THE RELATIONSHIP BETWEEN PERFORMANCE MANAGEMENT

PRACTICES AND EMPLOYEE PERFORMANCE IN PUBLIC

ORGANIZATIONS IN UGANDA

BY
KYAMANYWA TEOPISTA NALULE
D86/15729/05

A THESIS SUBMITTED IN PARTIAL FULFILLMENT FOR THE

DEGREE OF DOCTOR OF PHILOSOPHY IN HUMAN RESOURCE
MANAGEMENT
OF KENYATTA UNIVERSITY

JUNE 2011

DECLARATION

This thesis is my original work and has not been presented for a degree in any
other University or any other award.

Signature:
Kyamanywa Teopista Nalule
D86/15729/05

Date

We confirm that the work reported in this thesis was carried out by the candidate
under our supervision:

Signature: ..
Dr Namusonge Mary Jabeya
Department Of Business Administration

Signature: .
Dr Kukunda Elizabeth Bacwayo
Faculty of Social Sciences
Uganda Christian University

Date.

Date..

DEDICATION
This work is dedicated to my sons Joseph, Alexander and Kenneth Kyamanywa
who have been there for me through thick and thin.

ACKNOWLEDGEMENT
I start by thanking the Almighty God for the gift of life and the favours He
granted me during my PhD studies.

My unreserved gratitude goes to my supervisors: Doctor Namusonge Mary

Jabeya and Dr Kukunda Elizabeth Bacwayo for the facilitation with study
materials, guidance and patience they both offered me throughout this study. I
am also very grateful to the Management of Kampala City Council and the
Ministry of Education and Sports for the permission they gave me to conduct the
research in the respective organizations.

The key informants in both

organizations are also highly appreciated for their participation in the study.

The following people are also greatly appreciated for their invaluable
contribution to the study: Professor Jonathan Chege, Dr Soita Paschal, Dr Ntayi
Joseph, Mr Kambaza Stephen and Associate Professor Mucunguzi.

Lastly, I am grateful to Kyambogo University for financial support given to me

to pursue these studies.

TABLE OF CONTENTS
Page
Title page..i
Declaration.. ii
Dedication. ..iii
Acknowledgement....iv
Table of Contents..v
List of Tables....xi
List of Figures.xiii
Abbreviations and Acronyms...xiv
Abstract.xv

CHAPTER ONE
INTRODUCTION
1.1

Background to the study..1

1.2

Statement of the Problem.6

1.3

Objective of the study.7

1.4

Specific objectives...7

1.5

Hypotheses...8

1.6

Significance of the Study9

1.7

Scope of the Study..10

1.7.1

Geographical Scope10

1.7.2

Time Frame.....11

1.7.3
.
1.8

Content Scope.....11
Chapter Summary....13
5

CHAPTER TWO
LITERATURE REVIEW

Page

2.1

Theoretical Framework ..14

2.2

Related Literature on the study variables.18

2.2.1

Relationship between Decision Rights and Employee Performance .18

2.2.2

The Relationship between Incentives and Employees Performance ..29

2.2.3

Relationship between Performance Contracts and Employee

Performance.38

2.2.4

Relationship between Organizational Resources and Employee

Performance 42

2.2.5

Relationship between Performance Measurement and Employee

Performance.47

2.3

Government Policy..57

2.4

Critical Review of Major Issues..58

2.5

Summary and Gaps Filled in by the Study.62

2.6

Conceptual Framework64

2.7

Chapter Summary....65

CHAPTER THREE
RESEARCH METHODOLOGY
3.1

Research Design...66

3.2

Target Population.67

3.3

Sample size determination...68

3.4

Sampling Design.69

3.4.1

Interview Sample.71

Page
3.5

Sources of Data..72

3.6

Data Collection Procedure and Instruments...72

3.6.1

Procedure....72

3.6.2

Instruments..73

3.6.3

Questionnaire...74

3.6.4

Interview guides..78

3.7

Pre-testing the Instruments..79

3.7.1

Validity of the Questionnaire...79

3.7.2

Reliability of the Questionnaire...81

3.8

Data Management83

3.9

Data Analysis...83

3.9.

Research Model...86

3.10

Chapter Summary....88

CHAPTER IV
PRESENTATION AND DISCUSSION OF THE FINDINGS
4.1

Sample characteristics..90

4.2

A Comparison between Performance Management Practices and

Employee Performance across Organizations 93

4.3

Factorial Analysis....96

4.3.1

Principal Components for Performance Management Practices.96

4.3.2

Performance Component Matrix101

4.3.3

Government Policy Component Matrix.104

7

Page
4.4

Inferential Analysis107

4.4.0

Hypotheses Testing...108

4.4.1

Hypothesis 1: Relationship between Decision Rights and Employee

Performance.108

.4.4.2 Hypothesis 2: Relationship between Incentives and Employee

performance...110
4.4.3

Hypothesis 3: Relationship between Performance Contracts and

Employee Performance in the Public Sector in Uganda..111

4.4.4

Hypothesis 4: Relationship between Organization Resources and

Employee Performance.113

4.4.5

Hypothesis 5: Relationship between Performance Measurement and

Employee Performance.....115

4.4.6

Hypothesis 6: The Interactive Effect among Performance

Management Practices, Government Policy and Employee
Performance......117

4.5

Conclusion120

4.6

Discussion of the Findings...121

4.6.1

Relationship between Decision Rights and employee performance.123

4.6.2

Relationship between Incentives and Employee Performance 128

4.6.3

Relationship between Performance Contract and Employee

Performance.133

4.6.4

Relationship between Organization Resources and Employee

Performance135

4.6.5

The Relationship between Performance Measurement and

Employee performance...139

4.7

Government Policy...145

4.8

Chapter Summary....................147
8

CHAPTER VI
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Page
5.1

Summary of the findings148

5.2

Conclusion..155

5.3

Recommendations..156

5.4

Areas for Further Research.158

5.5

Policy Implications..................159

5.6

Contribution to knowledge..160

5.7

Chapter Summary162

REFERENCES.163

APPENDICES
Appendix I

Stratum sample size calculations for Kampala

City Council...182

Appendix II

Stratum sample size calculations for ministry of

education and sports..184

Appendix III Questionnaire for Kampala City Council (KCC) and the
Ministry of Education and Sports (MoES) Middle
Managers, Supervisors and Operatives ...186
Appendix IV Interview Guide for Top Managers...195
Appendix V

Interview Guide for Supervisors...196

Appendix VI Interview Guide for Operatives...197

Appendix VII Interview Coding Framework..198
Appendix VIII Interaction Analysis201
Appendix IX Chi-square Tests and Directional Measures206
9

Page
Appendix X

Partial Association of a 3-way Interaction (Relationship)

Among Variables....210

Appendix XI Parameter Estimates of the Significant 3-way Interaction

(Relationship) Among Variables..212

10

LIST OF TABLES
Page
Table 3.1

Employee Strata.70

Table 3.2

Summary of Study Variables and Their Operationalisation..72

Table 3.3

Showing Content Validity Index (CVI)..80

Table 3.4

Reliability Test Findings.82

Table 4.1

Showing Sample Characteristics of Respondents across

Kampala City Council and the Ministry of Education and
Sports...91

Table 4.2

Showing a Comparison between Performance Management

Practices and Employee Performance across Kampala City
Council and the Ministry of Education and Sport .....94

Table 4.3

Shows the Mann-Whitney (U) Test for the Mean Difference

between Kampala City Council and the Ministry of
Education and Sports in Terms of Performance
Management Practices and Employee Performance..95

Table 4.4

Showing Performance Management Practices Rotated

Component Matrix.97

Table 4.5

Showing Performance Rotated Component Matrix..101

Table 4.6

Government Policy Rotated Component Matrix..105

Table 4.7

Showing the Relationship between Decision Rights and

Employee Performance in the Public Sector in Uganda ..108

Table 4.8

Showing the Relationship between Incentives and

Employee Performance in Public Organizations
in Uganda .110

Table 4.9

Showing the relationship between Performance Contracts

and Employee Performance in the Public Sector
in Uganda .112
11

Page
Table 4.10

The relationship between Organization Resources

and Employee Performance in Public Organizations
in Uganda ...114

Table 4.11

Showing the Relationship between Performance

Measurement and Employee Performance in the Public
Sector in Uganda..116

Table 4.12

A 3-way Interaction Effect (relationship) Among

Performance Management Practices, Government
Policy and Employee Performance in the Mode ...118

12

LIST OF FIGURES
Page
Conceptual Framework64

13

ABBREVIATIONS AND ACRONYMS

CFs

Critical Success Factors

GDP

Government Development Plan

IMF

International Monetary Fund

KCC

Kampala City Council

KPIs

Key Performance Indicators

MoES

Ministry of Education and Sports

PCA

Pragmatic Content Analysis

PDM

Participative decision making

PSRRC

Public Service Review and Reorganization Commission

WB

World Bank

14

ABSTRACT
Uganda has witnessed persistent poor employee performance in public
organizations since mid 60s, which scholars attribute to the 1966/67 crisis and
the political turmoil of the early 70s up to mid 80s. Despite governments effort
to avert the crisis by introducing reforms to improve employee performance, the
situation has not improved. The studys main objective was to investigate
whether there is a relationship between performance management practices
(decision rights, incentives, performance contracts, organization resources and
performance measurement) and employee performance in public organizations
in Uganda. The study was conducted at Kampala City Council and the Ministry
of Education and Sports. Data was collected from a stratified random sample of
517 participants and from a purposively selected sample of 32 respondents. A 5point Likert scale questionnaire and three interview guides were used to collect
data. The Principal component analysis was used to establish the number of
major components which accounted for most of the variance within the
performance management practices, government policy and employee
performance. The Mann-Whitney test was used to establish the mean difference
between the two organizations. Pearson chi-square test was used to establish the
relationship between the performance management practices and employee
performance. Log-Linear analysis was used to establish the interactive effect
among the performance management practices, government policy and employee
performance. Qualitative data was analyzed using pragmatic content analysis.
The results of the study revealed that the selected performance management
practices explained 54% of employee performance while 46% was explained by
other factors. Findings also indicated that the Ministry of Education and Sports
had better performance management practices than Kampala City Council. The
study findings also established that performance management practices had a
significant positive relationship with employee performance apart from
incentives that had an inverse relationship with employee performance. Findings
also revealed that there was a 3-way order interactive effect among performance
management practices. Performance measurement, government policy and
employee performance had the most critical interaction effect. On the basis of
the findings, it was recommended that public organization managers and policy
makers must ensure that the performance measurement tool used in public
organizations is modernized to spell out what it really intends to measure.
Measurement should be a continuous process with immediate feedback given to
employees. The performance gaps must be addressed in line with government
policy. Secondly, public sector managers must ensure that the incentive systems
in place are modernized by making them more attractive so as to induce
employees to perform optimally. Managers must exercise procedural and
distributive justice in the administration of the rewards. They should also ensure
that decisions are decentralized to allow full employee participation in the
decision making processes. Lastly public sector managers must see to it that
organization resources acquisition and development are available and accessed
by all their employees.
15

CHAPTER ONE
INTRODUCTION
1.1 Background to the study
At independence in 1962, the Uganda government inherited a Public Service that
had recruited public servants through open competition regardless of class,
ethnicity, race, sex or religion (Apuki, 2007; DFIDEA-U, 2001). Promotion was
purely on merit and performance was determined through confidential annual
reports on all public servants (Langseth, & Mugaju, 1996). The Public Service
was small but efficient, motivated, well-paid with fully equipped offices (Apuki,
2007). Due to the political turmoil and economic decline that prevailed during
the 1970s however, the Public Service deteriorated sharply and these principles
were rapidly eroded. A number of factors were responsible. These factors
included inter-alia rapid africanization of the service, creation of amorphous
structures, administrative inexperience, political interference and sectarianism
(Apuki, 2007; Yahaya, 1999; Langseth, & Mugaju, 1996).

