Given the impact of performance contracting on the operation and effectiveness of public sectors in Kenya, it is essential that employees sign performance contracts. The purpose of this study was to determine the management perception of the influence of performance contracting on service delivery and to establish the factors that influence management perception towards performance contracting at the Ministry of Education. The study adopted a descriptive research design.Data was collected using a structured questionnaire from38 respondentsdrawn from top level managementat the Ministry, then analyzed using both descriptive and inferential statistics.Respondents were required to indicate how they perceive the influence of performance contracting on service delivery at the Ministry of Education by scoring on statements describing such a link that were presented in a 1-5 point likert scale. To determine the perceived link, the study adopted the use of perception indices as were used by Kweyu (1998) in a similar study that involved the measurement of perception. The findings of the study showed that performance contracting is perceived to have enhanced service delivery at the Ministry of Education to some level and, that there were certain limitations to successful implementation of performance contracting which have made the process to be poorly rated. The study concludes that managers don‟t perceive that performance contracting has a great effect on the improvement of quality service delivery at the Ministry of Education. The study further concludes that performance contracting is not signed by all employees at the Ministry of Education hence there is less efficiency. The study therefore recommends that for effective performance contracting on the improvement of quality service at the Ministry of Education, all employees need to be included in the signing of the performance contracts. Also, performance contracts should be linked to rewards and all employees should be trained on performance contracting since each employee will be held accountable at the end of each financial year. The study further recommends that the set targets be well communicated to all members of staff in the Ministry for effective implementation.Based on the limitations of the study, suggestions for further research relating to management perception of the influence of Performance contracting have been put forth.

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