Influence of Performance Contracting on Organizational ...seahipaj.org/journals-ci/mar-2017/IJIDPS/full/IJIDPS-M-3-2017.pdf · 43 Influence of Performance Contracting on Organizational

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Influence of Performance Contracting on Organizational

Performance of Public Universities in Kenya: A Case of

Jomo Kenyatta University of Agriculture and Technology

Rose M. MAKEWA

1 & Dr. Susan WERE

2

1M.Sc Scholar Human Resource Management, Jomo Kenyatta University of Agriculture and

Technology, Kenya 2Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya

ABSTRACT

Performance contracting is a management strategy which uses feedback loops to achieve desired

goals. The study sought to establish the influence of performance contracting on organizations

performance in the public Universities in Kenya with reference to Jomo Kenyatta University. The

study determined the effect of negotiation, the impact of top management, effects of targets settings

and effect of monitoring and evaluation on organizational performance of Jomo Kenyatta University.

The study was carried out on 110 chairpersons of departments at the University. Data collected was

analyzed through combination of both descriptive and inferential statistics. Descriptive statistics were

used to describe the manifestations of variables in the data collected. Simple regression analysis was

used to examine the extent to which the dependent variable is a function of independent variable. Data

was presented through tables, pie charts and diagrams. R is the correlation coefficient which shows

the relationship between the study variables, from the findings is notable that there exists strong

positive relationship between the study variables as shown by 0.800. According to the four

independent variables studied, they explain only 64.00% of the organizational performance in public

universities. This implies that these variables are very significant therefore need to be considered in

any effort to enhance organizational performance in public universities in Kenya. The study therefore

identifies variables as critical factors of performance contracting on organizational performance in

public universities. the study found out that when all independent variables (Negotiation, Top

Management Commitment, Target Setting, Monitoring & Evaluation) are kept constant at zero the

Organizational Performance In Public Universities will be at 22.876. At one unit change in

Negotiation will lead to 0.644 increases in Organizational Performance In Public Universities Also a

one unit change in Top Management Committee will lead to 0.593 increases in the Organizational

Performance In Public Universities. Further, a one unit change in target setting will lead to 0.503

increases in the Organizational Performance In Public Universities and one unit change in Monitoring

& Evaluation will lead to 0.482 increases in Organizational Performance In Public Universities This

concludes that target setting contributes more to Organizational Performance In Public Universities.

Keywords: Performance contracting, Public Universities, Organizational Performance

INTRODUCTION

The concept of performance contracting has its origin in France in the late 1960s. It was developed

with a great deal of elaboration in Pakistan and Korea. Government all over the world have viewed

performance contracting as a useful vehicle for inculcating clear definition of objectives and

supporting new management monitoring and control method while at the same time leaving day today

management to the human resource managers. It was aimed at improving efficiency and effectiveness,

while reducing total costs (AAPAM, 2005).

Performance contracting which is interchangeably used with results based management is a

management strategy which uses feedback loops to achieve desired goals. It is perhaps the most

International Journal of Innovative Development & Policy Studies 5(1):43-64 Jan.-Mar., 2017

© SEAHI PUBLICATIONS, 2017 www.seahipaj.org ISSN: 2354-2926

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central feature of public sector reforms which lays greater emphasis on improving performance and

ensuring employees receive desired results. These reforms have been characterized by adoption of

private sector practices management of public affairs by introducing financial and non- financial

controls of improving organizational performance.One of the pillars of public sector reforms is the

introduction of performance contracting, once partners negotiate and mutually agree to a set of targets

through a performance program then implementation starts and monitoring becomes an essential part

to ensure results are being achieved (Njoroge, 2015). Monitoring and evaluation provide invaluable

information for decision – making and lessons learned for the future. According to Armstrong (2006),

is defined as a systematic process for improving organizational performance by developing and

maintain the performance of individual and teams. It is a means of getting better results from the

organization teams understanding and managing of performance within agreed frame work of planned

goals, standards and competencies requirements.

The Kenya government policy paper (2005) indicates that performance contracts belong to a branch

of management science and is a freely negotiated agreement between government acting as the owner

of the operation and a contracting authority. Barney (2006) observed that organizational performance

may be explored based on the notion that an organization is an association of productive assets who

voluntarily come together to obtain economic advantages, organizational performance may be defined

through comparison of the value that an organization creates using its productive assets with the value

that owners of the assets expect to obtain.

Ducker (2006) has observed that an organization can be liked to a transmission that converts all

activities to performance. He notes that effective organization management results in effective

organization performance which is regarded as a balance of a variety of needs and goals. This

involves the consideration of organization objectives whose success will affect the survival and

prosperity of the targets towards the realization of effective performance in organization.

The Kenya government in the year (2004) introduced performance contracting scheme in the state

corporation. Rob (2006) observes that the productivity of an organization is influenced by its ability to

maintain a competitive position in its organization activities. Productivity may be seen as a measure

of the quantity and quality of work done as compared to the cost of resources used, therefore

performance contracting role is to enhance service performance and organizational improvement.

Global Perspective of Performance Contracting

Performance contracting as a management tool was originally developed by private enterprises but

has been adopted by the public sector (Lin & Lee, 2011). The private enterprise adopted performance

contracting as they have limited resources and have to innovate to achieve higher performance. In

addition, it is easy to measure performance in the private sector as their main measure is profitability

while public sector has many and sometimes conflicting goals. Performance contracting which is

synonymous with public sector reforms has been hailed as a probable cure of ailing public sector in

most developing countries. This is because of its ability to translate multiple unclear objectives

pursued by public organizations such as public Universities into specific clear targets measured by

specified agreed criteria and weighted to reflect performance levels (Letangule & Letting, 2012).

Regional Perspective of Performance Contracting

The Regional Perspective of Performance Contracting is traceable to inability of governments to meet

operational costs leading to borrowing from multilateral donors which then triggered public service

reforms under structural adjustment program (Mutahaba, 2011). African countries emerged from the

Structural Adjustment Program (SAPS) era of the 1980s both strained and scorched by the New

Public Sector Reforms in public sector management. Governments were encouraged to deregulate

public enterprises and ensure that they were run like private sector business. Hope (2001) argued that

the World Bank could be said to be the key proponent of public sector reforms in Africa as well as

other developing countries. The focus of most reforms initiated by World Bank in public sector

management was targeted at cost containment as well as improved efficiency and effective in public

service delivery. Performance contracting was used as a tool to achieve this objective in pursuit of

performance improvement within the public sector (Hope, 2001). Performance contracting in Public

sector, management emphasizes on the adoption of private sector practices in public institutions

(Balogun, 2003).

Makewa & Were…..Int. J. Innovative Development & Policy Studies 5(1):43-64, 2016

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Local Perspective of Performance Contracting

The first phase of public sector reforms in Kenya was launched in 1993 and focused mainly on cost

cutting which was to be achieved through staff rationalization, privatization of public facilities as well

as other structural adjustment program (Kobia & Mohammed, 2006). In 2003, the Government of

Kenya (GoK) formulated the Economic Recovery Strategy (ERS) for Wealth and Employment

Creation (ERWEC) covering the period 2003-2007. This policy document is what saw the birth of

performance contracting in Kenya whose aim was to increase productivity and improvement in

service delivery underpinned by results based management systems (Kobia & Mohammed, 2006).

