implied that employees‘ performance planning is significant in implementation of performance contracting; a unit standard deviation increase in effective training and development was likely to increase standard deviation of performance monitoring by 0.096 on implementation of performance contracting; a unit standard deviation increase in top management commitment was likely to increase standard deviation of performance reporting on performance implementation by 0.337 and finally that job fulfilment/ satisfaction had a significant positive effect on performance appraisal for performance contracting at (ß2 = 0.246, p < 0.05). Study concludes that government policies, training and development, top management commitment and job satisfaction have effect on performance contracting in government ministries in Kenya. Study makes the following recommendations: Transfer of training and development be included in next review of policy, top management should support supervisors in setting new targets that will give employees opportunities to practice new skills learned in training