The impact of performance contracting on operational performance in the banking Industry: a case of multinational banks in Kenya
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Date
2008Author
Mohammed, Abdirahman S
Type
ThesisLanguage
enMetadata
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This study sought to determine the extent performance contracting as a control
mechanism impacts operations and service delivery in multinational banks in Kenya; and,
to establish the challenges of implementing performance contracting by multinational
banks in the banks' operations and delivery of service.
This research surveyed all the multinational banks in Kenya whose head offices are based
in Nairobi. A multinational bank is defined as a bank operating in more than one country
with the goal or objective of maximizing stockholders' wealth or the stock price. This
study surveyed the impacts of performance contract in Banks in Kenya using a case study
of multinational banks. Both primary and secondary data was collected for the study. The
data analyzed showed the non-financial performance indicators as well as the qualitative
indicators of performance contracting.
The study results indicated that performance contracts increases performance. It also
revealed that banks have adopted PCs in order to reveal information and motivate
managers to exert effort. Implementation of these measures has improved governance,
transparency, Accountability and operational efficiency in the management of bank
affairs, and as a result, made the private sector is more effective in its delivery of services
as part of its commitment to ensuring efficiency. In this study, the results revealed that
80% of all the banks that adopt PCs have increased growth in terms of turnover. In
addition, the banks that use performance contracts are more likely to retain their
employees than those that do not use. This is because the evaluation is more objective
and hence employees would be more likely satisfied with the results of the evaluation
process.
Citation
MBASponsorhip
University of NairobiPublisher
University of Nairobi School of Business, College of Humanities and Social Sciences