| dc.description.abstract | Global trends in globalisation, liberalization and deregulation have led to sustained
pressure from the citizenry demanding better services by public sector enterprises thereby
forcing governments to initiate public sector reforms especially in developing countries.
Most economies have responded to these threats by privatizing public enterprises. But
where privatization as an alternative public sector reform strategy is not feasible or
palatable, some developing country governments have sought to improve performance by
negotiating performance contracts with the managers of public enterprises. Whereas
performance contracting has been successful within the private and public sectors in most
developed countries, experiences within the public sector in developing countries have
been marked with mixed results. This has been due to country and industry specific
environments.
Kenya Power and Lighting Company Ltd is public utility company operating In a
monopolized power distribution industry in a developing country. It was among the
public enterprises subjected to performance contracts by government in October 2004.
The study sought to determine the processes, procedures and techniques adopted by the
company in implementing performance contracting concept in public sector and the
challenges encountered. It also sought to establish the employees' experiences and
perceptions of the process.
The study was a descriptive research that targeted all the 1508 management staff who
undertook performance contracts within the first cycle of its implementation. A stratified
random sampling method was used. A sample size of 250 employees was selected. Two
different sets of questionnaires were used. One set was administered to corporate level
executives and the other to management staff depending on whether they were involved
in conceptualising the concept or just experienced it during implementation. A response
rate of 84% was achieved. The data collected was analysed using descriptive statistics.
The study findings indicate that majority of respondents were male, of the level of middle
management, had graduate degree education, had worked with the organization for
between 5 to 10 years and on permanent terms of service.
Major research findings show that the process was moderately successful with the
government, customers and other stakeholders moderately involved though customer and
employees surveys were not done regularly. Although the organization structure
supported the process, existing performance culture and behaviour inhibited it while the
reporting structure were not reformed adequately. Performance incentives were also not
motivating since employees were not aware of them at the time of signing the contracts
while the mitigating circumstances were also moderately factored into final performance
assessments.
Performance evaluation system moderately attempted to balance between financial and
non-financial measures as the company attempted to adopt a conceptual performance
framework incorporating both private sector 'best practices' and the government's
generic signaling type of performance contracts. The process also only moderately
achieved the establishment of a performance accountability atmosphere.
The major challenges to the process included resistance to change by employees and
managers, internalization of the new concept of performance contracting, development of
a conceptual performance framework, lack of buy-in and lack of autonomy and
empowerment. Of critical importance was the subjection of the Company to the State
Corporations Act and Public Procurement Procedures, which affected the company's
corporate autonomy and its ability to procure and provide resources to employees ill
order to meet their performance contract targets. The main limitation to the process was
that the Company had just undergone one cycle of implementation of the concept. | en |