Performance Contracting was seen as an effective way to provide quality goods and services within

budget constraints (Kariuki, 2011). Since the performance contracting has been hugely celebrated and

is associated with improvements in service delivery in the public sector in Kenya (Muthaura, 2010).

The great success of performance contracting is attributed to the way it was operationalized. All

actors of the contracting authority are actively involved in setting and achievement of the set targets,

cascading of negotiated performance targets is done at all levels. Implementation of the negotiated

performance targets is cascaded through top-down frameworks where the ministries sign their

performance targets with the national department under the Office of President currently called

Presidential Delivery Unit (PDU).

Statement of the Problem

Performance contracting as a tool of Result Based Management System (RBM) when combined with

transformative leadership helps organizations to achieve desired results. Similarly empirical evidence

has demonstrated that Performance contracting when practiced in the context of an organization can

act as a catalyst that can positively influence organizational performance (Obong‘o, 2009; Balogun,

2003). Performance management breeds culture and behavior that leads to attainment of the

organizational objectives. It creates shared understanding on how to improve performance by agreeing

on what need to be done, by who, when and designs how achievement is measured (Armstrong,

2006).

Buytendijk (2009) argues that a good performance management system should focus on outcomes and

not outputs. In a nutshell, performance Contracting is a management tool that aims at aligning goals

of the principals and the agents in a manner that creates a shared vision which improves on

performance. In 2003, the NARC (National Rainbow Coalition Government) formulated the

Economic Recovery Strategy (ERS) for Wealth and Employment Creation (ERWEC). This policy

document is what saw the birth of performance contracting as tool to expedite achievement of

economic recovery strategy and enhance service delivery in the Public Sector.

Jomo Kenyatta University has been on performance contract since Financial Year 2005/2006 up to

2012/2013. University Council would sign the performance contract with the government which

would then be passed to Top University Management for implementation and was not cascaded down

words with effect from 2013/2014, the 10th cycle of Performance Contract Guidelines required to

sign a performance contract and cascade it to all levels of the organizational which made all actors

part of the process embracing the practices of management at all levels.

Studies done in Kenya on the influence of performance contracting on organizational performance

have been conceptualized and contextualized differently. The existing empirical studies include

(Obong'o 2009; Letangule and Letting 2012; Mutahaba, 2011; Cheche & Muathe 2014). Obong'o

2009 did a critical literature review capturing the historical perspective on implementation of

performance contracting in Kenya. The study by Letangule and Letting (2012) sought to examine the

Effect of performance contract on organizational performance of Kenya‘s ministry of education.

Mutahaba, (2011) did a report on adoption and use of performance management systems including

performance measurement, monitoring and evaluation in Africa. Cheche and Muathe (2014) did a

Critical Review of Literature on Performance Contracting.

From all these studies none of them has sought to empirically establish the relationship between

performance contracting and negotiation, target setting, and top management commitment in public

universities. Much literature relied on historical perspective on implementation , use of performance

management systems and performance measurement on relationship to performance contracting,

making it possible for the organization to come up with a way of meeting the organization

performance The study therefore seeks to establish the effects of performance contracting on

organizational performance on negotiation, target setting, top management commitment and


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monitoring and evaluation in the context of the public universities in reference to Jomo Kenyatta

university. It is on this premise that this study will answer the question: what is the influence of

performance contracting on organizational performance of public universalities in Kenya in reference

to Jomo Kenyatta University. It is on this premise that the study was to provide top managers with

relevant information to inform the organization performance contracting in Kenyan public

universities.

Objectives

The general objective of the study was to establish the influence of performance contracting on

organizational performance in public universities in Kenya.

The specific objectives of the study were to:

(i) To determine the influence of negotiation on organizational performance in public

universities in Kenya.

(ii) To find out the influence of top management commitment on organizational performance in

public universities in Kenya.

(iii) To establish the influence of target setting on organizational performance in public

universities in Kenya.

(iv) To examine the influence of monitoring and evaluation on organizational performance in

public universities in Kenya.

Research Questions

The research questions which guided the study included the following:

i. How does negotiation influence organizational performance in public universities in Kenya?

ii. Does top management commitment influence organizational performance in public

universities in Kenya?

iii. What is the influence of target setting on organizational performance in public universities in

Kenya?

iv. To examine the influence of monitoring and evaluation on organizational performance in

public universities in Kenya?

LITERATURE REVIEW

Theoretical Review

Open Systems Theory

Open systems theory looks at an organization as a system that survives by exchanging materials with

its environment (Lawrence & Lorsch, 2007). The theory anchors the interphase between performance

contracting and organizational performance. For an organization to survive it must strive to achieve

the performance targets agreed upon between its management and the government agency. While the

output from the organization is the targets agreed upon the inputs from the environment is the support

the organization receives from the government.

In order to carry out the process of import-conversion-export the organization has to develop a

boundary which separates it from its environment, and through which the exchange processes will

take place. This boundary should be solid enough to prevent leakage and protect the organization

against the danger of falling apart, but also permeable enough to enable the two-way flow of materials

(Murgor, 2014). This theory supports the importance of negotiating and target setting on organization

since it says that, for an organization to perform its management should ensure smooth inward and

outward flow of materials. Top management should participate in negotiating the goals it organization

should achieve in stated period and ensure the working environment is suitable to employees, to

enable them achieve the set and negotiated targets.

Organizational Theory

The definition of an organization has changed and evolved over a period of time. Mott (1965) defined

an organization as a system of division of labor in which each member performs certain specialized

activities that are coordinated with the activities of other specialists. The interest in the study of the

organization was stimulated by the industrial revolution during which there was a shift from

independent craftsmen to workers assembled together in a plant to facilitate mass production.


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Organization theory assesses the relationships in organizations between tasks, social structures,

resources and the environment. It identifies the components of an organization as; structure,

processes, people and culture.

Weber‘s analysis of bureaucracy was part of his more general theory of modern society. Weber felt

that organizations were not just ―tools‖ to accomplish goals but they were systems of power. The

actors of the organizations always wanted to enrich themselves at the expense of others by use of

power at all means. Weber‘s theory of class, status, and power was essentially a theory about how

various groups in society would organize, create political parties, and try to take over state

bureaucracies in order to direct privileges to themselves or their groups. Firms or industries could

lobby with states to promote rules and laws that favored their interests. Here, organizational survival

could turn on political connections and not efficiency.

The second strand of thought in organizational theory emerged in economics. This thought was

mostly interested in organizations as firms. The firm has played a complex role in economic theory.

