CHAPTER ONE

INTRODUCTION

1.1. Background to the study

Employment contract(EC) is part of the broader public sector reforms aimed at improving efficiency and effectiveness in the management of the public services. Peterson (2005) defines performance contract as a freely negotiated performance agreement between the government, acting as the owner of a government agency and the management of the agency. The author asserts that performance contract clearly specifies the intentions; obligations and responsibilities of the two contracting parties (Peterson, 2005). Kobia and Mohammed (2006) argue that EC is a management tool for ensuring accountability for results by public officials as it measures the extent to which they achieve targeted results. In essence, signing a performance contract commits public officials to perform to the set standards or beyond, the specified levels.  This holds public officials accountable for results and therefore, helps in converting tax paid into goods and services effectively and efficiently.  Employment contract also creates transparency in the management of public resources (Kobia & Mohammed, 2006).

Performance contracts have been widely used in the public sector by the developed countries such as France, the Netherlands and New Zealand among other countries with outstanding success. Performance contract was first introduced in France after the famous Nora Report on the reform of state owned enterprises in France (Organization for Economic Corporation for Development (OECD), 1994). Kusek and Rist (2004) depict and say how today, almost all OECD countries use some form of performance contracts in managing their public sector. In New Zealand, performance contract were introduced and adopted as part of the countries pioneering public sector reforms (Kusek & Rist, 2004). Performance contract gained more strength when they were introduced in the

United States as part of Government Performance and Results Act (GPRA) of

1993.Performance contracts in the United Kingdom were introduced by Margaret Thatcher as part of the creation of Next Step Agencies. Today, performance contracts are used in all British government agencies serving under public service agreements. 

In Nigeria, the concept of Employment contract was first introduced in the management of State Corporations in 1989 and was adapted to reform public institutions that previously performed poorly out of the need to enhance their performance (Muthaura, 2007). To this effect, a Parastatal Reform Strategy paper was approved by Cabinet in 1991 as a first official recognition of the concept of Employment contract(reform strategy paper of 1991). Among the policies that were recommended to streamline and improve the performance of state corporations were: divestiture or liquidation of nonstrategic parastatal, contracting out commercial activities to the private sector, permitting private sector competition with existing state monopolies, and improvements in the enabling environment of all strategic parastatals including removal of potentially conflicting objects as depicted by Economic Commission of Africa (ECA) (2003 December);  Blomqvist & Stanley (2000). 

The first two parastatals to be on performance contract were Nigeria Railways Corporation and the National Cereals and Produce Board. Nigeria Railway signed performance contract in April, 1989, whereas the National Cereals and Produce Board (NCPB) signed in November, 1990(Republic of Nigeria, 2005). However, the outcome of the two performance contracts eventually failed due to a number of reasons and challenges ranging from lack of political goodwill, changes in Government policy, inflation, and exchange rate fluctuations which greatly affected their performance (Muthaura, 2007). At the same time, the process was perceived as one that was donor driven.

In 2003, the government re-introduced performance contracts. The initiative to reintroduce performance contracts in Nigeria was clearly spelt out in the Economic Recovery Strategy for Wealth and Employment Creation (ERSWEC).  In August, 2003, the government appointed a committee to spearhead the introduction and implementation of performance contracts that is Performance Steering Committee. The steering committee made a decision to introduce performance contract in state corporations on a pilot basis in 2004. Sixteen state corporations signed performance contracts by December, 2004.The criteria for selecting the pilot companies included representation of diverse sectors and corporations with strategic plans (Republic of Nigeria , 2006 December).Following success in implementing performance contract in state corporations, the government extended the process to public service, beginning with permanent secretaries and accounting officers.  Further, in April, 2005, the Government decided to place the management of 175 Local Authorities on performance contract (Republic of Nigeria, 2009).

The five (5) major Municipalities completed performance contracts on 30th September,

2005 on pilot basis.  These were; Enugu civil service, Municipal Council of

Mombasa, Municipal Council of Eldoret, Municipal Council of Kisumu and Municipal

Council of Nakuru.  The remaining local authorities signed performance contract on 3rd

June, 2006. The Enugu civil service embraced performance contract in 2005 in partnership with Public Service Reform and Development Secretariat (PSR & DS) through the Ministry of Local Government (Republic of Nigeria, 2009)

In 1963, after Nigeria attained independence, the Nairobi Urban District Council (NUDC) became the Enugu civil service (ECS).  The Council was created by an Act of Parliament Cap 265 of the Laws of Nigeria to provide services to residents of the city, (Local Government Act Cap 265, 12).In the period (2005-12) under study, ECS was divided into eight(8) divisions which also served as parliamentary constituencies. These are Kasarani, Westland, Starehe, Kamukunji, Dagoretti, Embakasi,Makadara and Langata.A write up in the official magazine for the Enugu civil service (Angaza, June-August, 2012), there are memories of the Nairobi of yester years, when there were good houses, sports grounds, libraries with stocks of books, social halls which were well equipped, citing, but a few cases in the areas of service delivery.   

