Effectiveness of performance contracting in improving public service delivery: a case of the Kenya School of Government

Abstract

Performance contracting (PC) is a management tool used to improve the efficiency and the effectiveness of organizations. Depending on how organizations implement PC, its effectiveness in improving service delivery may vary. The purpose of this study was to assess the effectiveness of PC in improving public service delivery (PSD). The study was informed by the problem of continued deterioration of performance in the Kenyan Public Service despite implementation of several strategies to address the challenges- including adoption of performance contracting. It was carried out at the Kenya School of Government (KSG), an arm of the public service that serves as a national strategic hub for developing public service leadership and expertise, guided by four specific objectives: to evaluate the effectiveness of PC in driving strategic results at the KSG, to analyze the influence of performance contract dimensions on PSD at the KSG, to assess the challenges in implementation of performance contract at the KSG, and to evaluate customers’ perception of the effectiveness of PC in improving PSD at KSG. Reviewed literature was organized thematically. The study was guided by two theories; the Principal Agent Theory and the New Public Management (NPM) Theory. It was guided by pragmatism philosophy and utilized concurrent mixed research approach. Using Yamane’s formula, a sample of 480 was determined and respondents selected through simple random sampling. Purposive sampling was used to select all the six Directors of the KSG campuses in Kenya. Quantitative data was analyzed using descriptive statistics and presented using tables, charts and figures, while qualitative data was analyzed using content analysis. and presented in themes. For Objective 1, the findings indicated that PC was effective in driving strategic results at the KSG; financial stewardship and discipline and performance of core mandate had (92.8%) affirmation, proficiency in service delivery domains had (86.0%) affirmation, implementation of presidential directives achieved (85.5%) affirmation, while performance in cross cutting areas achieved (71.5%) affirmation. For Objective 2, the findings revealed positive influence of two key dimensions of performance contracts on public service delivery: the application of service delivery innovations (such as development and implementation of ICT strategies at 54.0% agreement; and the resolution of public complaints through various mechanisms including complaint handling mechanisms (CHMs) at 88.1% affirmation, citizens’ service delivery charters (CSDCs) at 89.8% affirmation, and public complaint desks (PCDs) at 89.8% affirmation). The findings for objective 3 indicated that the top challenges relating to strategy, HR, and PC process were lack of effectiveness of strategic management systems, shortage of human resources – both in terms of numbers and essential competencies and lack of incorporation of lessons learned or best practices into the performance contract systems respectively. The findings further revealed challenges emanating from global crises, political interference and government priority shifts. The findings for objective 4 suggested varying levels of satisfaction averaging across various sectors, with a general trend towards satisfaction from course participants in county governments and agencies, and mixed feelings in tertiary institutions and universities. The study concluded that PC remains a pivotal tool in performance management, with its effective implementation ensuring the delivery of high-quality public services. The study recommended that the KSG should align performance goals set within these contracts with the broader vision and strategic objectives of the organization, and that the KSG should establish clear guidelines on how to implement presidential directives. The study will be significant in entrenching PCs in Public Service Delivery systems.