Even before the political upheavals of the 1970s, the seeds of inefficiency and
poor performance had taken root. The problems in the Public Service were
linked to the political crisis that strangled the country in 1966/67 when the semi
Federal Constitution was abrogated and powers that had been delegated to the
Public Service Commission (PSC) and the Local Government were centralized
(Apuki, 2007; Mitala). This marked the beginning of the collapse of the viable
institutions in delivering services, supervising ethical procedures and spreading
16

development (Apuki, 2007). In order to overcome this stagnation in the delivery

of services by Public Organizations, the Public Sector came up with reforms or a
new approach to the management of performance also known as New Public
Management (NPM) (Mitala, 2006). However, the above concerns have not
been achieved by the Ugandan public sector (Apuki, 2007; Mitala, 2006).

The current public sector reforms in Uganda are linked to the Structural
Adjustment Programmes, (SAPs) that were designed and advocated for by the
World Bank (WB) and the International Monetary Fund (IMF) since the 1980s
(Mitala 2006; World Bank Report 1996). Structural Adjustment Programmes
(SAPs) were designed in the 1980s from private sector principles as a response
by the major international creditor agencies, the World Bank (WB) and the
International Monetary Fund (IMF) to improve service delivery. This was in
response to the growing economic crisis and balance of payments problems
encountered by many developing countries subsequent to the two major oil
shocks and poor governance of the 1970s (Shaw, 1991; Marobela, 2008). The
new reforms, also known as New Public Management (NPM) have become a
common phenomenon around the globe (Marobela, 2008; de Waal, 2007; Kobia
& Mohammed, 2006; Mitala 2006; Shaw, 1991).

NPM applies practices such as downsizing of the public sector while improving
economic efficiency, demands for public accountability and applies modern
human resource policies like motivating workers through attractive incentives.
17

Incentives include things like paying employees basing on their performance,

training and developing workers to improve performance, setting attainable
performance standards with realistic performance goals. Other incentives include
contracting employees on clear and attractive terms. Establishing performance
standards and measures of performance are some of the incentives emphasized
(World Bank Report, 1996). With these initiatives, the Public Sector is expected
to offer value for money while being transparent in all its activities and is urged
to be fair to employees and clients. NPM urges the Public Sector to become
competitive, customer-focused and mindful of shareholders while demonstrating
profitability.

It is also expected to increase efficiency and flexibility as it

improves workers incentives (Marobela, 2008; de Wall 2007; Verbeeten 2007,

Mitala, 2006; Shaw, 1991).

In Africa, Public Service reforms have been introduced at different periods

(World Bank, 1993; 1996; Ayeni, 2001; Marobela, 2008). In Botswana for
instance, public sector reforms were introduced over three decades ago
(Marobela, 2008). The main reason of such reforms was to modernize and
enhance efficiency in the Public Service. The reforms introduced in Botswana
are modeled around the New Performance Management (NPM) (Marobela
2008). A government report (Republic of Botswana, 2000a, b) identified four
new interrelated reforms which are now being implemented throughout the
Botswana

Civil

Service

namely:

performance

management

system;

decentralization; human resources development; and computerization of

18

personnel management system. In addition these are accompanied by the

privatization policy that sought to commercialize government activities. This
was the general framework from which the current reforms that were radically
changing the public sector are unfolding (Ayeni 2001; Mitala, 2006; Marobela,
2008).

According to Kobia and Mohammed (2006), in Kenya the government started

implementing public sector reforms way back in 1993 with the aim of improving
service delivery. The implementation of different types of reform interventions
has been carried out in three phases. However, newer interventions have been
introduced in the last six years (Kobia & Mohammed 2006).

One such

intervention relates to performance contracting in the state corporations and

government ministries (Kobia & Mohammed 2006). Performance contracting is
part of the broader public sector reforms aimed at improving efficiency and
effectiveness in the management of public affairs (Kobia & Mohammed 2006). .

In Uganda, the Idi Amin military regime which captured power in 1971 brought
a total collapse of the Civil Service (Mitala, 2006). The political instability that
followed later (Okello Lutwas Military takeover) aggravated the chaos (Public
Service Reform Commission Report, 1990).

The Public Service was ruined,

leading to many cases of low quality output, disregard of procedures, lack of

guidance and direction. The expansion of the Public Service for purposes of
patronage, and job creation, was accompanied by the duplication of services,
19

poor co-ordination and a general decline in performance standards (Apuki,

2007). According to Mitala, (2006), Public Service became inefficient,
ineffective, unresponsive, demoralized, over-bloated without justification and ill
equipped with poorly paid civil servants.

With the ascent of the National Resistance Movement (NRM) Government into
power in 1986, one of the institutions that needed reform was the Public Service.
In 1989, the Government constituted the

Public Service Review and Re-

organization Commission (PSRRC 1989/90) to undertake a study with a view to

coming up with recommendations on how best service delivery could be
improved in Public Service (Mitala, 2006).

The PSRRC made 255 recommendations to the Government and Results

Oriented Management (ROM) was one of the recommendations that were made.
The others included:

Rationalization of Government Ministries and

Departments, downsizing the service, divesture of non-core functions,

improvement in physical records management, pay reform, issuance of
performance contracts, inclusion of stakeholders in the decision making
processes on issues that affect their jobs, retraining and development of workers,
introduction of new staff performance appraisal scheme, setting of National
Service Delivery Survey Standards among others. All these reforms were
borrowed from New Public Management Principles (Mitala, 2006).

20

The current study sought to establish the relationship between performance

management practices and employee performance in public organizations in
Uganda.

Public organizations are divided into two:

that is, the Local

Government organizations and the Central Government organizations. Kampala

City Council is a Local Government organization charged with the provision of
social services to Kampala City dwellers. Kampala City Council was picked to
represent all public organizations in the Local Government because of its size
measured in terms of the number of employees. The Ministry of Education and
Sports on the other hand is a public organization under the direct responsibility
of the Central Government in charge of implementation of education related
government policies. By comparison with other Government Ministries, the
Ministry of Education and Sports is the largest in terms of employee capacity
and size (it has the Headquarters, Constituency Departments, Institutions of
Higher Learning, Training Colleges and Schools) (Ministry of Education and
Sports Databank, 2009).

1.2 Statement of the Problem

Although the Uganda Government has spent a lot of resources on the civil
service reforms since their introduction in 1991, employee performance in public
organizations is not improving Apuki, 2007; Mitala, 2006). This appears to be a
big problem for both the Government and the civil service generally.
Government reports and scanty studies adduced so far point to poor salaries, job
insecurity and insufficient physical resources as the major causes of poor
21

employee performance in public organizations in the country (Werikhe, 2002;

Namutebi, 2000; Kyewalabye, 2008; Kyewalabye, 2009). However these factors
have not been verified empirically.

In light of the recent civil service reforms

which were introduced in public organizations in the country, there exists very
limited empirical evidence that suggests that any relationship exists between the
reforms and employee performance in the public sector in Uganda (Werikhe,
2002; Namutebi, 2000; Apuki, Kyewalabye, 2009). The purpose of this study
therefore, is to fill a gap by providing empirical evidence on the relationship
between performance management practices (decision rights, incentives,
performance contracts, organization resources and performance measurement)
introduced in the public sector and employee performance in public
organizations in Uganda. The study was also intended to examine the interaction
effect among performance management practices, government policy and
employee performance in public organizations in the country which past studies
have not done so far.

1.3 Objective of the study

The objective of this study was to establish the relationship between
performance management practices and employee performance in public
organizations in Uganda.
1.4 Specific objectives
The study sought to address the following specific objectives:

22

i.

To establish the relationship between decision rights and employee

performance in public organizations in Uganda.

ii.

To assess the relationship between incentives and employee performance

in public organizations.

iii.

To examine the relationship between performance contracts and

employee performance in public organizations.

iv.

To establish the relationship between organization resources and

employee performance in public organizations.

v.

To examine the relationship between performance measurement and

employee performance in public organizations.

vi.

To determine the relationship (interaction effect) among performance

management practices (decision rights, incentives, performance contract,
organization resources, performance measurement), government policy
and employee performance in public organizations in Uganda.

1.5 Hypotheses
H1

There is a relationship between decision rights and employee

performance in public organizations.

H2

There is a relationship between incentives and employee performance in

public organizations.

H3

There is a relationship between performance contracts and employee

performance in the public organizations.

23

H4

There is a relationship between organization resources and employee

performance in public organizations.

H5

There is a relationship between performance measurements and

employee performance in public organizations in Uganda.

H6

There is an interaction effect (relationship) among performance

management practices, government policy and employee performance in
public organizations in Uganda.

1.6 Significance of the Study

Information generated in the study on the best performance management
practices might assist policy makers, managers and supervisors when they are
drawing performance improvement policies.

Secondly, managers and

supervisors could operate from informed positions when drawing work

improvement plans. The study was also intended to create awareness among
operatives so that they are aware of practices that can enhance their performance.
In addition, the study may yield useful practical applications for consultants and
advisors in the area of performance management practices and their applicability
in public organizations in Uganda and at Kampala City Council and the Ministry
of Education and Sports in particular.

The study might contribute to the

literature of performance managment that could be of use to scholars and other

interested parties.

24

1.7 Scope of the Study

1.7.1 Geographical Scope
The study was carried out at Kampala City Council and the Ministry of
Education and Sports. Currently, Kampala City Council is in Kampala City, in
Kampala District in Uganda. It covers an area of 195 square kilometers and has
a population of about three million (3,000,000) inhabitants with an annual
demographic growth rate of 3.9% and has an average density of 51 inhabitants
per hectare (Population and Housing Census, 2002). The City Council is divided
into five geographic Divisions of:

Kampala Central, Makindye, Nakawa,

Lubaga and Kawempe. The Divisions are expected to ease administration by

ensuring effective delivery of social services (education, health care, safe water,
sewage disposal and garbage management among others) to the City dwellers
(Kampala City Handbook, 2000).

