Performance contracting is part of the broader Public Sector Reform Strategies (PSRS) initiated by the Government of Kenya to improve efficiency and effectiveness in the management of the public service.

Performance Contract (PC), whose basis is the organization’s Strategic Plan, is a freely negotiated performance agreement between the government and the management of an agency. The fundamental principle of PC is devolved management style where emphasis is on ‘management by outcome’ rather than ‘management by processes’. PC directly links planning to measurement and evaluation and is hinged on the premise that ‘what gets measured gets done; if you cannot see and measure success, you cannot reward it; if you cannot recognize failure, you cannot correct it and if you can demonstrate results, you can win public support’

Performance contracting was introduced in Kenya in 1989 but failed to realize the expected outcomes. In 2004, PC was reintroduced in some state corporations on pilot basis and its success saw it gradually cascaded to other institutions. KIST, like other TVET institutions signed its first PC in 2008. Since then, KIST has annually negotiated performance targets with the parent ministry (MOE), and has, after negotiations, been vetted by Public Service Performance Management Department in the Executive Office of the President. After expiry of the contract period (1 year) evaluation is carried out by the same department to measure performance.

Performance Contract forms a basis for implementation of the national development agenda as espoused in Kenya’s Vision 2030, the ‘Big Four’ initiatives and other national priorities. KIST has reaped the benefit of PC through improved performance and thus continues to embrace it as it strives towards meeting the needs and expectations of the Kenyan people.