Coase, one of the first economists, recognized that the existence of firms presented a problem for

economics Coase (1937). He reasoned that if marketswere the most efficient way to organize

transactions, then all transactions that take place between individuals and firms would not exist. But

the fact that firms existed implied that under certain conditions it was more efficient to organize a firm

(or a hierarchy), than to use a market. He invented the idea of transaction costs which were simply the

costs associated with engaging in transactions. His early work tried to identify some of the kinds of

costs that might come into play including the uncertainty of securing a supply for the goods and

services that a firm produced. This article was ignored until its rediscovery in the 1960s.

Goal setting theory

Goal setting theory is a framework for understanding the relationships among motivation, behavior,

and performance. The basic idea behind goal setting theory is that humans translate motivational

forces into observable behavior through the process of setting and pursuing goals. Goals are thus the

mechanism that operationalizes motivation by using it to shape and drive behavior without such a

mechanism, motivation would simply be a collection of unrealized, internal forces of little

consequence. Moreover, goals are effective motivational devices because they tend to promote

behavioral patterns that are conducive to high performance and success. Specifically, goals lead

people to focus attention, exert effort, persist in the face of challenge, and engage in strategy

development (Latham, 2007).

Goal setting theory also makes three specific claims. First, goal setting theory maintains that specific,

high goals lead to better performance than do low goals or vague goals such as ―do your best.‖

Second, it states that given goal commitment, a positive, linear association exists between goal

difficulty and performance—in short, the higher the goal, the better. Third, it states that a number of

additional factors that are known to influence behavior and performance, such as feedback and

monetary incentives, only do so to the extent that they promote the setting of specific, high goals. In

other words, it states that goal setting mediates the influence of these additional factors on

performance (Latham, 2007). These three findings are the result of 50 years‘ worth of empirical

research examining goal setting in relation to more than 100 different tasks performed by over 40,000

participants in eight different countries (Locke & Latham, 2005).

The general theme that emerges from research about feedback in the workplace is that feedback is an

essential component of the goal setting process, but that the precise role of feedback varies depending

on characteristics of the feedback as well as contextual and individual-level factors. The above theory

relates to target setting on organizational performance.

Agency Theory

Agency theory is mainly based on the concept of the principal –agent relationship. In this relationship

principals represent individuals, or group of individual, who are in control of a set of economic

functions or assets that have been delegated by the principals, to agents who operate them on their

behalf (Plok, 2009). Amulyoto (2004), agency theory is part of the positivist group of theories which

derives from the management literature and it postulates that the organization consist of a contract

between the owners of Economic resources (principal)and managers (the agent) who are charged with

using and controlling those resources. It is based on the premise that agents have more information

than principals and that this information symmetry adversely affects the principal‘s ability to monitor


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effectively whether their interests are being properly served by agent‘s .it also assumes that principals

and agents act rationally and that they will use the contracting process to maximize their wealth.

Arm and Thomas (2003) counted that a directors monitoring function is to monitor and evaluate how

the top management utilize resources allocated to the, how they implement policies and often

managers provide feedback to employees in order to ensure they are in the right track of achieving the

set targets given in certain period. They also evaluate results in order to reward the employees.

Control Theory

This theory will guide the study in investigating the relationship between monitoring and evaluation

and organizational performance Control theory, invented by Ouchi (1979) and Eisenhardt (1985) uses

the notion of modes of control to describe all attempts to ensure that individuals in organizations act

in a way that is consistent with organizational goals and objectives (Kirsch, 1997). The concept of

control is based on the premise that the controller and the controlee have different interests. These

different interests will be overcome by the controller‘s modes of control (Tiwana, 2009).

Modes of control may distinguish between formal and informal mechanisms. Formal modes of control

are defined as Behavior control and Outcome control. Behavior control consists of articulated roles

and procedures and rewards based upon those rules. Outcome control is mechanisms for assigning

rewards based on articulated goals and outcomes. The informal modes of control are carried out by

the control modes labelled as clan and self. Clan are the mechanisms of a group sharing common

values, beliefs, problems, and these mechanisms work through activities as hiring & training of staff,

socialization etc. The control mode of the self is about individually defined goals and can be carried

through the mechanisms of individual empowerment, self-management, self-set goals, etc. (Kirsch,

2007). In the context organizational performance the manager and the teams have different interests.

The control mechanisms and rules must also be aligned with the overall organization goals as well as

the goals of individual teams. Based on this understanding, manager this research will use control

theory to focus on modes of monitoring and evaluation on organizational performance.

Conceptual Framework

The conceptual framework for the study is shown in figure 1 below:

Organizational performance

Fulfill Statutory Obligations

Increase customer satisfaction

Increase employee satisfaction

Negotiation

Mutual agreement

Commitment of the parties

Implementation

Top Management

commitment

Resource allocation

Policies

Involvement

Target setting

SMART clear objectives

Mutually agreed

Communication

Monitoring & Evaluation

Feedback

Results

Rewarding

Independent Variables

Dependent Variables

Figure 1: The Conceptual Framework


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RESEARCH METHODOLOGY

Research Design

The research design will be a descriptive survey design. This is considered most appropriate since the

phenomenon under study will be measured as they naturally occur without being manipulated. The

research design is envisaged to offer the researcher an opportunity to collect data across departments

in JKUAT and empirically test the relationship of the constructs under study. This research design is

also considered most appropriate given scope of the study, nature of data to be collected and the

method of analysis to be performed (Cooper &Schindler, 2006).

Target Population

Target population is the entire set of units for which the study data are to be used to make inferences;

the target population thus defines those units for which the findings of the study are meant to

generalize (Sarason, 2013). The target population comprised of 110 chairpersons of departments

collected from the University. All the departments sign Performance Contracts as the overall

Performance targets are cascaded across all Departments as illustrated in Table 1:

Table 1: Target Population

Division Population Percentage

Human Resource & Administration, 11 10.00%

Non-Academic 12 10.91%

Academic 75 68.18%

Total 110 100%

Source: JKUAT (2017)

Sample Frame

The sampling frame describes the lists of all population units from which the sample will be collected

(Cooper & Scheduler, 2008). It was the physical representation of the target population comprised of

110chairpersons from the University.

Sample Size and Sampling Technique

The study adopted a census technique this therefore ruled out application of specific sampling

technique. The study used a census since the population of 110 heads of department staff was small

and the study aimed to reach all the respondents The census approach is justified since according to

Orodho (2009), data gathered using census contributes towards gathering of unbiased data

representing all individuals‘ opinions on a study problem (Field, 2006).

Data Collection Instruments

The study used questionnaire as the research instrument. This is because of their simplicity in the

administration and scoring of items as well as data analysis (Gronhaug, 2005).The study utilized

quantitative questionnaire that was developed for generating information on key variables of interest

from the targeted respondents in this study. These respondents were specifically targeted for their

ability to provide pertinent information to the study. The questionnaires were self-administered and

distributed to the respondents and reasonable time given before they could collect. The completed

questionnaires were sorted and cleaned of errors.

Data collection Procedure

The data collection procedure for the study included the following; the researcher who got a letter of

introduction from the chairman EPD department in JKUAT. The researcher had to visit and seek

authority from the University to carry research in the university. Using this letter the researcher then

visited the participants. The researcher then administered the questionnaires. Finally, the researcher

collected the questionnaires after one week from the respondents. Out of the 110 questionnaires

administered, 66 questionnaires were fully completed and returned making a response percent of

60.29%.