The Ministry of Education and Sports

(MoES) is located in Kampala City on Parliament Avenue opposite the

Parliamentary Building. This Ministry is in charge of regulating and providing
formal primary, secondary, further and university education for people in
Uganda. The Ministry of Education and Sports also regulates education for preprimary, over age, children in pastoral areas, and fishing villages and those in
employment who are too old to return to school. The Ministry of Education and
Sports has a work force of 300 full-time employees and its mission is to provide,
support, guide, coordinate, regulate and promote quality education and sports for
all persons in Uganda for national integration, individual and national
development (Ministry of Education and Sports 2003/04: Education Annual
25

Performance Report).

This implies that the two organizations which were

studied have a significant influence on the lives of many people in Uganda. This
makes them truly public service organizations.

The purpose of this study was to establish whether there is a relationship

between performance management practices and employee performance in
public organizations in Uganda with particular reference to Kampala City
Council, a Local Government Unit and the Ministry of Education and Sports, a
Central Government Ministry.

1.7.2 Time Frame

The study considered the period from 2005 to 2009. The period was singled out
because this was the period when new performance management practices were
emphasized by governments globally and by Uganda in particular. In addition, it
was from the year 2005 to 2009 that the public was keenly interested in
employee performance in public organizations in the country.

1.7.3 Content Scope

The study examined the relationship between performance management
practices and employee performance in public organizations in Uganda. It also
determined the interactive effect among performance management practices,
government policy and employee performance in public organizations.

The

study was underpinned by the following theories: the Goal Setting theory of
26

Locke, and Latham, (2002), which assumes that setting of performance goals
and involving employees in decision making processes on issues that concern
them and their jobs enhances workers performance.

The Agent theory of

Bainman, (1990), that assumes that giving employees performance contracts

that are matched with adequate incentives increases workers performance. The
Resource Based View (RBV) of Barney, (1991) which assumes that when
employees are empowered with up-to-date organizational resources (knowledge,
skills and information technology) their performance increases.

The performance measurement theory, as proposed by de Waal, (2006) and

Kaplan, (2001) was a component of the study. According to de Waal, (2006)
and Kaplan, (2001), performance measurement system is a set of metrics used to
quantify both the efficiency and effectiveness of actions.

Performance

measurement serves the purpose of monitoring performance, identifying the

areas that need attention, enhancing motivation, improving communication and
strengthening responsibility and accountability (de Waal, 2006; Kaplan, 2001).
The view was strongly supported by Schmitz et al in Busi, & Bititci, (2006) as
well.

In this study, the independent variables were:

decision rights, incentives,

performance contracts, organization resources and performance measurement.

Government policy was the intervening variable while employee performance
was the dependent variable viewed in terms of quantity of work, efficiency,
27

accuracy, quality and reputation of work,

work excellence, innovation and

employee morale.

In conclusion, in order to assist the public organizations to improve performance,

it was necessary to establish whether there is a relationship between the
performance management practices (decision rights, incentives, performance
contract, organization resources, and performance measurement) in the public
sector. Public Organizations are regulated by government policy. For that
matter, it was imperative to establish the interaction effect among performance
management practices, government policy and employee performance in public
organizations.

1.8 Chapter Summary

This chapter was an introduction of the research and it explained the motivation
for the study. The statement of the problem, study objectives, research
hypotheses, significance and study scope were spelt out before the conclusion.
The following chapter presents a review of literature that is related to the study.
Chapter three explains how the supportive data was collected and analyzed. The
fourth chapter follows with the presentation and discussion of the study findings.
Finally, the study summary, conclusion, recommendations, policy implications
and areas for future studies appear in the last chapter.

28

CHAPTER TWO
LITERATURE REVIEW

A number of prominent performance management scholars have advanced

theories in an attempt to explain underlying factors that affect employee
performance in work settings. This study has come up with specific theories that
explain the phenomenon of the possible underlying causes of poor employee
performance in public organizations. The literature addressed in this chapter has
a brief introduction of the theoretical framework. It then presents the study
variables preceded by their operational theories: decision rights and employee
performance; incentives and employee performance; performance contracts and
employee performance; organization resources and employee performance;
performance measurement and employee performance and government policy
respectively. Finally, a critical review of major issues is discussed followed by
the summary and an illustration of the conceptual framework.

2.1 Theoretical Framework

The study was underpinned by various performance management theories
advanced by a number of scholars who tried to explain the phenomenon
underlying employee performance in public organizations. Four theories were
used to operationalize the study.

29

2.1.1 Goal Setting Theory

The goal setting theory which assumes that a direct relationship exists between
the definition of specific and measurable goals and performance was the first to
be applied in this study. If managers know what they are aiming at, they are
motivated to exert more effort, which increases performance (Locke & Latham,
2002). The theory was advanced by Latham & Locke, (2002) who emphasized
goal setting and encouragement of decision rights as a basis for employee
performance. de Waal, (2007) observes that taking responsibility for results
requires that organizational members are given the opportunity to influence their
results favorably and have the freedom to take action. This implies that people
have to be authorized by their managers to independently and swiftly take action
on problems without having to ask for permission first. Decision rights allow
greater involvement of employees in deciding on issues that affect their work
(Locke & Latham, 2002). This implies that workers have a say in defining the
right Key Performance Indicators (KPIs) and the mandate to establish Critical
Success Factors (CSFs) in relation to their job responsibilities. According to
Armstrong, (2006) employees are most likely to meet or exceed performance
goals when they are empowered with the authority to make decisions and solve
problems related to the results for which they are accountable.

The performance goals of an organization represent a shared responsibility

among all its employees each of whom has a stake in the organization's success.
A critical challenge for private and public organizations alike is ensuring that
30

this shared responsibility does not become an unfulfilled responsibility.

Accountability helps organizations to meet this challenge. Underlying employee
empowerment is management's view of its employees as assets that are capable
of contributing to the growth of their respective organizations rather than costs to
be borne by the Organizations. The contributions of individuals and teams are a
starting point for enumerating the results for which they are accountable (Locke
& Latham, 2002; Armstrong, 2006). The goal setting theory was used to support
decision rights in the study.

2.1.2 The Agency Theory

Baiman, (1990), stresses that the agency theory assumes that a relationship exists
when one or more individuals (called principals) hire others (called agents) in
order to delegate responsibilities to them. The rights and responsibilities of the
principals and agents are specified in their mutually agreed-upon employment
relationship. Agency theory attempts to describe that relationship using the
metaphor of a contract.

Agency theory assumes that individuals are fully

rational and have well-defined preferences and beliefs that conform to the
axioms of expected utility theory (Bonner & Sprinkle, 2002). Furthermore, each
individual is presumed to be motivated solely by self-interest (Baiman, 1990).
This self-interest can be described in a utility function that contains two
arguments: wealth (monetary and non-monetary incentives) and leisure.
Incentives are extrinsic motivators where pay, bonuses or career perspectives are
linked to performance (Bonner and Sprinkle, 2002). Incentives that are not
31

contingent on performance generally do not satisfy this criterion; thus, the

agency theory suggests that incentives play a fundamental role in motivation and
the control of performance because individuals have utility for increases in
wealth (Bonner, & Sprinkle, 2002). The agency theory was used to explain the
importance of incentives and performance contracts in the study.

2.1.3 The Resource Based View

An alternative to the agency theory is the Resource Based View (RBV) as a
model of understanding strategic organization resources that can enhance
employee performance. According to Barney, (1991) key resources have been
identified as intangible assets (such as client trust and relationships) and
capabilities or tangible resources (such as skills and knowledge, technology and
information).

The resource based view was used to support organization

resources in the form of knowledge, skills and information technology in the

study.

2.1.4 The Performance Measurement theory

Finally, de Waal, (2007) and Kaplan, (2001) observe that in order to assess the
success of a performance management system, there is need to measure the
structural side which deals with the structure implemented for performance
measurement. This usually includes critical success factors, key performance
indicators and often a balanced scorecard and the behavioural side which deals
with organizational members and their use of the performance management
32

system (de Waal, 2007 and Kaplan, 2001). The performance measurement
theory was used to explain the importance of employee evaluation in the study.

The question arising here is whether there is a relationship between the

performance management practices (decision rights, incentives, performance
contracts, organization resources and performance measurement) as advocated
by the selected theories and views in the study.

2.2 Related Literature on the Study Variables

2.2.1 Relationship between Decision Rights and Employee Performance
The goal setting theory (Locke & Latham, 2002), was selected to guide this
aspect of the study. The literature below explains the linkage between decision
rights and employee performance.

Decision rights allow greater involvement of employees in deciding on issues

that affect their work. So workers have a say in defining the right Key
Performance Indicators (KPIs) and establish Critical Success Factors (CSFs)
concerning their job responsibilities. Armstrong, (2006) observes that employees
are most likely to meet or exceed performance goals when they are empowered
with the authority to make decisions and solve problems related to the results for
which they are accountable. This is in line with Hewitt, (2002) who argues that
the contributions of individuals and teams are a starting point for enumerating
the results for which workers are accountable.
33

According to Michelle, (2007) and Helmut, (2002), the most important decisions
in an organization affect not only the decision maker but also other members of
the organization. The allocation of decision rights according to Helmut (2002);
Jensen and Mechelle (2007) can resolve the problem of externalities that may
have impact on other stakeholders when important decisions concerning them
are made without their participation. According to Osterman, (1994), around
45% of workers decide the mode of doing their job. Aghion, and Tirole, (1997)
support the view when they observe that as interests between management and
employees become more aligned, delegation of decision-making rights motivates
employees to improve their performance without causing severe disruption to the
decision-making process. Juliette and Jeff (2005) however argue that there are
certain circumstances (such as sensitivity and nature of the matter) under which
the employer may reserve authority over decision rights.

Michelle, (2007) observes that employee involvement in decision making

sometimes referred to as participative decision-making (PDM) is concerned with
shared decision making in the work situation. In support of the argument, Hewitt
(2002) notes that there are certain individual contingency factors which may
support participative decision-making. For example, when the sets of choices
are clear and employees show greater desire for job involvements, it is healthier
to let them participate in the decision making process. Participative decisionmaking in organizations may also be necessary when developing greater
individual job responsibility.
34

In agreement with Hewitt, (2002), Locke and Schweiger, (1979) stress that
decision making should be a joint process between managers and subordinates.
A democratic employer sits with the employees to decide on the future course
of his business (Michelle & Lori, 2007). The observation assumes that
employees are partial owners of the business. Thus participating in deciding on
what should be done simply determines the future course of their business
through objectives.

On the other hand employees in public organizations are only hired to achieve
the vision(s) of their employer (government). The assumption would therefore
not hold in case of public organization workers (Lock & Schweiger, 1979).
Public organizations are there to serve public interests and hence their out look
should hinge on the interests of the public

(Jensen & Meckling, 1992).

However, Aghion and Tirole (1997); Ghosh, (2009) argue that participative
approach to decision making is inappropriate when choices are complex,
difficult to define and varied in nature.

This is a situation where task

interdependence is very high; the environmental change is rapid thus hindering

employee participation in decision making. This complexity can be resolved
through delegation.

