Effect of performance contracting strategy on service quality in public units in Nakuru County

Abstract

Performance contracting is a management strategy which involves management control systems geared towards improving service quality. It is also a contractual agreement to execute a service according to agreed terms, within an established time period and with stipulated use of resource and performance standards. In the past seven years organizations in Kenya have been adopting performance contracting to enhance service quality. The purpose of this study was to examine the effect of performance contracting strategy on quality of services in Public Units in Nakuru County. The target population for the study was 43 Public Units in Nakuru County including; the devolved functions, the non-devolved functions, Sub-Counties and Parastatals. A census study of the 43 Public Units was conducted. The study used structured questionnaire as the main instrument of data collection. Descriptive statistics specially mean, standard and deviation were used to analyze the data. The relationship between elements of performance contracting strategy and quality of service were tested using Pearson’s correlation while the effect of performance contracting on service quality was tested using multiple regression analysis. The study established a strong significant relationship between performance contracting strategy and service quality. The study recommended that the management of the public units should conduct regular reviews of employee performance under the performance contracting paradigm to ensure that quality services were being delivered. Annual reviews could be less effective when trying to ensure better performance and improved standards of service delivery. In addition, it was recommended that a study on the effect of employees’ job satisfaction and service quality delivery to the Public Units County Governments in Kenya should be conducted.