Management perception of the influence of performance contracting on performance of Kenya reinsurance corporation limited
Performance contract is a freely negotiated written contract between the government as owners and managers of the public entity as agents of the government to achieve agreed results within a given time period. The major focus for performance contracting is attainment of results. It is largely perceived that implementation of performance contracting has led to significant improvements in the performance of the public sector which has led to its adoption by many governments around the world including the Kenyan government. The general objective of this study was to establish managements’ perception of the contribution of performance contracting to performance of Kenya Reinsurance Corporation Limited as well as the factors that influence their perception. The study adopted a census survey design where the population of study comprised of members of management at Kenya Reinsurance Corporation Limited. Primary data was sourced through a structured questionnaire. The study established that implementation of performance contracting has greatly enhanced the level of accountability for performance at the entity. Management of Kenya Reinsurance Corporation Limited strongly perceive that performance contracting has led to significant improvement in financial performance, service delivery and welfare enhancement with the highest influence being on financial performance at a perception index of 82% with service delivery having the lowest perception index at 76%. On the specific indicators, performance contracting is perceived to have the greatest influence on revenue growth and profitability with the least influence being on eradication of corruption, enhancing creativity and promoting faster service delivery. The factors identified to have the greatest influence on management’s perception were identified as management and leadership in the performance contracting process, extensive communication in the process as well as being involved in establishing targets under performance contracting. Another factor that plays a significant role is the ranking system adopted by government which promotes increased commitment to the process. This study recommends that Kenya Reinsurance Corporation should consider reinforcing its service delivery indicators and targets under performance contracting specifically to promote faster service delivery and enhance innovation. This is essential given that the organization is in the insurance industry where competition is tilting more and more towards service delivery and innovation of new products. It is recommended that further studies be done on Management of other public sector entities in Kenya. Additional studies may also be done to establish the influence of personal traits on perception of the contribution of performance contracting to performance.