| dc.description.abstract | Performance contracting is one of the key planks of the new public management (NPM)
reforms aimed at improving public administration and service delivery in the public sector.
The NPM reforms have now become a global phenomenon as various countries have adopted
them to address the bureaucratic characteristics of inefficiency, red tape, lack of flexibility,
ineffective accountability and poor performance that bedeviled delivery of public service in
the past. The devolved management style underpins performance contracting where emphasis
is management by outcomes rather than management by processes. A performance contract
defines the objectives and sets criteria and targets to be achieved by a Government agency.
The Government of Kenya recognized the need to reform the public service in the late 1980's
and tried various approaches including right sizing, privatization and restructuring, but
achieved little success mainly due to the fact that these reforms were largely input or
compliance based. Performance contracting was adopted as a results-based management
system in 2003 and by 2005, most state corporations, including Kenyatta National Hospital
(KNH), were put on performance contracting.
This study undertook to analyze how performance contracting is being applied at KNH and
bring out the successes and challenges experienced and measures being taken to address the
challenges. The scope of the study covered three performance contracting cycles, 2005/06 to
2007/08. The study was conducted as a case study involving personal in-depth interviews
with seven selected senior managers. A structured interview guide was used to collect primary
data. - From the research findings, the broad categories of performance evaluation were identified by
the national Performance Contracts Steering Committee (PCSC) based in the Office of the
Prime Minister. Four generic performance criteria were identified by the PCSC for noncommercial
state corporations in 2005/06, namely, financial, non-financial, operations, and
dynamic/qualitative indicators. In 2006/07, the PCSC expanded the performance evaluation
criteria to include service delivery as a distinct criterion.
There were mixed outcomes in achievements in performance during the three years covered
by this study. Both financial and non-financial indicators have had a lack lustre performance.
On the other hand, good results were achieved for service delivery, operations and
dynamic/qualitative indicators.
The implementation of performance contracting has faced a number of challenges. These
included introduction of the concept in the hospital with little or no awareness among the
management and other staff, low teamwork, lack of empirical baselines for determination of
performance targets and identification of performance indicators without appropriate
measuring tools. Other challenges identified were resource constraints, inadequacy of
management information system, inadequate incentives/sanctions system, an obstructive
organizational culture, and reneging of the Government on her commitments. Some of the
measures put in place to address the challenges include training of selected staff to create a
critical mass to deepen the concept in the hospital, deliberate approach to improve teamwork
and realign the organization structure to the new paradigm shift, prioritized activity-based
resource allocation and enhancement of the management information system among others.
The researcher discerns that performance contracts have the potential to overcome a
substantial number of barriers to efficiency and effectiveness in service delivery. To realize
this, the researcher recommends that KNH will have to deepen the performance contracting
concept more widely, realign organizational culture to the new expectations and enhance
management information systems. Commitment of the parties to their obligations and more
rational utilization of resources through effective prioritization are critical.
The main limitations of the study were resources. The time period covered by the study was
short and the researcher narrowed the number of respondents for the study to fit in the available time-frame. Collaborative or divergent inputs through interviews from the other
arms of Government was not obtained hence secondary data was relied on. Again the study
did not control for other factors that may have affected the outcomes achieved.
For further research it is suggested that a study be undertaken to determine to what extent
performance outcomes relate to the implementation of performance contracting while
controlling for other factors. Given that performance contracts were introduced to address the
perception of customers that service delivery was not in line with their expectations,
perceptual studies may be carried out in the hospital to gauge patients' views on changes in
service delivery following the adoption of performance contracting. | en |
