Effect of Performance Contracting Practices on Performance of Public Health Institutions in Nairobi and Kiambu Counties, Kenya

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 institutions in Kenya. Despite the availability of extensive existing literature on the effect of implementing performance contracting in various public sectors in Kenya, there is no information on its implementation effect on the performance in the health sector in Kenya. The research was an 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 to determine the effect of PC agreement; the effect of PC appraisals and the effect of PC awards & sanctions on organizational performance of public health institutions in Kenya. The target population and the sample size were all the public health institutions in Nairobi and Kiambu Counties. The study adopted census inquiry. The study used a Likert type 5-scale questionnaire to collect quantitative primary data. The Secondary data was obtained from the documentary analysis of the existing customer/employee satisfaction survey reports, analysis reports on service charters and customers complains/complements, staff performance appraisals and ISO audits findings. Data was analyzed using descriptive statistics (graphs, charts, tables) and inferential statistics, the multiple regression model. There was a positive influence of performance contracting agreement, appraisal and awards & sanctions. From the multiple regression model, all the predictors accounted for about a third of the variation in organization performance in health sector. There was a significant effect of performance contracting agreements and awards & sanctions on organization performance, but performance appraisals do not. The adoption of performance contract in health sector has enhanced the ability to discharge duties through the setting substantial Hospital's PC targets. The evaluation feedback mechanism & information was normally industrious, with performance monitoring, evaluation & appraisal mechanisms timely for corrective/review measures. The reward and sanction system for individual staff performance in the hospital was fair. It's recommended that the government policy makers develop effective and more efficient performance appraisal programs in order to enhance health sector performance, device ways to continuously improve and expand the scope of PC's agreements and award and sanctions policies, improve the health workers' remuneration and their general welfare and incorporate Public-private/NGOs partnerships in order assist in provision of medical  facilities and equipment to  bridge the  government's budgetary gap. The scholars are 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.