Pilot Study

The purpose of a pilot test was to test the reliability and validity of the questionnaire and enable the

researcher to amend the questionnaire as appropriate so as to capture data accurately. It is supported

by Riel (2010) who recommends that a test of 10% of the population can be used for pilot testing. The

findings of the pilot test were not included in the actual study (Riel, 2010). A pilot study was

undertaken on 11 respondents.


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Reliability Test

In order to test the reliability of the instruments, internal consistency techniques will be applied using

Cronbach‘s Alpha. The alpha value ranges between 0 and 1 with reliability increasing with the

increase in value. Coefficient of 0.6-0.7 is commonly recommended and it indicates acceptable

reliability and 0.8 or higher is good. This study adopted a reliability threshold of 0.7 as recommended.

Negotiation had the highest reliability (α= 0.977), followed by Top Management Committee (α=0.

885), Target Setting (α=0. 808), Monitoring & Evaluation (α=0.801) and Organizational Performance

(α=0.792). This illustrates that all the four variables were reliable as their reliability values exceeded

the prescribed threshold of 0.7.

Validity Test

On the other hand validity is the accuracy and meaningfulness of inferences which are based on the

research results. In essence, this means the degree to which results obtained from the analysis will

represent the phenomenon being studied (Mugenda & Mugenda, 2012). According to Patton (2002)

validity is the strength of the conclusions, inferences or propositions. It is the best available

approximation to the truth or falsity of a given inference, proposition or conclusion. Data need not

only to be reliable but also true and accurate. If a measurement is valid, it is also reliable (Creswell,

2003). The study will adopt Content Validity Index which refers to the extent to which a measuring

instrument provides adequate coverage of the topic under study. The Content Validity Index was

achieved by subjecting the data collection instruments to an evaluation group of experts who provided

their comments and relevance of each item of the instruments and the experts indicated whether the

item was relevant or not. The content validity formula by Amin (2005) was used in this study. The

formula is; Content Validity Index = (No. of judges declaring item valid) (Total no. of items). It is

recommended that instruments used in research should have CVI of about 0.78 or higher and three or

more experts could be considered evidence of good content validity (Amin, 2005).

Data Analysis and Presentation

Data collected was analyzed using both quantitative and qualitative methods with the help of SPSS

version 22 and Microsoft excel. The qualitative analysis helps in giving recommendation in line

with the conclusions drawn for the whole population under study (Mugenda & Mugenda, 2012).

Quantitative analysis generated quantitative reports through tabulations, percentages, and measure of

central tendency. The percentages were used to organize and summarize numerical data whose results

were presented in tables, bar graphs for easy interpretation of the findings. Data was presented in

various forms. A frequency distribution table was used to summarize categorical or numerical data.

The study further adopted multiple regression model and the dependent variable was regressed against

four independent variables. A multiple regression model that was then fitted to determine the

combined effect that the independent variables had on the dependent variable when acting jointly was

expressed as follows: Y = β0+ β1X1+ β2X2+ β3X3+ β4X4+ ε, Where; Y= Organizational

Performance; β0= constant (coefficient of intercept),

X1= Target Setting

X2= Monitoring & Evaluation;

X3= Top management Committee

X4= Negotiation;

ε = Error term; β1…β4= Regression coefficient of four variables.

RESULTS AND DISCUSSIONS

Descriptive Statistics

Negotiation

The study sought to establish the extent to which respondents agreed with the statements relating to

negotiation influence on organizational performance in public universities in reference to Jomo

Kenyatta University. A scale of 1-5 was used. The scores ―Not at all‖ and ―Less Extent‖ were

represented by mean score, equivalent to 1 to 2.5 on the continuous Likert scale (1 ≤ less extent ≤

2.5). The scores of ‗Moderate Extent‘ were represented by a score equivalent to 2.6 to 3.5 on the

Likert scale (2.6 ≤ Moderate ≤ 3.5). The score of ―Large Extent‖ and ―Very Large Extent‖ were

represented by a mean score equivalent to 3.6 to 5.0 on the Likert Scale (3.6 ≤ Large Extent≤ 5.0).

The results were presented in mean and standard deviation. The mean was generated from SPSS

version 22 and is as illustrated in Table 4.3.


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From the research findings, majority of the respondents indicated that they agreed that the both the

contracted and the contracting department have a mutual agreement to synergize in achieving the set

targets as shown by a mean of 4.10; the there is mutual agreement that contracting department freely

develops the performance targets as shown by a mean of 3.95; there is mutual agreement all the

relevant parties are freely involved in setting performance targets as shown by a mean of 4.01; the

theirs is mutual agreement the negotiating parties are well represented during the negotiating of the

contracts as shown by a mean of 3.99; there is commitment from either‘s parties towards achieving of

the set targets as shown by mean of 4.10. The negotiators are committed to ensure that performance

targets meet the requirements stipulated in the PC guidelines as shown by mean of 3.95; the all

parties are committed to adhere to the terms and conditions of the negotiation process as shown by

mean of 4.01 and small extent that there was good relationship between the government and the

university(1.65); they agreed that the there are enough resources necessary for implementation for

performance contracting(2.13) and top management supports employees in achieving the set

targets(1.98) The findings of this study are in tandem with literature review by Leaman (2011) who

argues that those negotiation of performance targets such as mutual agreement between the parties,

commitment of the parties and implementation process affect the organizational performance of

public universities in Kenya. Table 2: Influence of Negotiation of organizational performance in Public Universities

Statement N

ot

at

all

Les

s E

xte

nt

Mo

der

ate

Ex

ten

t

La

rge

Ex

ten

t

Ver

y L

arg

e E

xte

nt

Mea

n

Std

dev

iati

on

Both the contracted and the contracting department have a

mutual agreement to synergize in achieving the set targets 6% 6% 9% 71.5% 7.5% 4.10 0.32

There is mutual agreement that contracting department freely

develops the performance targets 6.5% 8% 7% 67.5% 11% 3.95 0.36

There is mutual agreement all the relevant parties are freely

involved in setting performance targets 6.5% 6.5% 6.5% 72.5% 8% 4.01 0.44

There is mutual agreement the negotiating parties are well

represented during the negotiating of the contracts 5.5% 11% 6.5% 67.5% 9.5% 3.99 0.65

There is commitment from either‘s parties towards achieving

of the set targets 6% 6% 9% 6.8% 11% 4.10 0.32

The negotiators are committed to ensure that performance

targets meet the requirements stipulated in the PC guidelines 10% 8% 7% 67.5% 7.5% 3.95 0.36

All parties are committed to adhere to the terms and

conditions of the negotiation process 6.5% 71% 10% 6.5% 6% 2.01 0.44

There is enough resources necessary for implementation for

performance contracting 5.5% 11% 6.5% 67.5% 9.5% 1.65 0.65

There was good relationship between the government and the

university 6% 6% 9% 6.8% 11% 2.13 0.32

Top management supports employees in achieving the set

targets 10% 8% 7% 67.5% 7.5% 1.98 0.36


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Top Management Commitment

The study sought to establish the extent to which respondents agreed with the statements relating to top

management committee influence on organizational performance in public universities in Kenya. A

scale of 1-5 was used. The scores ―Not at all‖ and ―Less Extent‖ were represented by mean score,

equivalent to 1 to 2.5 on the continuous Likert scale (1 ≤ Less extent ≤ 2.5). The scores of ‗Moderate

Extent‘ were represented by a score equivalent to 2.6 to 3.5 on the Likert scale (2.6 ≤ Moderate ≤ 3.5).

