Factors Influencing Implementation Of Performance Contracts In Private Water And Sanitation Companies In Kenya

Abstract

Performance contracting is an agreement between an employer and employee which establishes general goals for the employees, sets targets for measuring performance and provides incentives for achieving these targets. The implementation of performance contracting has been going on in various ministries, parastatals and private companies in Kenya for the past two decades. Despite the fact that many organizations have adopted the performance contracting; most of organizations are yet to deliver exceptional performance as envisaged in the binding agreement between the organization and its employees. Therefore, organizations have had a plethora challenges in achieving the targets agreed upon during the time of signing the performance contracts due to unknown reasons. In this context Water companies have not been spared by these challenges. Top management staff in this organization have failed to explain why the agreed upon targets by the employees cannot be attained despite that enough resources are injected to the system. The study sought to investigate the factors influencing implementation of performance contracts in private water and sanitation companies in Kenya: A case of Embu water and Sanitation Company limited. The study specifically focused on establishing the effect of performance appraisal, employment training and work policies on implementation of performance contract in private water and sanitation companies in Kenya. This study was conducted through a descriptive study design and census sampling method with the population of the study being 137 employees of Embu water and Sanitation Company limited. Data was collected through administration of questionnaires to the respondent with the research instrument first being subjected to pilot study to test for its reliability and validity. Data analysis was conducted using SPSS with Pearson correlation and ANOVA statistics used to test the regression model. Data was presented through tables, frequencies, percentages and charts. The study was completed within one year starting January 2015. The study found that the implementation of performance contract in EWASCO is much effective. Performance appraisal affects the implementation of performance contracts in the Organization; training of employees affects the implementation of performance contracts in EWASCO; workplace policies influence the implementation of performance contracting practices at EWASCO. The study deduces that performance appraisal system, staff training and workplace policies influence the implementation of performance contracting practices at EWASCO. The study also recommends that since performance appraisal system influences performance contracting, the management should devote more time and resources in enhancing the appraisal systems. The employees need to be trained frequently on aspects of performance contracting. The workplace policies in place should be enhanced to facilitate implementation and objectives of performance contract.