Julliette & Jeff (2005) contend that

that employee

participation in the decision making process can also be realized through

delegation in which the subordinates gain greater control, greater freedom of
choice with respect to bridging the communication gap between management
and the workers. Supporting Julliette & Jeffs (2005) observation, Bonner and
35

Sprinkle, (2002) stress that employee involvement in the decision making

process is the employees chance to participate in an organizations strategic
planning activities. In support of Bonner and Sprinkles (2002); Julliette and
Jeff, (2005) argue that the future direction (goals and objectives) of an
organization is determined by the employer when he/she promotes employee
involvement in deciding the course of action to take in order to achieve the
already established objectives. This improves workers commitment (Julliette &
Jeff 2005). However, Ghosh, (2009) on the other hand observes that public
goals and objectives are in most cases determined by the government and then
communicated to the responsible public organizations for implementation. For
that matter, it is up to the concerned public organizations to ensure appropriate
development of the strategic plans for the achievement of public goals and
objectives by selecting expert and knowledgeable employees to handle the
process. However what would be most appropriate is to involve employees in
the strategic planning of activities before implementation (Michelle, 2007). This
is likely to motivate workers because they would only be implementing their
own decisions (Locke & Schweiger 1979; Helmut 2002; Michelle, 2007).

Barringer and Bleudorn (1999) argue that full employee involvement in decision
making allows for the decentralization of decision rights. That is, the concerns
of the subordinates are catered for during planning. Similarly, the empirical
studies by different researchers: Wagner (1994); Cindy (2002); Cappelli and
Neumark (2001); Awolabi and Adeola (2011) revealed that decentralizing
36

decision rights alleviates the burden on top management as well as cutting

unnecessary communication up and down the hierarchy and reduces the agency
costs.

Partial employee involvement in decision making (centralization of decision

rights) on the other hand ignores the concerns of the frontline employees (Cindy,
2002).

Barringer and Bleudorn, (1999); Li et al., (2006) advocate for full

employee involvement in decision making because frontline employees are

people closest to the customer and are knowledgeable about market needs and its
dissatisfaction. Frontline workers also know how to address the dissatisfaction which is a central element in the success of any organization. On the contrary,
an empirical study by Kazuyuki and Kanamori, (2008) suggests that with
advancement of information communication technology (ICT), centralization of
decision rights can still capture the concerns of the floor employees in an
organization which would have only been possible through decentralization of
decision rights. This can be through the interaction between centralized and
decentralized decision making enabled by the ICT, where employees feed all the
necessary information about their customers and their decisions into the
computer system (Kazuyuki & Kanamori, 2008). This information is then
accessed by top management, screened and evaluated, decisions made by the top
management and then communicated to the concerned employees via ICT
systems (Kazuyuki & Kazuyuki, 2008).

37

Spreitzer and Mishra (1999) argued that having high performing employees is a
desire for all organizations in order to remain competitive. However, having a
high performing organization requires committed employees who appreciate the
factors that influence employee performance (Kazuyuki and Kanamori 2008).
An organization's ability to create and be innovative is the most important source
of its competitive edge (Kazuyuki & Kanamori, 2008). However, creativeness
and innovativeness partly hinge on an employees ability to make decisions
concerning how best to do his or her work and its future course. Employees who
cannot make decisions concerning their work are in most cases not creative and
innovative. This is so because it is not up to them to decide what to do, how to
do it, when and what to improve or change because such decision matters are
centralized at the management level (Takahito & Kazuyuki, 2008).

Markey, (2006) argued that the participation of employees in the decision

making

significantly

improves

employees

performance

and

hence

organizations increased ability to meet its objectives. According to Black,

(2001), the expected benefits of employees involvement result in quality
improvement, better information flow, clear tasks goals, and quality decisions.
Increase in employees commitment and acceptance of decisions fosters a sense
of decision ownership due to having been involved in decision-making. This
increases the chances of effective implementation of the organizational
objectives.

38

Empirical evidence further suggests that employees better performance hinges

to a great extent on workers involvement in the decision making processes
(Arthur, 1994; Carter, 1995).

These scholars stressed that employee

involvement in the decision making process contributes to efficiency because

they gain the capacity to enhance the quality of decision making by increasing
the inputs and promotes commitment to the outcome of the decision making
process in the workplace.

According to Spreitzer and Mishra (1999), employees who have made decisions
concerning their own work and how best to do it were very satisfied with what
they were doing.

Their performance was found to be significantly high

compared to the employees who lacked influence in their own work and how to
handle it. In support of Spreitzer and Mishra (1999), Chang & Lorenzis (1983)
research findings revealed that a significant relationship exists between
frequency of employees consultation and organization commitment. The study
further established that if organizations are to realize any significant increase in
employees performance, workers involvement in decision making processes
should be considered as a crucial aspect of their performance. Wagner (1994)
similarly measured and discussed the benefits accruing to the organizations due
to employees involvement in the decision making processes. Findings of his
study revealed that when employees are adequately informed about matters
concerning them and are afforded the opportunity to make decisions relevant to
their work, organizations are likely to benefit through improved employee
39

performance.

Individual employees are also likely to benefit through job

satisfaction. These findings are supported by Williamsons (2008) later study

that established that employee involvement in the decision making on issues
concerning their jobs increases workers performance.

As a result of incorporating workers ideas and information in the decisions

made by organizations (organizational flexibility), product/service quality, may
improve Williamson, (2008). This is because employee involvement in the
decision making process contributes to greater trust and a sense of control on the
part of the workers. Through employee involvement, resources required in
monitoring employee compliance like supervision and following the work rules
are minimized. Reduced costs and the saved money can be spent on the
development of further employees decisions (Arthur, 1994; Spreitzer and
Mishra, 1999). Similarly, Kemelgor, (2002), observed that when employees are
given the opportunity to contribute their ideas and suggestions during decision
making, increased organizations performance is likely to be realized. This is
because greater employee involvement in decision making maximizes divergent
view points and perspectives. Empirical findings by Owolabi and Adeola,
(2011), too found that in order for an employee to perform well, she/he must first
feel good about what she/he is engaged in (job satisfaction). On the contrary,
Jensen and Meckling, (1990), argue that involving employees in the decision
making in ways that maximize their/organizations performance is an extremely
difficult and controversial management task. This is because organizations may
40

be indifferent about employees effectiveness in the making of quality decisions

that are consistent with the organization mission and objectives.

Jensen and Meckling, (1990), however observes that there are costs to be
considered before involving employees in the decision making process. The first
one rotates around delegating decision rights to employees who have the relevant
information but whose motivation and goals do not align with those of the
organization. The second aspect is the difficulty of transferring the relevant
information from the source to the decision maker because of arch of distortion.
Public organizations in Uganda seem to suffer from poor performance due to the
two costs identified (Jensen & Meckling 1990).

Poor performance of public organizations in Uganda has continued to be

witnessed despite the effort taken by the Public Service Commission to employ
well qualified and adequately informed public servants. High cost of gross
negligence of duty coupled with organizations inability to transfer the relevant
information from the source (the public) to the decision and policy makers in
public organizations, has led to poor performance. This situation results in gross
errors arising out of taking uninformed decisions and policies by the decision
makers. Cindy, (2002) argues that by involving employees in the decision
making process at levels where these combined costs are minimized, public
organizations can get optimal decision-making efficiency and therefore better
performance.
41

Williamson, 2008); Jacobs (2005), argue that finding an organizational spot

where decision costs are minimal is only part of the battle. Public organizations
must still deal with the fact that employees who are charged with decision
authority are inevitably motivated by their own personal and professional goals,
some of which are inconsistent with those of the organization. In order to
overcome these complexities in decision making, Jacobs (2005) recommends the
following steps: routine review and update on how decision authority is
distributed across employees in public organizations. What employees do, and
the environment in which they operate continually changes, hence decisionrights updates must become routine. A review should carefully assess where
various types of decisions are being made in the organization and whether those
particular points are still the most crucial in achieving organizations objectives.

In a study by Lee, (2008) about the effect of decision rights and noise pollution
control that was conducted at the Southern Methodist University, findings
revealed that workers who were involved in the decision making processes
exhibited excellent performance compared to their counterparts who were denied
decision rights regarding the option to control noise pollution.

Lee (2008)

reported that the experiment involved two groups with one group being
subjected to loud noise and in the middle of the exercise participants were denied
the right either to stop the loud music or let it continue. The second group was
subjected to the same loud noise and half-way the exercise, participants were
given the option of either stopping the noise or let it continue. The experiment
42

had differing implications on employee performance. Participants who were

denied decision rights demonstrated significant deterioration in their
performance. Their thinking became emotional, unimaginative, and dull. The
group that was given choices exhibited better performance. Much as the group
that was accorded decision rights experienced the same amount of unpleasant
noise as the group which had no option, its participants thought process
remained unaffected. The group with decision rights engaged in deep reflective,
creative thought and their performance was high. Thus, it was not the negative
external situation, but the perceived lack of involvement in the decision making
process for the group without decision rights, that caused the participants
diminished thinking capacity and thus poor performance.

In conclusion, the above literature on decision rights emphasizes the need for
involvement of employees in the decision making processes on issues that
concern them, their jobs and their work places if increased performance is to be
realized.

It has also been argued that participative decision making gives

workers a feeling of belonging (psychological safety) and makes them

responsible and accountable for their actions.

In the process performance

improves. It remains to be seen whether there is a relationship between decision

rights and employee performance in public organizations in Uganda.

43

2.2.2 The Relationship between Incentives and Employees Performance

The Agency theory asserts that a relationship exists between incentives and
employee performance (Bainman, 1990 in Smith & Hitt, 2007). This is in
agreement with other scholars who assert that incentives are rewards for a
specific behaviour, and they are intended to encourage and sustain good efforts
(Banda, 2007; Armstrong, 2006; Ivancevich, 2004). Similarly, Adams & Hicks,
(2000) view incentives as inducements or supplement rewards that serve as
motivational devices for a desired action or behaviour.

Ivancevich, (2004)

contends that motivating employees through incentives is crucial for morale

boosting in order to perform the seemingly challenging responsibilities and solve
problems thus achieving organizational objectives. Beardwell & Holden, (2001)
explain that incentives are either direct and extrinsic in nature or indirect and
extrinsic. According to the two scholars, examples of direct incentives are
financial benefits such as pay, salaries, salary top ups, subsidies, commissions
and bonuses, pension, illness/health/life insurance; over-time, clothing and
housing allowances.

Ivancevich, (2004) and Banda, (2007) observe that gain

sharing is another direct incentive that can induce the commitment of employees
to perform. Indirect incentives (intrinsic in nature) may include such benefits as
subsidized meals, clothing, accommodation, transport, gifts, travel, scholarships
for workers and their children and tax breaks.