The score of ―Large Extent‖ and ―Very Large Extent‖ were represented by a mean score equivalent to

3.6 to 5.0 on the Likert Scale (3.6 ≤ Large Extent≤ 5.0). The results were presented in mean and

standard deviation. The mean was generated from SPSS version 22 and is as illustrated in Table 3.

From the research findings in Table 3, majority of the employees indicated to a large extent that the

university allocates adequate financial resources for achievement of performance targets as shown by a

mean of 4.10; the university allocates adequate funds for capacity building of staff as shown by a

mean of 3.55; all targets have been fully linked to budgets as shown by a mean of 4.01; the university

management allocates adequate resources to motivate staff towards achievement of the set targets as

shown by a mean of 2.99; the policies and procedures are aligned towards achievement of performance

targets as shown by mean of 2.10; the rules and regulations are flexible to allow the changes that

necessitate achievement of set targets as shown in a mean of 2.01; the university involves the employee

is decision making towards achieving performance contracting goals as shown by a mean of 2.95 staff

are allowed free hand in devising ways that necessitate performance contracting goals as shown by a

mean of 4.01 and the university involves the employee in decision making towards achieving

performance contracting goals as shown by a mean of 2.99; and there are clear roles to guide

employees towards achieving a set of goals as shown by a mean of 4.01. The findings of the study are

in agreement with literature review by Health et al,(2004) who observed that effective results of

organizational performance for any organization depends on the level of resources, involvement and

policies

Table 3: Influence Top Management Committee on organizational performance in Public Universities

Statement

No

t a

t a

ll

Les

s E

xte

nt

Mo

der

ate

Ex

ten

t

La

rge

Ex

ten

t

Ver

y L

arg

e E

xte

nt

Mea

n

Std

dev

iati

on

The university allocates adequate financial resources for

achievement of performance targets 6% 6% 9% 68% 75% 4.10 0.32

The university allocates adequate funds for capacity building of

staff 6.5% 8% 7% 67.5% 7.5% 3.95 0.36

All targets have been fully linked to budgets as shown 6.5% 6.5% 6.5% 72.5% 6.5% 4.01 0.44

The university management allocates adequate resources to

motivate staff towards achievement of the set targets 5.5% 67.5% 10% 11% 9.5% 2.99 0.65

The policies and procedures are aligned towards achievement of

performance targets 10% 6% 9% 68% 7.5% 4.10 0.32

The rules and regulations are flexible to allow the changes that

necessitate achievement of set targets 6.5% 8% 7% 70% 7.5% 3.95 0.36

The university involves the employee is decision making towards

achieving performance contracting goals 6.5% 74.5% 6.5% 6.5% 6% 2.95 0.44

University recognize and value employees 74.5% 6.5% 6.5% 74.5% 6.5% 4.01 0.54

There are clear roles to guide employees towards achieving a set

of goals 5.5% 11% 6.5% 71% 6% 2.99 0.66

Target Setting


target setting influence on organizational performance in public universities in Kenya. The mean was

generated from SPSS version 22 and is as illustrated in Table 4. From the research findings, majority

of the employees indicated to a large extent that the targets set are specific as shown by a mean of


Ok

53

3.99; the targets set are measurable as shown by a mean of 4.10; the targets set are attainable as shown

by a mean of 4.01; the targets set are realistic as shown by a mean of 3.99; the targets set are time

bound as shown by mean of 4.10; performance indicators and targets are relevant to the organizations‘

mandate. As indicated by a mean of 4.01. Top management committee communicate performance to

the employees as shown by 3.95; Top management provide a flexible structure in the organization for

discussion as shown by a mean of 2.05 Managers keep everyone informed in the issues taking place in

the university (4.10).The findings of this study concurs with literature review by Graham (2006) that

there is a growing recognition that target setting factors affect organizational performance. Table 4: Influence of Target Setting On Organizational Performance in Public Universities

Statement

No

t a

t a

ll

Les

s E

xte

nt

Mo

der

ate

Ex

ten

t

La

rge

Ex

ten

t

Ver

y L

arg

e

Ex

ten

t

Mea

n

Std

dev

iati

on

The targets set are specific.

6.5% 6.5% 8.5% 72.5% 6% 3.99 0.65

The targets set are measurable 5.5% 11% 6.5% 67.5% 9.5% 4.10 0.32

The targets are attainable 6% 6% 9% 68% 11% 4.01 0.44

The targets are realistic 6.5% 6.5% 8.5% 72.5% 6% 4.10 0.32

The targets set are time bound 6.5% 6.5% 8.5% 72.5% 6% 3.95 0.36

Performance indicators and targets are relevant to the

organizations‘ mandate. 5.5% 14.5% 6.5% 67.5% 6% 4.01 0.44

Top management committee communicate performance to the

employees 5.5% 11% 6.5% 67.5% 9.5% 3.99 0.66

Top management provide a flexible structure in the organization

for discussion 6% 6% 9% 68% 11% 3.99 0.65

Managers keep everyone informed in the issues taking place in

the university

5.5% 67.5% 10% 11% 9.5% 4.10 0.32

Monitoring & Evaluation


monitoring and evaluation influence on organizational performance in public universities in Kenya in

reference to Jomo Kenyatta University. The results were presented in mean and standard deviation.

The mean was generated from SPSS version 22 and is as illustrated in Table 5.

From the results, majority indicated to a small extent that M & E is tied to specific set targets as

shown by a mean of 3.0; M & E feedback is given regularly to allow decision making as shown by a

mean of 3.99; M & E is considered to be a critical activity of performance contracting process as

shown by a mean of 3.10; adequate resources are allocated for M & E as shown by a mean of 2.10 ;

there are clear framework to guide M & E as shown by a mean of 3.01; the performance contract and

evaluation tools are used adequately to give results as shown by a mean of 2.01. There is continuous

M & E as shown by a mean of 2.98 and reward systems is fair to all after the evaluation as shown by a

mean of 2.67. The above finding collaborates with literature review by Gensler (2006) who states that

monitoring and evaluation most influence performance contracting on organization performance.


