The effect of performance contracting strategy on the Performance of state corporations in the Energy sector in kenya

Abstract

A performance contract is a freely negotiated performance agreement between the Government, acting as the owner of a Government Agency, and the management of the Agency. The use of performance contracts has been acclaimed as an effective and promising means of improving the performance of public enterprises as well as government departments. This study shall focus on the effect of performance contracting on performance of state corporations in the energy sector in Kenya that total ten in number. Despite the availability of extensive existing literature on performance contracting there is no information on the impact of performance contracting on performance of state corporations in the energy sector in Kenya. This study was conducted through a survey research design. In this survey a census was done since data was obtained from the entire population. The survey targeted the implementers of the performance contracting as the population elements. This included the performance contracting staff, head of divisions/sections, and the CEOs. The researcher used both primary and secondary data in order to collect views, opinions, perceptions, feelings and attitudes from the respondent issues regarding effect of performance contracting on performance of energy sector parastatals in Kenya. The data was then coded to enable the responses to be grouped into various categories. The findings were presented using tables and charts. The study concludes that some staffs had signed a performance contract with the energy corporation. Doing the job efficiently was the central theme of the public sector reform. Performance contracting promoted commitment in revenue collection at the energy corporation to a very great extent. There were challenges in the implementation of the performance contracting program in the energy corporations to a moderate extent. The study recommends the government to implement the performance contract at the energy sector. The study recommends the government to structure the PC in a way it will enhance consistency in revenue collection at the energy corporation. The study recommends the government to motivate the staff and encourage them come-up with a new idea/product/service to enhance revenue collection at the energy corporation.