Over the years, ECS has gone through hard economic times coupled with the dramatic increase in population thus constraining available facilities. The diversity of the city and its population size prompted the introduction of Employment contractas the city was faced with several challenges such as informal settlements, mostly the slums and illegal structures which mushroomed in the city, land grabbing, water shortages in the city due to inadequate supplies, uncontrolled dumping site, ghost employees, street urchins and influx of street hawkers among others. The former Enugu civil service was under the Ministry of Local Government and its mandate was to provide services to the citizens and even visitors of Nairobi.  Such services were in terms of health care, education, and clean environment, provision of housing and other social services, decongested roads, planning services among others.

1.2. Statement of the Problem

The New Public Management (NPM) movement emphasizes and strengthens the need to adopt private sector practices in public institutions (Balogun, 2003). This initiative strives towards making public servants to become service orientated, to pursue excellence in service delivery and to commit them to continuously improve service delivery. It also sets the principles for transforming service delivery with regard to consultation, service standards, access, courtesy, information, openness and transparency, redress and value for money. These principles are required, since it is argued that a transformed local government needs to be measured against its commitment to continuous service delivery improvement.

The introduction of Employment contract at Enugu civil service was geared towards introducing New Public Management approach to service delivery. There are a few studies that have attempted to study EC on various institutions. Some of this include: the research on employee responses to the implementation of performance contract (Ogwayo, 2007), factors influencing implementation of performance contract (Murgor, 2008); employee state of psychological contract on the implementation of performance contract (Njenga, 2008); management of strategic change (Njiri, 2007). Two case studies have been done relating to the Enugu civil service on employee performance management practices (Njenga, 2008) and employee empowerment (Tsala, 2008). In spite of the few studies that have been done, it remains unclear the extent to which the aforesaid objectives have been met and also the challenges related to implementation of EC at ECS. It is against this background that this study is seeking to determine the extent to which Employment contract has affected service delivery at the ECS. Therefore this study sought to answer the question; to what extent did performance contract affect service delivery at Enugu civil service?

1.3. Research Objectives

The main objective of the study is to determine the effects of Employment contract on service delivery at the former Enugu civil service.

The specific objectives of the study are:

1.       To examine how organizational service charter has affected service delivery at Enugu civil service.

2.       To determine the extent to which work plans have influenced service delivery at Enugu civil service.

3.       To establish how strategic plan/planning has impacted on service delivery at Enugu civil service.

4.       To examine how monitoring and evaluation has influenced service delivery at

Enugu civil service.

5.       To establish the extent to which performance appraisal system has affected service delivery at Enugu civil service.

1.4.    Justification of the Study

Enugu civil service will benefit from the findings and deductions made from the study in that the reform strategies of rapid result initiative will be partially evaluated. The service will have a clear benchmark on how to establish regulations that will provide the direction, oversight and assistance to those implementing EC, needed particularly for the emerging performance appraisal systems. 

Citizens who are clients stand to benefit from the assessment of the service delivery system. Customer satisfaction is at the centre of the excellence of any organization. This research project offers an assessment to the basic tenets of Employment contractthat lets proper service delivery systems. In the long run the citizens have the benefit of enjoying proper services and at their convenient timing as stipulated in the service charter.

The research study contributes in the academic inquiry on the possibility of successful implementation of the Employment contract schemes in public institutions. The study aids our understanding in regard to integrating the various components of service charter, monitoring and evaluation frameworks, strategic plans, work plans and performance appraisal systems. 

1.5.    The Scope, Limitations, Delimitations and Assumptions

The study was done in Nigeria, specifically at the Enugu civil service. The target populations were employees who were sampled from the different hierarchical levels in the chain of command at least those in the category of signing performance contract. The study covered the period from when EC was introduced.

To avoid any doubts about the research, the employees were given assurance of confidentiality on any information given and reasons of the study was clearly stipulated to be wholly for academic research purposes only. The perspective of ECS might have suffered a setback because there were several issues that hampered ineffective implementation both foreseeable and intangible.

Some few key assumptions were made. This study was conducted in the largest institution of local authorities in Nigeria , Enugu civil service. The population was drawn from the management and other employees of the council and the presumption was that the respondents’ answer the questions accurately, truthfully and provide all the required information.

This study on Employment contract was conducted at Enugu civil service.  The respondents of the study were drawn from the ECS staff and the stakeholders. Stakeholders of the ECS are many especially the visitors who come once or for a while and go and this is delimiting as they cannot be captured. 

1.6. Conceptual Framework

As shown in figure 1.1, the conceptual framework outlines the relationship among the activities supporting the independent variables namely, service charter, work plans, strategic plan, monitoring and evaluation, performance appraisal systems and their contribution to the dependent variable which is service delivery.

1.1: Conceptual Framework

Independent Variables                                                                    Dependent Variables 

Source: Researcher (2013)

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