| dc.description.abstract | This paper examines the impact of performance contracts in the financial performance of commercial State Owned Enterprises (SOE's) since they were introduced in 2004. According to Prajapati (2010), there is a widespread perception in Kenya that ever since its independence performance of the Kenyan public service has been deteriorating. This state of affairs has resulted largely from systems of management in government which put emphasis on compliance with processes rather than results. Even when the top leadership of the country wants to deliver results to the citizens, often they are not able to do so.
Usually, there are two main reasons for this; first many government officials are confronted with multiple principals (bosses) with multiple goals (political, non-political, efficiency, equity, etc.) that are often conflicting and they really do not know what is really expected of them. They are unclear about their real responsibilities. In most cases, these officials resolve the trade-offs to serve their personal interests and not the interests of the nation. Secondly, most government official feel they are not responsible for results and thus do not accept the responsibility. It is for this reason that the government of Kenya in 2003, introduced and implemented performance contracts as management tools to create accountability to the public for targeted results. Kenya is one of the few countries to use this approach across the entire pubic sector.
The performance contracts approach shows mixed results with some performance indicators exhibiting growth after the implementation of performance contracts while others declining after implementation of the performance contracts. This paper highlights areas for further research relating to the implementation of performance contracting in commercial State Owned Enterprises (SOE's) in Kenya so as to make them more effective in ensuring the SOE's perform. | en_US |