44

Adam and Hicks, (2000), contend that indirect incentives may also include
flexible schedules, part-time or temporary work; sabbatical, study leaves,
holidays and vacation. Improving the work environment conditions for example
by putting in place occupational health and safety measures, putting in place
recreational facilities for workers to relax in, extending school access for
employees children; having proper infrastructure such as path and walk ways,
ventilated offices, and transport are motivating facilities that should be available
in work places if high employee performance is to be realized (Adam & Hicks,
2000).

In a study by Rajesh and Samwick, (2003) that sought to prove whether

incentives were aligned with employee responsibilities, it was established that
managers with explicit divisional responsibilities had lower pay-performance
than managers with broad oversight authority. Managers with broad oversight
authority in turn had lower pay-performance (incentives) than Chief Executive
Officers. Rajesh and Samwick, (2003) confirmed that incentives differ across
job classifications. The observation is important because of two reasons. First
of all it is evident that the internal structure of an organization aligns incentives
according to responsibilities among the various management levels. In addition,
pay-performance incentives differ across the managerial levels because of the
way organizations are structured. Thus incentives are simply meant to induce
the various employees especially managers, to take optimal actions. If incentives
are aligned to each employees responsibilities in the organization, it motivates
45

them to increase their efforts in relation to the incentives given to them (Murphy
& Oyer, 2001; Harold, 2003).

In contrast to the argument by (Harold, 2003; Murphy and Oyer), Rajesh and
Samwick (2003) noted that focusing on the incentives of the top ranking officers
only in public organizations may be an effective short term strategy but with
disastrous long term consequences. This is so because ordinarily, objectives get
accomplished through the activities of the lower employees. In agreement with
Murphy and Oyer, (2001), Barron and Glen, (2003) contend that without the
lower employees being motivated to do their work well, however much the top
ranking officials are motivated; objectives will not be satisfactorily
accomplished. Therefore, public organizations should motivate all their
employees regardless of their rank in the organization hierarchy (Harold, 2003).

An empirical study by Harold, (2003), proved that incentives increase the value
people attach to work goals. Rewarding people for exceeding targets motivates
them to spend more time on the rewarded tasks which leads to heightened
interest and satisfaction.

It also appears to strengthen self-confidence and

employee loyalty. Well-designed and implemented incentive systems increase

employee motivation, commitment, cost effectiveness and congruence (Harold
2003). In support of the above findings, empirical evidence adduced by Werikhe,
(2002), confirmed that 95% of the workers who participated in his study
confirmed that adequate rewards can induce employees to attain the desired
46

results.

In contrast, Verbeeten, (2007), found that incentives only improve

quantity but not quality performance.

Burgess & Ratto, (2003) in their study established that there were four major
types of incentive systems. In order to induce and sustain employee effectiveness
and efficiency, the appropriate incentives are: quota-based (performance goals);
piece rate-based (produce more units); tournament-based (competition); fixedrate based (specified amount for specified work). Similarly, other empirical
studies on pay for performance (performance goals) as an incentive: Namutebi,
(2000); Adams and Hicks, (2000); & Baker, (2004), confirmed that pay for
performance as an incentive system is effective and can be adopted by public
organizations as an incentive system to motivate their employees.

According to Sean, (2008), pay for performance is effective in motivating

employees since their rewards and exact pay hinges on their actual performance.
In line with Abraham Maslows hierarchy of needs theory, Armstrong, (2006)
suggests that man will always want to satisfy his physiological needs first.
Assuming that man can only satisfy his basic needs from his own pay and if his
pay is realized from his own performance, then he will increase his effort in
order to perform well and get higher pay so as to satisfy more basic needs. So,
in this case, pay for performance would have acted as an inducement to motivate
man (employees) to perform better.

47

In support of Seans (2008) observation, Harold, (2003) in an extensive survey

he carried out in 1,000 United States organizations, it was also established that
various forms of incentive systems greatly increased employees performance.
The study indicated that tangible incentives (money, gifts, travel) increase
performance by an average of 22%. Individual-based incentives resulted in a
27% gain while team-based incentives improved performance by 45%. The
study also confirmed that incentive systems work best when current performance
is inadequate, and that the cause of inadequate performance is motivational and
that desired performance can be quantified (how much; how often; how many)
(Harold, 2003).

Harold, (2003) further argues that for incentives to increase performance, goals
must be challenging and achievable. In terms of effectiveness of the incentive monetary or gift/travel - the study ascertained that monetary incentives yield a
27% increase in performance and gifts and travel incentives provided a 13%
increase.

Findings of this study established further that goal achievement

incentive systems have a positive impact on employee performance too. The

study revealed that 57% of the survey respondents surpassed their organizations
performance objectives and 92% met partial performance objectives for which
the incentive systems had been designed.

Sprinkle, (2000); Li, (2002) and Locke (2004), argue that sustaining
administration of adequate incentives to individual employees as their effort is
48

measured with immediate feedback increases workers effort.

Individual

employee performance in the long run improves due to the experience gained
through learning arising out of increased effort on a particular task. Sprinkle,
(2000), carried out a repeated measurement experiment between two groups (one
group was given incentives and the other was a control group) over different
periods on a cognitive task. The results suggested that performance is likely to
become more incentive sensitive over time. With incentives in place, employees
are likely to increase their effort especially on tasks involving reasoning in order
to find optimal solutions. Through task repetitions and feedback by management
regarding the outcome of an employees efforts, experience is gained and this
helps employees to eliminate many reasoning errors. Similarly, Namutebi,
(2000) in her empirical study, found that with respect to timeframe and
effectiveness of incentive systems, long-term incentive programs had the
strongest effect (44% performance gain) compared to intermediate term (30%
increase in performance) and short-term incentives (20% performance gain)
respectively.

In agreement with Namutebi, (2000), Kyewalabye (2008) noted that there will
always be an increase in performance when employees receive incentive-based
contracts. Workers on an incentive-based contract continually exert more effort
than employees receiving the flat-wage contract. Therefore Sprinkle, (2000);
Kyewalabye (2008) conclude that employees receiving the incentive-based
contract spend more time on a task which results in higher performance than
49

workers who receive the flat-wage contract. Sprinkle, (2000) further argues that
performance in terms of effort is just a function of the amount of time spent
along with the incentives attached to the accomplishment of a particular task.

Taking a cognitive example used by Sprinkle, (2000), as time goes on, an

individual given incentives should spend less time on a particular task than
individuals without incentives. Sprinkle, (2002) gives conditions necessary for
individuals receiving incentive-based contract to perform better compared to
individuals receiving a flat-wage contract: the form of the incentive contract
should motivate effort maximization. He recommends that public organizations
should design attractive incentive programs and implement them efficiently.

McGuire, et al., (2003), suggest that it is good to reward employees basing on

their social performance since public organizations to a large extent have a social
responsibility towards the public. A lot of literature advocates for an executive
incentive system (Burgess & Rotto, 2003; Rajesh & Samwick, 2003;
Kyewalabye, 2008; and McGuire, et al., 2003) to be established in public
organizations if public goods and services are to improve. They argue that
executive incentives are a visible and potentially important mechanism through
which Directors of public organizations direct managerial attention to specific
objectives having both financial and social implications to the public. Incentives
can therefore be a potentially important mechanism for directing managerial
attention to public social objectives.
50

McGuire, et al., (2003), further argues that executive compensation can be

manipulated by the board of directors of public organizations to reward
managers for pursuing specific objectives which are in public interest. Thus in
developing executive compensation plans and awarding executive incentives, the
Boards of Directors can encourage management to pursue social, as well as
financial objectives.

In this case, the financial rewards and other forms of

incentives given to executives may signal the public organizations commitment

to social performance, and may provide motivation for the achievement of social
policies (Johnsen, 2005; Rajesh & Samwick, 2003). According to Dixit, (2002)
and Lawler, (1992), performance improvement and productivity enhancement is
necessary in public organizations. In order to achieve this, public organizations
can embrace incentives in order to motivate their employees to use resources
more effectively and efficiently (Shaw; et al. 2002; Johnsen, 2005).

In

agreement with scholars who advocate for the importance of giving equitable
incentives to public employees, McGuire, et al., (2003) contend that the public
sector should increasingly link their employee incentives to their performance as
a motivating factor.

This is in line with Prendergasts (1999), earlier view when he argued that
performance should be the basis for awarding incentives to public officials. Pay
for performance is a very good incentive in motivating employees to perform
better since their earnings are based on individual performance. Thus the higher
the output, the higher should be the pay. This method of awarding incentives can
51

best work where individual performance can be measured, or where a teams

performance can be measured so that when rewarded, it can maximize its
members potential. This can also act as a solution where work interdependence
is rampant so that employees interdependence in performance can easily be
monitored, measured and rewarded accordingly (Prendergast, 1999).

In conclusion, most of the reviewed literature on incentives supports a view that

there is a relationship between incentives and employee performance. Scholars
argue that when performance is matched with meaningful incentives, employees
morale is boosted and in the process their job satisfaction and commitment to
performance increases. Incentives are also said to enhance workers loyalty to
their organization thus positively and strongly influencing workplace
performance (quantity and quality). However, public organizations must boost
incentives only when there is a motivation gap and during

situations of

challenging goals. It is essential to involve targeted recipients in the selection of

incentives where possible and to ensure equity and fairness to all employees. To
achieve incentive system success, the literature proposes that public organization
should focus on implementation, communication and continuous monitoring of
the incentive system and performance. The issue arising is whether there is a
relationship between incentives and employee performance in public
organizations in Uganda and thus the need for this study.

52

2.2.3 Relationship between Performance Contracts and Employee

Performance
The Agency theory assumes that relationship exists between performance
contracts and employee performance (Bainman, 1990 in Smith & Hitt, (2007).
Other scholars (Kobia and Mohammed, 2006) argue too, that governments all
over the world, view performance contracting as a useful managerial tool for
articulating clearer definitions of public objectives and supporting new
management monitoring and control methods. Performance contracting
organizes and defines tasks so that management can perform them
systematically, purposefully and with reasonable probability of achievement
(Kobia & Mohammed, 2006).

Performance contracts are based on the assumption that what gets agreed on,
gets done; if you cannot set and measure performance, you cannot reward it. If
you cannot recognize failure, you cannot correct it and if you can set targets and
show results, you can win public support. Kobia & Mohammed, (2006) observe
that performance contracts originated from the perception that the performance
in the public sector has been consistently falling below the expectations of the
public. Thus performance contracting is part of broader public sector reforms
aimed at improving efficiency and effectiveness in the management of Public
Services. Supporting the view held by Kobia and Mohammed, (2006),
Kyewalabye, (2008), recommended that clearly specified performance contracts
are some of the factors that help to enhance employee performance in public
organizations because of their motivational drive. Proper design of performance
53

contracts is very essential and should be a major concern to public organizations.

In the design of performance contracts, public organizations should concentrate
on the selection of appropriate performance indicators (parameters) if
performance contracts are to be effective. According to Poppo and Zenger
(2002), if performance contract parameters are not properly chosen or if they
contain some ambiguities, they may act as a basis for misusing public resources
by the civil servants. This state of affairs may prevail under the disguise of
responding to public needs through using wrong strategies which benefit the
employees and using improper ways to react to uncertainties. Thus performance
contracts must be designed after carefully examining and adapting to particular
public needs.

