Assessment of the effects of performance contracting on employee productivity in the public sector: a case study of New Kenya Cooperative Creameries Company Limited

Abstract

Performance contracting is regarded as a powerful tool contributing to productivity in work place. Recent research have shown that effective use of performance contract in public organizations have had varied results. Many organizations face different challenges while attempting to enhance employee productivity. This study attempted to establish the effect of performance contracting on employee productivity in the public sector in Kenya. It analyzed the influence of training, promotion, remuneration, discipline and legislation. To achieve this objective, the study adopted a descriptive research design which sought to establish factors associated with certain occurrences, outcomes, conditions or types of behavior. A target population of 90 individuals from the organization formed the basis for the study and stratified random sampling technique was used to arrive at a sample size of 45 individuals. Questionnaires were used to collect Data after which the collected data was edited, coded and entered for analysis. The data was analyzed using descriptive statistics. Statistical Package for social science (SPSS) and inferential analysis was used to analyze the data The findings were presented in pie charts, bar graphs, and tables for clarity. The finding of the study indicated that training, promotion, remuneration, discipline and legislation infltienced employees' productivity. However, while the respondents rated training, promotion and discipline in the organization as good, legislation was rated as fair. The study therefore recommended that the organization should commit more resources to train their employees to achieve better employee performance. It is also recommended that New KCC should embrace employee promotion in terms of position elevation, increased pays and others to encouraged employees to achieve their ambitions and thus enhanced productivity. Also, counseling and other disciplinary action was recommended for employees who fail, so that they remain focused to the organization's bottom-line.