Review of impact performance contracts on public sector performance (case of Kenya Ports Authority)
This study was on the review of impact of performance contracts on public sector performance and was carried out in Kenya Ports Authority Mombasa. The aim of the study was to review the impact of use of performance contracting on performance. The objectives of the study were to establish the procedures used to introduce performance contracting in the organization, to examine the implementation of performance contracting, to establish performance in the organization; and consequently establish the effect of use of performance contracts in the organization. The findings of the study are meant to be of benefit not only to the employees and management of the organization but also to the government of Kenya and future researchers in monitoring of performance contracting. The study was carried out in the Kenya Ports Authority (K.P.A) headquarters in Mombasa, where mostly this practice was introduced and where most managers of the organization are based. Several authoritative sources of literature were reviewed to establish a historical background and growth of the practice of performance contracting. The literature reviewed indicates that performance contracting is a very current and fashionable approach to reform state owned corporations which has been successful applied in many parts of the world. The study was carried out using descriptive study design and exploratory design. The population consisted of 1154 members of management cadres in the organization, out of which a sample of 120 was selected for study using stratified sampling method. Data was collected using questionnaire and interview. The collected data was analysed using descriptive techniques and the findings presented using both qualitative and quantitative approaches. The study established that the organization has operated with a strategic plan since 2001 and it went into performance contracting in 2004. A large number of respondents who have long service in the organization were positive about the change. The top-down approach was used to introduce performance contracting with government agents leading the way into how to do it. There were elaborate preparations in place to introduce the approach including sensitisation and training of managers. The managers were involved in negotiations that' led to the drawing of the terms in the performance contracts. However a key challenge was to agree on performance indicators and the weighting of the factors in an organization that had already implemented a strategic plan. The implementation of performance contracts has resulted in strengthening of corporate governance/reduction of accidents, improvement in revenue and enhancement of customer satisfaction index. This study makes a strong recommendation that future research in the same areas is needed and especially covering a wider range of state corporations.