Yadong, (2002), suggests that the expected performance by the employer (the
principal) from the employee (the agent) should be primarily governed by the
performance contract that helps obviate moral hazards and attenuate the leeway
for opportunism. It establishes the condition and guidelines for the process of
carrying out the duties and responsibilities by public employees. A performance
contract provides an expected performance bound and an institutional framework
in which an employees rights, duties, and responsibilities are codified and the
goals, policies, and strategies underlying the anticipated contingencies are
specified. In the public sector, employees performance has to be governed by a
complete contract specifying what an employee is expected to do in order to
achieve expected performance.

Yadong, (2002), further suggests that for

54

contracts to be effective, cooperation among the employees and between the

employer and the employee has to be nurtured. This is however a dimension that
is often neglected in the designing of performance contracts yet it is an aspect
which is capable of influencing the feasibility and effectiveness of performance
engagements.

Yadong, (2002), continues to observe that performance contracts should be

drawn to indicate job responsibilities, flexible clauses and the attached rewards.
This is because

when contract are clearly drawn, it reduces the uncertainty

faced by public organization decision makers and the risks stemming from
opportunism on the part of employees. It provides a safeguard against ex-post
performance problems by restraining employees ability to pursue private goals
at the expense of organization goals and objectives. On the contrary, Bernheim
and Whinston, (1998) suggest that incomplete contracts may be optimal in
situations where some elements of enforcement are unverifiable. However, what
is unverifiable is based on the assumption of the uncertain environment but this
can be verified by properly adopting contingent plans in the performance
contracts which cater for the uncertain environment, thus there is no need to
adopt incomplete contracts basing on the suggestion by Bernheim and Whinston,
(1998).

When public organizations adopt incomplete performance contracts, ambiguity

may result which creates a breeding ground for shirking responsibility, non
55

performance and shifting of blame. It further raises the likelihood of conflict

through authority overlaps, and hinders the ability to coordinate activities,
utilization of resources, and implementation of effective strategies. Thus public
organizations when designing employee performance contracts should clearly
highlight each employees responsibilities, authority boundaries, and the chain of
command in order to avoid ambiguities (Yadong, 2002; Wu, & Roe, 2005).

Grinblatt and Titman, (2002), suggest that through performance contracts, it is

easy for employee performance to be screened in order to establish a match or
any deviations between the contractual performance and the actual performance.
If deviations are present, an account can easily be given, so as to find out
whether the performance mismatch has its roots in the way performance
contracts were designed or from the ineffectiveness of the employee. Whichever
way, the problem can be identified and rectified thus performance contracts can
be a useful managerial instrument in influencing employee performance in
public organizations.

In conclusion, public organizations should realize the importance of performance

contracts and their ability to stimulate employee performance especially when
they are matched with the desired incentives.

Establishing a relationship

between performance contracts and employee performance was among the

objectives of this study.

56

2.2.4 Relationship between Organizational Resources and Employee

Performance
The Resource Based View (RBV) of the firm assumes that a relationship exists
between the organizations key resources (knowledge, skills and information
technology). Possession and identification of key resources embodying these
essential features, along with their effective development and deployment,
allows the firm to achieve and sustain competitive advantage. Much as superior
performance is usually measured in financial terms such as higher profits,
increased sales or market share in private concerns, in public organizations,
performance measured through efficiency and effectiveness of social service
delivery. Whether it is in the private or public sector, superior performance
needs competence driven personnel equipped with adequate knowledge and
skills. These have to be backed by up-to-date ICT in order to drive organizations
to greater heights. Priem and Butler, (2001) observe that the intangible assets
and capabilities could be appropriated by the firm because the unique
combination of company philosophy, employee knowledge, and skills and other
idiosyncratic capabilities are difficult to separate or transfer.

Competence can be defined as an employees/organizations capability to

perform a specific task (Ivancevich, 2004). This definition recognizes that
competence is a precursor to public organizations viability and ability to
achieve public goals and objectives. According to Genevive, et al., (2001)
competence is simply a fit between an employee and the task. The focus on a
fit between an employee and a specific task can be useful when a public
57

organization tries to hire someone or when it attempts to create an effective

training plan.

Gold, (2001) observes that the same organizational resources that have
historically provided public organizations with competencies can also create
competency traps when environmental conditions change.

He notes that

competence traps may occur largely because of the general tendency of public
organizations to engage in exploitation (that is, the use and development of
things already known) at the expense of exploration (that is, the pursuit of new
knowledge) (Hansen, 2002). This is because the returns from exploiting existing
resources (knowledge, skills and information technology) are generally more
certain than those from exploration, the former often drives out the latter. Thus,
the very possession of valuable resources paradoxically leads resource-rich
organizations to focus on increasing attention on applying and improving them,
at the expense of exploring and developing the new resources which are often
required for strategic change (Argote & Ingram, 2000).

2.2.4.1 Training and Human Resource Capacity Building

Any framework for reshaping attitudes of public organization employees must
involve staff training and development. Amoako, (2003) observes that
traditionally, training programmes have had a skills-based focus, but recent
trends in customer-oriented Civil Service require an attitudinal-focused training.
This has led to the need for a pragmatic approach to training and development so
58

as to develop the capacity of public servants for improved service delivery. The
government has to invest in public servants in order to: equip managers with the
necessary skills to handle new responsibilities; develop skills for customer
oriented Civil Service; improve the standards of service delivery; adapt to new
technologies and new working techniques (Amoako, 2003). The public service
plays a central role in enabling the achievement of development goals.
Governments should therefore continuously seek new and better ways to build
service institutions that have the capacity to champion and advance the course of
development (Amoako, 2003).

2.2.4.2 Combination of knowledge, Skills and Information Communication

Technology (ICT) Competence
Accessing information communication technology-borne data requires a whole
range of overt resources. These resources include a telecommunications
infrastructure to provide network access, an electrical infrastructure to make the
information communication technologies work and skills infrastructure to keep
all the technology working. In addition, money to buy or access the information
communication technologies, usage skills to use the information communication
technologies, and literacy skills to read the content are also required. Most
African countries simply do not have these resources. In a world where 80 per
cent of the population has no access to reliable telecommunication, and one-third
does not have access to electricity it is not a surprise that the introduction of egovernment and its various applications have been slow in Africa (Panos, 1998).
The global evolution of the information age and the worldwide technological
59

innovations of recent years along with other structural and economic

developments have led to rapidly falling costs for information communication
technologies. These have combined with changes facing global and national
telecommunication regimes to present a clear window of opportunity for
appropriate leapfrog strategies to accelerate the development of the continent
(Panos, 1998).

According to Barua, et. al., (1995); Bharadwaj, (2000); Martinsons, (2000);

Genevive, et. al., (2001); Mahmood & Mann, (2000), the IT competence
captures other competences (skills and knowledge competences). IT capability
makes it easy to explore, exploit and manage the knowledge about the vision,
mission, and the objectives of public organizations. Further more, skills (the
know-how) can easily empower employees since IT makes it simpler for public
employees to interact with the environment and with different kinds of experts.
Tanriverdi, (2005) supports the argument by observing that knowledge
management is a critical capability through which IT competence as
organizational resource influences performance.

In the context of public

organizations, knowledge management capability creates and exploits cross-unit

knowledge transfer (synergies) from the services delivered by the public sector.
These synergies increase the leverage of the organizations (Eisenhardt & Santos,
2002).

60

Given that public organizations possess a variety of knowledge resources

(Schulze & Laidner, 2001), public managers must carefully choose which
resources they should focus on for exploiting. Tanriverdi, and Venkatraman,
(2005) contend that knowledge competence facilitates the exploitation of crossunit knowledge synergies. The exploitation of cross-departmental knowledge
synergies requires coordination across the public organizations departmental
units. Tanriverdi, (2005) suggests that in order to develop knowledge
management capability that creates, exploits, and renews cross-departmental
knowledge synergies on an ongoing basis, public organizations must institute a
set of organizational processes.

In their empirical study, Santhanam, & Hartono, (2003), found that an

organizations superior IT capability is associated with its significant higher
performance. For example, the study findings revealed that firms with IT
capability also had sound financial performance and that such firms were leading
other firms from 1991-1994. In addition leading firms with IT capabilities and
superior financial performance were controlling firms that lacked IT capabilities.
Santhanam, & Hartono, (2003), concluded that IT resource of the firm has an
effect on its performance in the long run since their results suggested that the
relationship between IT capability and financial performance was stronger in
later period periods than in the short run.

61

However, a lot of controversy has emerged over the relationship between IT and
organizational performance. While some scholars argue that there is a
relationship between IT and organization performance Bharadwaj, (2000); Kohil
& Devaraj, (2003), others argue that there is no relationship between IT and
organizational performance. Empirical findings by Barua et al. (1995)
established that IT and organizational performance are uncorrelated. This may
be due to the fact that some organizations fail to create a successful IT capability
(employee IT skills) despite their high investments in the IT infrastructure. Thus
for organizations to perform well, investment in IT infrastructure should be
matched with improved IT skills Kohil & Devaraj, (2003).

Almost all the cited literature recommends the need for public organizations to
have accessible up-to-date sound capabilities in the form of knowledge, skills
and information technology if their employees are to produce the required goods
and services for the

public. Scholars have argued that organization resources

are the basis for optimal employee performance. A few scholars who proposed
otherwise did so with reservation. For that matter, there was a need to establish
whether there is a relationship between organization resources and employee
performance in public organizations in Uganda.

2.2.5 Relationship between Performance Measurement and Employee

Performance
de Waal, (2007) and Kaplan (2001) assumes that a relationship exists between
performance measurement and employee performance.
62

Schmitz & Platts,

(2004) observe that every organization needs a clear and cohesive performance
measurement framework that is understood at all levels of the organization and
that, which supports organizational objectives and the collection of results. All
high-performing organizations whether public or private must be interested in
developing and deploying effective performance management systems since it is
only through such systems that organizations can remain high-performing. To
improve performance, managers need to know what their current performance is.
Measurement provides the basis for providing and generating feedback, and thus
a platform for identifying where things are not going well so that corrective
action can be taken.

In contrast, private sector businesses usually focus on the financial measures of

their bottom line: return-on-investment, market share, and earnings-per-share
(Christopher, et. al., 2003). Some researchers (Baker, et. al., 1994; Frederickson,
et. al., 1999; Christopher, et. al., 2003) have suggested that more weight should
be given to quantitative measures which are objective compared to qualitative
measures which are subjective. Neither of these approaches in isolation seems to
provide a comprehensive picture on which an organizations performance can be
fully measured but a balance among these performance measurement approaches
can enable managers to have a more complete performance picture and will
know where to make improvements. However, since public organizations are
non-profit making, measuring employee performance using financial measures

63

may be inappropriate, thus the review of financial measures literature is beyond

this study.