Ok

54

Table 5: Influence of M & E on Organizational Performance in Public Universities

Statement

No

t a

t a

ll

Les

s E

xte

nt

Mo

der

ate

Ex

ten

t

La

rge

Ex

ten

t

Ver

y L

arg

e E

xte

nt

Mea

n

Std

dev

iati

on

M & E is tied to specific set targets 6.5% 72.5% 8.5% 6.5% 6% 3.01 0.44

M & E feedback is given regularly to allow decision making 5.5% 11% 6.5% 67.5% 9.5% 3.99 0.65

M & E is considered to be a critical activity of performance

contracting process 6% 68% 9% 6% 11% 3.10 0.32

Adequate resources are allocated for M & E 6.5% 6.5% 8.5% 72.5% 6% 4.01 0.44

There are clear framework to guide M & E 72.5% 6.5% 8.5% 72.5% 6% 2.10 0.32

There is continuous M & E 5.5% 67.5% 6.5% 67.5% 9.5% 2.95 0.36

Would you recommend a good friend to apply for a position in

your workplace? 68% 6% 9% 7% 11% 3.01 0.44

Reward systems is fair to all after the evaluation 72.5% 6.5% 8.5% 6% 6% 2.01 0.54

Organizational Performance

The study sought to establish the extent to which performance contracting aspects influence

organizational performance in public universities indicated by the customer satisfaction, employee

satisfaction and fulfillment of statutory obligations. The findings were as represented on the scores of

―Excellent‖ as represented by a composite score of 1.00 to 1. 49 and ―Very good‖ as represented by

mean score of 1.50 to 2.49, ―Fair‖ as represented by mean score of 3.50 to 3.59 and ―Poor‖ as

represented by mean score of 3.60 to 5.00 as per the organizational performance contracting guide in

the appendices (GoK, 2012). The percentage of composite score was generated from SPSS version 21

and is as illustrated in Table 6.

From the study findings, majority of the respondents indicated to that the organization fulfilled its

statutory obligations as shown by a mean of 3.46, the customer satisfaction of the services rendered

by the organization as shown by a mean of 3.64; that the employee satisfaction in the organization as

shown by a mean of 3.77. This indicates that organizational performance in the public universities

was poor. The findings of the study are in tandem with report on evaluation of public agencies for the

financial year 2012 that there is slight improvement of organizational performance in public

universities but still employee satisfaction and customer satisfaction still remains low( GoK, 2012).


Ok

55

Table 6: Elements relating to organizational performance in Public Universities

Statement

Ex

cell

ent

Ver

y g

ood

Go

od

Fa

ir

Po

or

Mea

n

Std

dev

iati

on

How does your organization fulfill

statutory obligations? 5.5% 9.5% 6.5% 6.5% 67.5% 3.46 0.53

How can you describe the customer

satisfaction of the services rendered by

your organization?

6% 6% 11% 9% 68% 3.64 0.98

How can you describe the employee

satisfaction in your organization? 6.5% 6% 8.5% 6.5% 72.5% 3.77 0.67

Inferential Statistics

The study further conducted inferential statistics entailing both Pearson and regression analysis with a

view to determine both the nature and respective strengths of associations between the conceptualized

performance contracting (independent) variables and organizational performance (dependent variable)

in the public universities in Kenya.

Correlation Analysis

Table 7 presents the Pearson correlations for the relationships between the performance contracting

variables and organizational performance in public universities. From the findings, a positive

correlation is seen between the each performance contracting variable and organizational performance

in public universities. The analysis of correlation results in Table 7 illustrates that between Target

Setting and organizational performance in public universities there is a positive coefficient 0.708, with

p-value of 0.004. It indicates that the result is significant at α =5% and that if the target setting

increases it will have a positive impact on organizational performance in public universities. The

correlation results between M & E and organizational performance in public universities also

indicates the same type of result where the correlation coefficient is 0.636 and a p-value of 0.007

which significant at α = 5%. The results also show that there is a positive association between M & E

and organizational performance in public universities where the correlation coefficient is 0.636, with a

p-value of 0.002.

Further, the result shows that there is a positive association between Top Management Committee and

organizational performance in public universities where the correlation coefficient is 0.516, with a p-

value of 0.000. This therefore infers that if top management committee increases it will have a

positive impact on organizational performance in public universities. A moderate correlation was

established between negotiation and organizational performance in public universities (r =.498). This

therefore infers that if negotiation increases it will have a positive impact on organizational

performance in public universities. All the independent variables were found to have a statistically

significant association with the dependent variable at 0.05 level of confidence. The correlation matrix

implies that the independent variables were major determinants of performance contracting on

organizational performance in public universities as shown by their strong positive relationship with

the dependent variable; organizational performance in public universities. The findings of this study

concurs with literature review by Graham (2006) that there is a growing recognition that performance

contracting on organizational performance. Basically, the performance contracting factors affect the

quality of work life, individual quality of work life outcomes and organizational outcomes.


Ok

56

Table 7: Pearson correlation matrix

Performance Resources

Procurement

planning

Contract

management

Government laws

and regulations

Performance 1

Target Setting .708** 1

.004

Monitoring &

Evaluation

.636** .550** 1

.007 .000

Contract management .516** .485** .115 1

.002 .001 .474

Government laws and

regulations

.498** .224** .100 .092** 1

.000 .000 .057 .000

*Correlation is significant at the 0.05 level (2-tailed)

Regression Analysis of Target Setting On Organizational Performance in Public Universities

The following Table 8 depicts regression model which highlights the relationship between target

setting and organizational performance in public universities and the findings are as outlined in Table

8. It shows that the study used correlation coefficient to check on the magnitude and the direction of

the relationship between the variables, coefficient of determination (the percentage variation in the

dependent variable being explained by the changes in the dependent variable) and p-value were used

to check on the overall significance of the model. The correlation coefficient of 0.876 indicates a very

strong positive relationship between the dependent and independent variables. On the other hand

coefficient determination R squares of 0.767 shows that 76.70% of the variation of organizational

performance in public universities can be predicted by the independent variable. The adjusted R

square of 70.60% shows that the model is a good estimate of the relationship between the variables.

To Test of significance of R square,

Probability of Error (P/E) = R/S.E.

Where R=0.876, S.E = 0.065

Therefore, P.E=0.876/0.065

P.E=13.477

R Square value= 0.767

Since R square value is less than 6 times the P.E, then the R square is not significant. This implies that

there is a chance of making type I error. Further, the standard error is minimal with a value of 0.05

meaning the model used in the study will have minimal effects of errors associated with it. The

Durbin Watson test was used to detect the presence of autocorrelation between the variables tested

and if the value is less than 3 there is no presence of autocorrelation in the regression model otherwise

there is autocorrelation. As from Table 8, Durbin Watson value is 1.657 which shows there was no

autocorrelation.

Further, the linear regression analysis coefficients shows that the model Y= β0 + β1X1 + ε, is

significantly fit. A further test on the beta coefficient of the resulting model, the coefficient β =

.809 is significantly different from 0, p=.001 which is less than p= .05. The general form of the

equation was to predict organizational performance in public universities from X1= Target Setting;

becomes: Y= 22.345 + 0.809X1+ 0.345. This indicates that organizational performance in public

universities = 22.345 + 0.809*Target Setting + 0.345. The model organizational performance in

public universities = β (Target Setting) holds as suggested by the test above. This confirms that there

is a positive linear relationship between target setting and organizational performance in public

universities.


