Relational practices and performance contracts in public organizations in Kenya: A case of Kenya revenue authority

Kenya adopted Performance Contracts as a tool not only to improve performance but also torefocus the mindset of the civil service from looking within to focusing on customers andresults. The push factor for introduction of performance contracts in Kenya is the assumptionthat institution of performance measurements, customer orientation and an increased focustowards incremental productivity and cost reduction can lead to improvements in servicedelivery. The purpose of this research was to examine the performance contracts applicationat the Kenya Revenue Authority as well as the efficacy of the instrument in improvingperformance. The main objective was to determine the influence of Performance Contractingprocesses on performance management. The study adopted descriptive design and targeted120 employees of the organization who were based in the Head office; stratified samplingmethod was used.Data was collected using a questionnaire which contained both structuredand unstructured questions. The data was analyzed by descriptive statistics such as mean andstandard deviation. Inferential statistics such as regression was also carried out. The dataanalysis process was aided through a Statistical Package of Social Sciences. The data waspresented using tables and graphs. The study found out that performance contract had helpedimprove service delivery in KRA and that majority of the employees had participated intraining/ sensitization workshop on performance contracting. However there was no clarity inunderstanding how training needs for individual employees were arrived at. The study also established that majority of the employees were not involved in the process ofperformance targets setting. The study concludes that KRA did not involve the employees inall stages of drawing work plans and this led to drawing targets that were not in line withindividual roles. It was also concluded that the follow up by the top management on theimplementation of the set targets was not extensive. The study recommends that theorganizations should establish and adopt performance contract system that provideopportunities to the management in identifying staff training needs, identify performancetargets, and improve employees‘ performance. There is also need for increased training andsensitization programmes and increased involvement of all the employees in the processperformance contracting.