Performance contract is a management tool for measuring performance against negotiated targets. It was introduced on 1st October, 2004, in 16 largely commercial state corporations. Retirement Benefits Authority signed its first performance contract in 2005/2006. The Authority freely negotiates performance agreement with the Government every year. Regular monitoring of the implementation of the contract is a vital aspect for its success. The Authority provides feedback by forwarding quarterly reports and taking corrective action where necessary.

Performance contract evaluation is carried out in three stages. The first stage entails self-evaluation using the evaluation methodology in the performance contract guidelines, the second stage is referred to as “primary” evaluation where a group of experts, who carry out exhaustive assessment of the performance of all public institutions in the contract year and assigns a composite score to each institutions. The third stage is the moderation stage which is the final and quality control phase, in which a team of experts ensure that the different evaluating groups have applied evaluation guidelines. Since the introduction of performance contracting, the Authority has significantly improved on service delivery to its stakeholders.

The evaluation of the performance contract of entails rating actual achievements against performance targets negotiated and agreed upon at the beginning of the year. The resultant differences are resolved into raw scores, weighted scores, and ultimately denominated into composite scores. The performance attribute is is based on the following criteria:

Excellent Achievement between 30% and 1005 above target. Composite Score C.S ( 1.0 - 1.49)
Very Good Achievement of the agreed target in the performance contract up to 129.9% C.S( 1.5 - 2.49)
Good Achievement below agreed target but = 2.57% over previous year’s achievement C.S (2.5 – 3.49)
Fair Achievement between 100% and 102.57% of previous year’s achievement. C.S (3.5 - 3.59)
Poor Achievement below previous year’s achievement. C.S (3.6 - 5.0)

Retirement Benefits Authority emerged top among Financial Sector Regulators in Performance Contracting Results for 2010/2011 Financial Year released on March 26, 2012.

According to results released by President Mwai Kibaki and Prime Minister Raila Odinga at Kenyatta International Conference Centre, Nairobi, the Authority was the highest ranked state corporation under the Ministry of Finance and was ranked number three out of 36 regulatory institutions.

The Authority was number 33 out of 178 State Corporations with a composite score of 2.1916 which translates to a “Very Good” performance indicating achievement of targets.


 
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