Effectiveness of Performance Contracting in Public Institutions in Nakuru County - A Case Study of the Provincial General Hospital

International best practice shows that governments and global agencies are currently implementing performance contracting to enhance performance of civil servants and entrench good governance and accountability. This research set to establish the effectiveness of performance contracting (P. C) in the government institutions this far. The study used a descriptive design. It used both quantitative and qualitative approaches in the research. Questionnaires were the tools used. This was a case study of the Provincial General Hospital in Nakuru County. Purposeful sampling and random sampling procedures were used. The target population included all the staff working at the Provincial General Hospital, the Management Staff, Middle level and even orderlies. Particular department were sampled out purposefully, and then from each sampled department, ten subjects were sampled randomly. In order to test the reliability of the instruments a pilot study was done in two other departments which were not included in the sample. The filled up questionnaires were subjected to Cronbach test for reliability score of above 0.7 co-efficient. Validity of the instrument was ensured through the assistance of the university supervisors. Qualitative data was obtained from the open ended items which were analyzed methodically. The responses formed the themes for analysis. Quantitative data was analyzed for descriptive statistics (percentages and frequencies). Statistical Package for Social Sciences (SPSS) computer software version 21.0 was used for analysis. Pearson Product Moment Correlation (r) value was computed to determine the relationship between independent variables) and the dependent variable). The study established that indeed performance contract was critical for service delivery. The effectiveness of the implementation of PCs in public institutions depended on the knowledge of the employees and managers on the content of the performance contact and extent of the work done in relation to the performance contract. It was recommended that the government and the leadership of the various government institutions embark on capacity build to enlighten the employees on the genesis and implication of performance contracting. The well performing employees should be rewarded and the uncooperative to face strict penalties. Further research in other government institution was also advised to shade more light in the study problem.