In order to have a balanced performance measurement approach that covers

organizational performance, Kaplan & Norton (1996) have developed a set of
measures that they refer to as a balanced scorecard. These measures give top
managers a comprehensive view of the employees performance and include
both process and results measures. In their study, Kaplan & Norton, (2001)
compared a balanced scorecard to the dials and indicators in an aeroplane
cockpit. They argued that for the complex task of flying an aeroplane, pilots
need detailed information about fuel, air speed, altitude, bearing, and other
indicators that summarize the current and predicted environment. Thus reliance
on one instrument can be fatal. Similarly, the complexity of managing a public
organization requires that managers are able to view performance in several
areas simultaneously. A balanced scorecard or a balanced set of measures
provides this valuable information in different facets of employee performance
in Public organizations (Frederickson, et al., 1999; Pfeiffer & Pratt, 1994;
Kaplan & Norton, 2001).

In measuring performance, there are both general and specific indicators of

employee performance which can be measured by public organizations. Among
the general indicators, quality lies at the heart of every organization. Quality
addresses how well the employee or work unit performed the work and/or the
64

accuracy or effectiveness of the final product/service Lambert & Salterio, 2000).

According to the OPM (2001), quality refers to accuracy, appearance,
usefulness, or effectiveness of a product/service. Quality measures can further
include error rates such as the number or percentage of errors allowable per unit
of work and customer satisfaction rates determined through customer surveys
(Lambert & Salterio, 2000). In the case of public organizations, quality of the
services delivered can be assessed through public satisfaction annual ratings
determined through public surveys and public opinion polls on the quality of
services provided by public organizations. However, Christopher, et. al., (2003)
argue that greater weight should be placed on performance measures that are
quantitative in nature because they are more reliable. Qualitative performance
assessments are often subjective, less accurate and unreliable than the objective,
quantitative assessments because they are influenced by the rater's biases
(Bommer, et. al., 1995). Placing a lot of weight on the nature of measurement
(either qualitative or quantitative) should depend on what is to be measured
(Lambert, 2001). A qualitative performance indicator like quality of the service
provided cannot be measured by quantitative means. Likewise, a quantitative
indicator like quantity of the service provided cannot be measured by qualitative
means. Thus the type of measurement applied in measuring employee
performance should hinge on the type of performance indicators to be measured
(Lambert & Salterio, 2000; Macleod, 2001).

65

Quantity as a general measure in public organizations addresses how much work

the employee or work unit has produced. Quantity measures are expressed as a
number of products produced or services provided.

In most cases, many

organizations focus on the quantity of a product or services and end up

compromising quality. In many instances, it is very hard to achieve quantity and
quality at the same time. In their empirical example to prove how so much
attention on quantity performance can be disastrous in compromising quality,
Macleod, (2001) found out that a certain Medical Laboratory came under fire
because of the errors it made in its certain cancer tests. A high number of cancer
tests that the Laboratory had approved as negative turned out to be wrong
because cancer had actually been evident. Their investigation established that
the Laboratory had been measuring and rewarding its employees on the number
of slides they reviewed daily, but not on the accuracy of the reviews.

Knowing that the more slides they reviewed, the more recognition they
received, employees were quickly moving from slide to slide to slide without
reading them accurately. As a result of the Laboratorys errors arising out of
wrong readings and recordings, cancer cases were going untreated. People who
could have been saved through early detection and treatment of the disease (had
quality been taken as a major priority) lost their lives. However, an optimal
operation could be established in which relative quantity can be achieved
without compromising quality. Timeliness as a general measure addresses how
quickly, when, or by what date the employee or work unit produces the work.
66

Public organizations need to ensure that timeliness measures are applied.

The

public sector should develop measures that address cost-effectiveness on specific

resource levels (money, personnel, and time) that they can generally document
and measure in the organizations annual fiscal year budgets. Cost-effectiveness
measures may include such aspects of performance as reducing unit costs,
wastage and the time it takes to provide a service.

In order to develop specific measures, public organizations need to first

determine the general indicators that are important for each employees work
(such as quantity, quality, timeliness and cost-effectiveness). Then, determine
how to measure the quantity, quality, timeliness, and/or cost-effectiveness for an
employees work (Luft & Shields, 2001). If public organizations can measure an
accomplishment with numbers, then they can record the form of measurement as
quantity. When public organizations only describe performance (that is, observe
and verify), then they should clarify how the performance will be measured
through various factors. Macleod, (2001) has developed different questions that
organizations should ask themselves during the performance measurement
development process. Such questions include the following:

Is quality

important? Does the stakeholder or the public care how well the work is done?
Is it important to accomplish the work by a certain time or date? Is it important
to accomplish the work within certain cost limits?

What yardsticks for

measurement are already available? These questions deal with establishing the
general indicators for employee performance.
67

For each general measure established, public organizations should ask: How
could (quality, quantity, timeliness, and/or cost-effectiveness) be measured? Is
there some number or percent that could be tracked? If the work cannot be
quantified numerically, and can only be described, then what means of
assessment can be applied? What factors would they look for? These questions
focus on the establishment of specific measurements and clarity of the general
performance indicators (Wang & Gianakis, 1999). According to Baiman et al.
(2001) public organizations should record the specific measures as reference to
both the employees and the managers. If the measurements are

numerical,

organizations should list the units to be tracked. If the measure is descriptive, it

should identify the factors to be observed and list them so that accurate
employee performance is measured (Willcocks, 1998; Christopher, et. al., 2003).

In order for the general and specific performance indicators to be effective in

public organizations, scholars (Kinlaw, 1992; Fiol, 1994; Dixon & Ross, 1999;
and Mausolff, 2004) have suggested that work standards for the employees
should be specified. According to Dixon & Ross (1999), performance standards
are managements approved expressions of the performance threshold(s),
requirement(s), and expectation(s) that employees must meet in order to be
excellent. Each critical employees work must have an equivalent standard
established. In order for employees and work units to fully understand the
expectations (standards) of performance on their work, Propper and Wilson,
(2003); Talbot, (2001) recommend that public organizations should articulate
68

what is considered as standard performance, its dimensions and how it can be

achieved to their employees.

When used constructively, performance measurement system can be a helpful

feedback tool that provides information to managers and employees about how
well they are doing in addressing public needs and where they might have room
for improvement (Lambert & Salterio, 2000). It also provides information on
which to base awards and recognition. When used poorly, however, public
employees may view performance measurement systems as punishing tools with
which to hit back at the workers if the results are poor. Managers and employees
must understand that the performance measurement system is beneficial to them
and the organization. Otherwise, the temptation to resist the performance
measurement system in public organizations may be high (Sanderson, Bovaird,
1998). In addition, involving employees in the development of the performance
indicators and standards included in the performance measurement system may
be an excellent way to clarify expectations and measurement terminology. This
active employee participation in creating valid measures that accurately reflect
performance decreases the possibility that employees may feel manipulated
through the measurement system (Smith, 2002; Lambert & Salterio, 2000;
Sanderson, Bovaird, 1998).

Empirical findings of study by Mausolff, (2004), conducted in four (4) services

agencies, established that performance measurement generates learning by
69

stimulating problem solving episodes.

Findings of the same study further

ascertained that in order to improve performance, employees must be given

feedback as to how well or poorly they are performing. It is only through
performance measurement that underlying problems or gaps can be identified
(Mausolff, 2004). Dixon, (1999) suggests that the identification phase is the first
step towards employees learning. The key to learning is the interpretation of the
performance data from the employees. Once the performance problem (gap) is
identified and the cause of the problem established, it becomes very easy to
construct a solution that involves action. Thus the motive to devise solutions in
order to meet the expected performance or sustain the current performance is
instigated by the findings of the performance measurement.

Fiol, (1994) suggests that after the integration of the divergent employee
interpretations of performance data, the search within the internal and external
environment of the organization should begin.

According to Popper and

Lipshitz, (2000), the organizational search phase can be classified into two
approaches: scanning and focused search. Scanning involves the relatively
wide-ranging sensing of the organization's external environment while focused
search is defined as active search in a narrow segment of the organization's
internal or external environment. The search behavior triggered by performance
data in public organizations is a type of focused search. It is a search triggered
by a particular problem, what Baiman, (2001) defines as "problem-based"
search.

After organization employees agree on a particular solution to

70

performance problems during the earlier identification and integrating phases,

they should initiate the searching phase (Baiman, 2001).

Greener, (2003) argues that an implementation of a solution and/or course of

action without a proper theoretical explanation on how the course of action is
likely to operate so as to close the organizations performance gap is disastrous.
This is because monitoring and evaluation of the course of action and/or solution
is normally quite difficult.

In addition, deLancer-Julnes & Holzer, (2001)

suggest that management must continually monitor and measure the performance
of employees after the implementation of a new course of action/solution to see
if there is a positive effect on employees performance. If performance remains
stagnant or declines, management must take appropriate action(s) in order to
rectify the situation (Dixon & Ross, 1999).

In conclusion, most of the cited literature argues that performance measurement

contributes to employee performance only if the outcome from the performance
measurement enables understanding and learning among the employees and the
management (Christopher, 2004). Performance data is the source of feedback
information for management and the employees.

If a performance gap is

identified, management should find solutions to bridge the performance that

inadequacy by identifying solutions to the problems. There was therefore a need
for a study to examine whether there is a relationship between performance
measurement and employee performance in public organizations using the
71

largest Local Government unit (Kampala City Council) and the largest Central
Government Ministry (Ministry of Education and Sports) so as to provide the
Ugandan experience.

2.3 Government Policy

A policy is a principle or rule meant to guide decisions in order to achieve
rational outcome(s) (Stone, 2008; Smith, 2002). The term policy may also refer
to the process of making important organizational decisions, including the
identification of different alternatives such as programs or spending priorities
and choosing among them on the basis of the impact they will have (Smith,
2002).

Governments globally, are the policy making bodies while public organizations
are either government policy implementing agencies or service delivery bodies.
For that matter, the autonomy or decision making power of public organizations
is related to issues of policy (Christensen, 2001). Autonomy as a decision
making power is also influenced to some extent by legal position, financial
dependence and governance structure (Christensen, 2001; Verhoest, et al. 2004).
The actions of public sector organizations are also often strongly regulated by
other governmental actors, such as central government departments, funding,
audit offices and public standards commissions (Christensen, 2001).

72

The study focus was to establish whether there is a relationship between

performance management practices and employee performance in public
organizations in Uganda. Since the research was conducted in public
organizations, it was also imperative to examine whether there is an interactive
effect among performance management practices, government policy and
employee performance in public organizations in Uganda.

2.4 Critical Review of Major Issues

This section presents a critical review of major issues. These are: decision rights,
incentives,

performance

contracts,

organization

resources,

performance

measurement and government policy respectively.

