Thesis:

Influence Of Performance Contracting On Organizational Performance In Nandi County Government, Kenya

Performance contracting is a freely negotiated performance agreement between a governments, acting as the owner of public agency. Performance contracting is a management tool for measuring performance against freely negotiated targets and responsibilities of the two parties. The purpose of the study was to investigate the influence of performance contracting on organizational performance in Nandi County Government, Kenya. The study was guided by the following objectives; to determine the effects of target setting an organizational performance in Nandi County Government, Kenya, to establish the effects of vetting and negotiation on organization performance in Nandi County Government, Kenya, to evaluate the effects of execution on organizational performance in Nandi County Government, Kenya and to find out the effects of monitoring and evaluation on organizational performance in Nandi County Government, Kenya. The study was guided by the following theories; new public management theory, Principal Agency Theory and Change management theory. The research study utilized a descriptive research design. The researcher targeted all staff placed under performance contracting in Nandi County government. The study used a census sampling technique. A semi-structured questionnaire and an interview guide were used to collect data. The researcher used Statistical Package for Social Science (SPSS) to analyze collected data and use a descriptive analysis to present the analyzed data. The researcher shall observe ethical consideration as per the laid down procedure in any research undertaking in Kenya. The findings further inform the policy makers in Nandi county government on strengthening management tool for better performance in service delivery. The findings indicated that organizational performance (Y) and target-setting (X1) is 0.72, indicating a strong positive relationship. This suggests that effective target-setting is associated with higher organizational performance. The correlation between organizational performance and vetting and negotiation (X2) is 0.65, showing a moderate positive correlation, meaning better vetting and negotiation lead to improved performance. The correlation between organizational performance and monitoring and evaluation (X3) is 0.58, which also indicates a moderate positive relationship. There are positive correlations among the independent variables (X1, X2, X3), with a stronger correlation between target-setting and vetting & negotiation (0.68).The study revealed that target-setting played a critical role in enhancing organizational performance in Nandi County Government and aligned with the county‘s resources and capabilities .The vetting and negotiation processes were found to be essential in aligning individual performance goals with the county‘s overall objectives. Effective vetting ensured that the performance targets set were practical and relevant, while negotiations involving key stakeholders helped resolve potential conflicts and secured commitment to the targets .The execution of performance targets had a noticeable impact on organizational performance. The successful implementation of targets led to significant improvements in service delivery, such as enhanced infrastructure and more efficient public services. For example, targeted efforts in road construction and maintenance resulted in better transportation networks within the county.