Effect of performance contracting practices on performance of public health institutions in Nairobi and Kiambu Counties

Abstract

The use of performance contract as a performance strategy has been acclaimed as an effective and promising means of improving the performance of public sector. The objective of this study was to explore on the effect of the Government’s performance contracting strategy on the performance of public health institutionsin Kenya. Despite the availability of extensive existing literature on the effect of implementing performance contractingin various public sectors in Kenya, thereis no information on its implementation effecton the performance in the health sector in Kenya. The research wasan explanatory survey;since it’s aimed at describe the state of affairs as they exist at present and why. The specific objectives of the study were todetermine the effect of PC agreement; the effect of PC appraisals and the effect of PC awards andsanctions on organizational performance of public health institutions in Kenya. Thetarget population and the sample size wereall the public health institutions in Nairobi and Kiambu Counties. The study adoptedcensusinquiry. The study useda Likert type 5-scale questionnaireto collect quantitativeprimary data. The Secondary data wasobtained from the documentary analysis of the existing customer/employee satisfaction survey reports, analysis reports on service charters and customers’ complains/complements, staffperformance appraisalsand ISO audits findings. Data wasanalyzed using descriptive statistics (percentages, means and standard deviations) and inferential statistics(PearsonCorrelation and Multiple Regression Analysis).There was positive influence of performance contracting agreement,appraisal and awards andsanctions. From the multiple regression model, allthe predictors accounted for about a third of the variation in organization performance in health sector. There wassignificant effect of performance contracting agreements,appraisalsandawards andsanctions on organization performance. Adoption of performance contract in health sector enhances the ability to discharge duties through thesetting substantial Hospital’s PC targets. The evaluation feedback mechanism andinformation was effective, with performance monitoring, evaluation and appraisal mechanisms timely for corrective/review measures. The reward and sanction system for individual staff performance in the hospital was fair. The study recommends that public health institutions adopt PC strategy to improve their organizational performance. The government policy makers develop effectiveand more efficient performance appraisal programsin order to enhance health sector performance. Policy makers should device ways to continuously improve and expand the scope of PC’s agreements and award and sanctions policies. Lastly, the government should improve the health workers’ remuneration and their general welfare and incorporatepublic-privatepartnerships in order assist inprovision of medicalfacilities and equipment to bridge the government’sbudgetary gap. The scholarsare advised to research on other factors which influence performance in health sector and also the effect on performance of the other performance indicators as contained on the standard GoK contract.