Ok

57

Table 8: Model Summary (Target Setting)

Model R R2 Adjusted R

2 Std. Error of

the Estimate

Durbin-

Watson

1 .876 .767 .706 .009 1.657

Coefficient Results (Target Setting)

Model Coefficients T Sig.

β Std. Error

1 (Constant) 22.345 .345 2.309 .000

X1-Target Setting .809 .231 6.765 .001

Regression Analysis of Monitoring &Evaluation On Organizational Performance In Public

Universities

The following Table 9 depicts regression model which highlights the relationship between monitoring

and evaluation and organizational performance in public universities and the findings are as outlined

in Table 9. It shows that the study used correlation coefficient to check on the magnitude and the

direction of the relationship between the variables, coefficient of determination (the percentage

variation in the dependent variable being explained by the changes in the dependent variable) and p-

value were used to check on the overall significance of the model. The correlation coefficient of 0.790

indicates a very strong positive relationship between the dependent and independent variables. On the

other hand coefficient determination R squares of 0.624 shows that 62.40% of the variation of

organizational performance in public universities. The adjusted R square of 56.70% shows that the

model is a good estimate of the relationship between the variables.

To Test of significance of R square,

Probability of Error (P/E) = R/S.E.

Where R=0.790, S.E = 0.008


P.E=16.458


Since R square value is less than 6 times the P.E, and then the R square is not significant. This implies

that there is a chance of making type I error. Further, the standard error is minimal with a value of

0.05 meaning the model used in the study will have minimal effects of errors associated with it. The



there is autocorrelation. As from Table 4.12, Durbin Watson value is 2.765 which show there was no

autocorrelation.




equation was to predict organizational performance in public universities from X2= Monitoring and

Evaluation; becomes: Y= 11.098 + 0.782X2 + 0.076. This indicates that organizational performance

in public universities = 11.098 + 0.782*Monitoring and Evaluation + 0.076. The model

organizational performance in public universities = β (Monitoring & Evaluation) holds as suggested

by the test above. This confirms that there is a positive linear relationship between Monitoring &

Evaluation and organizational performance in public universities.


Ok

58

Table 9: Model Summary (Monitoring & Evaluation)


2 Std. Error of

the Estimate

Durbin-

Watson

1 .790 .624 .567 .008 2.765

Coefficient Results (Monitoring & Evaluation)


β Std. Error

1 (Constant) 11.098 .076 2.784 .000

X2-TMS .782 .099 3.440 .003

Regression Analysis of Top Management Committee On Organizational Performance In Public

Universities

The following Table 10 depicts regression model which highlights the relationship between top

management and organizational performance in public universities and the findings are as outlined in

Table 10. It shows that the study used correlation coefficient to check on the magnitude and the






organizational performance in public universities. The adjusted R square of 61.80% shows that the

model is a good estimate of the relationship between the variables. To Test of significance of R

square, Probability of Error (P/E) = R/S.E.

Where R=0.881, S.E = 0.043


P.E=20.488







there is autocorrelation. As from Table 4.11, Durbin Watson value is 2.876 which show there was no

autocorrelation.




equation was to predict organizational performance in public universities from X3= Top Management

Committee; becomes: Y= 7.878 + 0.674X3 + 0.022. This indicates that organizational performance in

public universities = 7.878 + 0.674* Top Management Committee + 0.022. The model organizational

performance in public universities = β (Top management Committee) holds as suggested by the test

above. This confirms that there is a positive linear relationship between Top Management Committee

and organizational performance in public universities.


Ok

59

Table 10: Model Summary (Top Management committee)


2 Std. Error of the

Estimate

Durbin-Watson

1 .881 .776 .678 .043 2.876

Coefficient Results (Top Management committee)


β Std. Error

1 (Constant) 7.878 .022 2.556 .000

X3-WE .674 .071 2.653 .005

Regression Analysis of Negotiation on Organizational Performance In Public Universities

The following Table 11 depicts regression model which highlights the relationship between

negotiation and organizational performance in public universities and the findings are as outlined in

Table 11. It shows that the study used correlation coefficient to check on the magnitude and the






organizational performance in public universities. The adjusted R square of 556% shows that the

model is a good estimate of the relationship between the variables. To Test of significance of R

square, Probability of Error (P/E) = R/S.E.

Where R=0.778, S.E = 0.035


P.E=22.228







there is autocorrelation. As from Table 11, Durbin Watson value is 1.987 which shows there was no

autocorrelation.




equation was to predict Performance of project teams from X3= Negotiation; becomes: Y= 10.211 +

0.588X4 + 0.013. This indicates that Organizational performance in public universities = 10.211 +

0.588* Negotiation + 0.013. The model organizational performance in public universities = β

(Negotiation) holds as suggested by the test above. This confirms that there is a positive linear

relationship between Negotiation and organizational performance in public universities.


Ok

60

Table 11: Model Summary (Negotiation)


2 Std. Error of

the Estimate

Durbin-

Watson

1 .778 .605 .556 .035 1.987

Coefficient Results (Negotiation)


β Std. Error

1 (Constant) 10.211 .013 3.876 .000

X4-PLC .588 .007 2.871 .010

Overall Multiple Regression Analysis

According to Green & Salkind (2003) regression analysis is a statistics process of estimating the

relationship between variables. Regression analysis helps in generating equation that describes the

statistics relationship between one or more predictor variables and the response variable. Since there

are four variables against one dependent variable, multiple regression analysis was used to establish

their relationship at 5% level of significance. Further, the multiple regression analysis is

mathematically expressed as shown below: a multivariate regression model was applied to determine

the relative importance of each of the four variables with respect to the organizational performance in

public universities.

The results are shown in Table 12. R is the correlation coefficient which shows the relationship

between the study variables, from the findings shown in the Table 10 is notable that there exists

strong positive relationship between the study variables as shown by 0.800. The coefficient of

determination (R2) explains the extent to which changes in the dependent variable can be explained by

the change in the independent variables or the percentage of variation in the dependent variable

(organizational performance in public universities) that is explained by all four independent variables

(negotiation, top management commitment, target setting, monitoring & evaluation). According to the

four independent variables studied, they explain only 64.00% of the organizational performance in

public universities. This implies that these variables are very significant therefore need to be

considered in any effort to enhance organizational performance in public universities in Kenya. The

study therefore identifies variables as critical factors of performance contracting on organizational

performance in public universities. Further, it means that other factors not studied in this research

contribute 36.00% of organizational performance in public universities. Therefore, a further study

should be conducted to investigate the other factors that contribute 36.00% which influence

organizational performance in public universities.

From the Table 12, the study established the regression model had a significance of 0.001 which is an

indication that the data was ideal for making a conclusion on the population parameters as the value of

significance (p-value) was less than 5%. The F-calculated value was greater than the critical value

(54.138 > 32.987) an indication that Negotiation, Top Management Commitment, Target Setting,

Monitoring & Evaluation and all enhance organizational performance in public universities and this

shows that the overall model was significant.

The general form of the equation was to predict organizational performance in public universities

from Negotiation, Top Management Commitment, Target Setting, Monitoring & Evaluation is: Y =

β0 + β1X1 + β2X2 + β3X3 + β4X4 + ε Where Y= Organizational Performance In Public Universities;

β0 = Constant Term; β1, β2, and β3 = Beta coefficients; X1= Target Setting; X2= Monitoring &

Evaluation; X3= Top Management Committee; X4 = Negotiation and ε = Error term. The model

equation would be; Y=22.876 + 0.644X1 + 0.593X2 + 0.503X3 + 0.482X4+ 5.876. The Organizational

Performance in Public Universities = 22.876 + (0.644 x Target Setting) + (0.593 x Monitoring &

Evaluation) + (0.503 x Top Management Committee) + (0.482 x Negotiation). From above

regression equation; the study found out that when all independent variables (Negotiation, Top

Management Commitment, Target Setting, Monitoring & Evaluation) are kept constant at zero the

Organizational Performance In Public Universities will be at 22.876. At one unit change in Target


Ok

61

Setting will lead to 0.644 increases in Organizational Performance in Public Universities Also a one

unit change in Monitoring and Evaluation will lead to 0.593 increases in the Organizational

Performance In Public Universities. Further, a one unit change in Top Management Committee will

lead to 0.503 increases in the Organizational Performance In Public Universities and one unit change

in Negotaiation will lead to 0.482 increases in Organizational Performance In Public Universities

This concludes that target setting contributes more to Organizational Performance In Public

Universities.

To test for the statistical significance of each of the independent variables, it was necessary to test at

5% level of significance of the p-values and from the Table 4.13 the Target Setting had a 0.000;

Monitoring & Evaluation showed a 0.001 level of significance, Top Management Committee showed

a 0.004 level of significance and Negotiation had a 0.005 level of significance. Therefore, the most

significant factor was target setting.

Table 12: Model summary

Model R R2 Adjusted R2 Std. Error of the

Estimate

1 .800a .640 .623 .009

a. Predictors: (Constant), Negotiation, Top Management Commitment, Target Setting, Monitoring & Evaluation

Analysis of Variancea

Model Sum of

Squares

Df Mean Square F Sig.

1 Regression 86.880 4 21.720 54.138 .001b

Residual 24.247 61 .4012

Total 111.127 65

a. Dependent Variable: Organizational Performance in Public Universities

b. Predictors: (Constant), (Negotiation, Top Management Commitment, Target Setting, Monitoring & Evaluation)

c. Critical value = 32.987

Regression Coefficients

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

β Std.

Error β

1 (Constant) 22.876 5.876 3.309 .000

Target Setting .644 .023 .502 4.455 .000

Monitoring and Evaluation .593 .116 .455 4.266 .001

Top Management Committee .503 .287 .405 3.011 .004

Negotiation .482 .356 .409 3.069 .005

a. Dependent Variable: Organizational Performance In Public Universities


Ok

62

CONCLUSIONS

Target Setting is the first important factor that affects organizational performance in public

universities. The regression coefficients of the study show that target setting has a significant on

organizational performance in public universities. This implies that increasing levels of target setting

would increase the levels of organizational performance in public universities. This shows that target

setting has a positive influence on organizational performance in public universities. Further, the

study found out that target setting affect organizational performance in public universities. To a large

extent that the targets set are specific, measurable, attainable, realistic and time bound. The

performance indicators and targets are relevant to the organizations‘ mandate.

Monitoring and evaluation is the second important factors that affect organizational performance in

public universities. The regression coefficients of the study show that monitoring and evaluation has a

significant on organizational performance in public universities. This implies that increasing levels of

monitoring and evaluation would increase the levels of organizational performance in public

universities. This shows that monitoring and evaluation has a positive influence on organizational

performance in public universities.

Additionally, the study found out that top management commitment towards performance targets

influence organizational performance in public universities. The study revealed that inadequate

resources, unclear policies and lack of employee involvement affect organizational performance in

public universities. Further, the study revealed that the variable statistically, moderately, positively

and significantly correlated to organizational performance in public universities.

The study established that negotiation of performance targets influence organizational performance in

public universities. The study revealed that inadequate mutual agreements between parties,

commitment of the parties and implementation process affect organizational performance in public

universities. Further, the study revealed that the variable statistically, moderately, positively and

significantly correlated to organizational performance in public universities.

The study sought to determine the influence of performance contracting attributed to the influence of

target setting, monitoring and evaluation, top management committee and negotiation. Organizational

performance in public universities recorded low positive achievements. From inferential statistics, a

positive correlation is seen between each determinant variable and organizational performance in

public universities. The strongest correlation was established between target setting and

organizational performance in public universities. All the independent variables were found to have a

statistically significant association with the dependent variable at ninety-five level of confidence.

Analysis of variance was further done and it was established that there was a significant mean. This is

since the p values of their coefficients were all less than 0.05.

RECOMMENDATIONS

There is need for both the contracted and the contracting department to have a mutual agreement to

synergize in achieving the set; contracting department should freely develop the performance targets.

The mutual agreement for all the relevant parties should be freely involved in setting performance

targets. The mutual agreement for the negotiating parties should be well represented during the

negotiating of the contracts and commitment from either‘s parties towards achieving of the set targets.

The negotiators should be committed to ensure that performance targets meet the requirements

stipulated in the PC guidelines and committed to adhere to the terms and conditions of the negotiation

in the universities.

The university should allocate adequate financial resources for achievement of performance targets.

There is need for capacity building of staff and all targets to be fully linked to. The university

management should allocate adequate resources to motivate staff towards achievement of the set

targets and the policies and procedures are aligned towards achievement of performance targets. The

rules and regulations should be flexible to allow the changes that necessitate achievement of set

targets. There should be clear roles to guide employees towards achieving a set of goals.

There is need for the employees to have the targets set targets that are specific; measurable and

attainable. The targets set should be realistic and are time bound. The performance indicators and

targets should be relevant to the organizations‘ mandate. Top management committee communicates

performance to the employees should provide a flexible structure in the organization for discussion.

The managers should keep everyone informed in the issues taking place in the university.


Ok

63

The monitoring and evaluation should be tied to specific set targets, M & E feedback should be given

regularly to allow decision making and M & E is considered to be a critical activity of performance

contracting process. Adequate resources should be allocated for M & E and there is no clear

framework to guide M & E. The performance contract and evaluation tools should be used adequately

to give results. There should be continuous M & E and reward systems to be fair to all after the

evaluation.

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for strategic success. Long Range Planning, 26, 11-23.

Balogun, M. J. (2003). Performance management and agency governance for Africa development:

The search for common cause on excellence in the Public Service. UNCEA, Addis Ababa.

Bryman, A. & Bell, E. (2003). Research Methods. New York: Oxford University press.

Burnes, B. (2000). Managing change: A strategic approach to firm’s dynamics, 3rd

, Edition. London:

Prentice Hall.

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