Employees cannot take responsibility for results over which they have not been
given an opportunity to influence de Waal, (2007). Similarly, when workers are
not empowered with the authority to make decisions and solve problems related
to their performance outcome(s), performance decreases because of absence of
job satisfaction and commitment to work (Locke & Schweiger, 1979; Murphy &
Oyer, 2001; Helmut, 2002; Barron & Glen, 2003; Garvey & Milbourn, 2003);
Ivancevich 2004; Armstrong, 2004; Juliette and Jeff 2005; and the Economics
letter, 2007).

All the quoted scholars argue that it is important to involve

employees in decisions that affect their work. Locke and Schweiger (1979)
contend that employees are likely to commit their energy to the organizations
future direction, (goals and objectives) when management involves them in
73

making decisions that affect them and their jobs directly.

However,

accomplishing organizational goals and/or objectives as employees are

empowered with decision rights is not sustainable when performance is not
matched with rewards (Baimans (1990).

Namutebi, (2000); and Weriche, (2002), confirmed that incentives in the form of
salaries and allowances are the major factors affecting the quality and quantity of
employee output in public organizations in Uganda. This is in perfect agreement
with Baimans (1990) Agency theory which emphasizes that individuals are
presumed to be motivated by incentives described in a utility function that
contain two arguments: wealth (monetary and non-monetary incentives) and
leisure. The theory is backed by observations and empirical evidence by Rajesh
and Samwick (2003); Garvey and Milbourn (2003); Burgess and Ratto (2003)
and Barker (2004) who confirmed the necessity for adequate rewards in order to
enhance employee performance. However Verbeeten (2007) partially agrees
with Barker (2004); Rajesh and Samwick (2003); Garvey and Milbourn (2003);
Burgess and Ratto (2003); Weriche, 2002); Namutebi (2000); and Baimans
(1990) when he confirmed that incentives are only positively associated with
quantity performance but not with quality performance.

Regardless of the advanced arguments advanced by the scholars in the study on

incentives and employee performance, it is only fair that high performance is
matched with appropriate incentives especially when workers are aware of how
74

much to expect and for what quantity of output. In that case, performance
contracts would be a preference.

Kobia, and Mohammeds (2006) established that performance contracts promote

job satisfaction among employees and hopefully this satisfaction leads to
improved job performance in public organizations. This is in agreement with the
agency theory propounded by Bainman, (1990), which emphasizes that
performance contracts with appropriate incentives significantly enhance
employee performance in public organizations. Bainman, (1990), continues to
argue that in order to delegate responsibilities, there is need for performance
agreements with commensurate rewards.

However, Kobia, and Mohammeds (2006) and Bainmans (1990) observations

are sharply contested by Marobela, (2008). Marobela, (2008) argues that public
sector reforms have not realized the intended objectives as revealed by the poor
employee performance in the Public Service in Botswana. Marobela (2008)
continues to note that contracts which are aligned to high targets and
performance related pay system have caused job loss and poverty (Marobela,
2008).

Workers have to be empowered with knowledge, skills and up-to-date accessible

information technonology so as to perform as expected (Schmitz and Platts
2004; Christopher, 2004). Confirming this finding, the Resource Based View
75

(RBV) had earlier assumed that a relationship exists between organization

resources in the form of knowledge, skills and information technology and
employee performance (Barney, 1991).

This view was then supported by

Amoakos (2003) findings when he established in his empirical study that there
is need for the training of public officials if performance is to be realized in the
public service. Panos, (1998) also observed that public servants ought to be
enabled to have access to the required knowledge and skills in information
technology if they are to produce quality services in the right quantity.

Last but not least, de Waal, (2007); Kaplan and Norton (1996); Schmitz and
Platts (2004); Christopher, (2004); Mausolff, (2004) and Smith, (2000) urge that
there is need to have a clear and cohesive performance measurement framework
that is understood at all levels of the organization. They continue to emphasize
that the performance measurement framework should be supportive of the
organizations objectives and the collection of results.

Lastly, Stone, (2008); Smith, (2002); Smith, (2002) contend that rational output
is guided by sound policies and that every organization makes its own rules and
policies. Since public organizations are owned by governments, all undertakings
conducted therein are governed by government policy (Christensen, 2001;
Verhoest, et al. 2004). For that matter since the study was conducted in a Local
Government Unit and a Central Government Ministry, was imperative to include
government policy as an intervening variable of this study.
76

2.5 Summary and Gaps Filled by the Study

Past studies looked at incentives, performance contracts and performance
measurement Namutebi 2000; Weriche, 2002; Proper and Wilson, 2003;
Greener, 2003; Mausolff, 2004, Kobia and Mohammed, 2006; Verbeeten, 2007;
de Waal 2007). The cited studies however left out decision rights as one of the
important determinants of employee performance in the public sector. Also all
the cited studies, apart from that of Verbeeten (2007) failed to include
government policy as an intervening factor that regulates implementation of
performance management practices in the public sector. This study therefore
combined decision rights, incentives, performance contracts, organization
resources, performance measurement and government policy in order to
establish their interactive effect on employee performance in public
organizations in Uganda, which is a developing country.

Further more, the performance management theories advanced decision rights;

performance contracts and incentives; organization resources and performance
measurement (Locke and Latham, (2002); Bainman, (1990); Barney, (1991);
Kaplan (2001) and de Waal (2007) respectively, as critical factors that determine
employee performance. However, none of the theories looked at all the factors
at once.

There is no known study that has come up to establish whether there is a

relationship between performance management practices (decision rights,
77

incentives,

performance

contracts,

organization

resources,

performance

measurement) with employee performance in the public sector at once. There

was need therefore to conduct a study that combined the selected performance
management practices at once in order to establish whether there is a relationship
between these performance management practices (decision rights, incentives,
performance contracts, organization resources, performance measurement) and
employee performance in the public sector.

Secondly, none of the cited studies attempted to ascertain whether there is an

interactive effect among performance management practices (decision rights,
incentives,

performance

contracts,

organization

resources,

performance

measurement), government policy and employee performance. It was also

necessary to establish whether there is an interactive effect among the selected
performance management practices,

government policy and employee

performance in public organizations.

Lastly, the cited theories were tested in developed countries that are endowed
with a lot of resources, facilities and efficient work environment.

It was

therefore imperative to explore how these factors operate in developing

countries, with troubled work environments especially that of Uganda.

78

2.6 Conceptual Framework

INDEPENDENT
VARIABLES (IV)

Performance
management practices

DEPENDENT
VARIABLE (DV)

Government
policy (IV)

Employee
performance

Decision rights
Incentives

Performance contracts
Organization
Resources
Performance
measurement

Figure 2.1: Performance management practices and employee performance

Source: adapted from (a) Locke & Latham, (2002), goal setting theory; (b)
Bainman,
(1990), agent theory; (c) (Barney, 1991), Resource Based View
(RBV); (d) de Waal, (2007) performance measurement.

Locke & Latham, (2002) emphasize setting of realistic goals with ample
decision rights as a basis for employee performance.

On the other hand

Bainman, (1990) in his agent theory asserts that performance contracts coupled
with realistic incentives enhance employee performance. Barney, (1991) on the
contrary in his Resource Based View (RBV), asserts that tangible resources or
capabilities in the form of knowledge, skills, information and technology give
firms a competitive advantage over others. de wall, (2007; 2004) observes that it
79

is important to put in place performance measurements so as to show

performance indicators and critical success factors. For purposes of this study,
the independent variables were: decision rights, incentives, performance
contracts, organization resources and performance measurement while the
dependent variable was employee performance. Government policy was the
intervening variable.

In conclusion, this was a descriptive correlational survey that sought to establish

the relationship between performance management practices (decision rights,
incentives,

performance

contracts,

organization

resources,

performance

measurement) and employee performance in public organizations in Uganda.

Both quantitative and qualitative data were collected with the aid of a
questionnaire (see appendix III) and three (3) interview guides (see appendices
IV, V and VI) from a sample of 517 respondents. Data was analyzed using
descriptive and inferential methods.

The procedure of this undertaking is

explained in the chapter that follows.

2.7 Chapter Summary

The chapter addressed literature related to performance management practices
(decision rights, incentives, performance contracts, organization resources and
performance measurement) guided by four performance management practices
and employee performance. The next chapter mainly deals with the methods
used in data collection and analysis.
80

CHAPTER THREE
RESEARCH METHODOLOGY

This chapter presents the research design, the study population, sample size
determination, sampling design used, data collection procedure and instruments
used in data collection and their pre-testing (in order to establish their validity
and reliability), data management, analysis and the adopted Log Linear model.

3.1 Research Design

The study was descriptive and correlational survey (Amin, 2005) that sought to
establish the relationship between performance management practices and
employee performance in public organizations in Uganda. To achieve the study
objectives, an analytical cross sectional survey design was used to capture the
categorical description of attitudes of the study population (Sekaran, 2003). A
mixture of methodology was employed using quantitative and qualitative design
which is grounded in the Social Sciences literature (Sekaran, 2003; Ahuja,
2005). Data was collected using a combination of methods in order to facilitate
triangulation of the findings for creating richer and deeper appreciation of the
study phenomenon as well as giving validity to the research findings.

The researcher rejected the experimental research design because of its

inconsistence with the requirements of the research like: it is aimed at
establishing the causality of the outcome; it requires two groups (a treatment
81

group and a control group); it requires manipulation of behavior or conditions in

the treatment group while keeping the behavior or conditions in the control
group unchanged and it requires random assignment of the subjects in the two
groups.

Thus basing on the comparison between experimental design and

descriptive survey design in relation to the study problem, the researcher adopted
descriptive survey design.

3.2 Target Population

The study population was constituted by two group-samples from two public
organizations namely: Kampala City Council with a population of 2572
employees (Kampala City Council Database, 2008), and the Ministry of
Education and Sports with a total workforce of 300 employees (Ministry of
Education and Sports Database, 2008) - making a total population of 2872
employees. In the case of Kampala City Council, employees were categorized
as under: Managers 38, Supervisors 222, and operatives 2312. Employees of the
Ministry of Education and Sports on the other hand were grouped as under:
Managers 21, Supervisors 49, and operatives 230.

Kampala City Council and the Ministry of Education and Sports population were
selected to participate in the study because each organization was representing a
different type of public sector. Public organizations are divided into two groups,
namely, the Local Government and the Central Government. Kampala City
Council is the largest Local Government unit handling a very large area (5
82

Divisions) with the largest staff workforce (2572) by comparison with other
Local Government units in the country. The Ministry of Education and Sports on
the other hand is the largest government Ministry with a workforce of 300
employees. By comparison with other Government Ministries, it has the largest
amount of responsibility (in charge of implementing education related policy
issues, all Institutions of Higher Education 5 large Universities that include
Makerere, Kyambogo, Mbarara, Gulu and Busitema; 4 parastatal Departments
National Council for Higher Education, National Examinations Board,
Directorate of Inspectorate

and Directorate of Vocational Training).

The

Ministry of Education and Sports is also responsible for all institutions for
further learning in addition of being in charge of both Primary and Secondary
Schools in the country.

3.3 Sample size determination

In order to determine a representative sample from the general population,
Yamanes (1967: 886) sampling formula was used. In this formula, a sample n
is selected from a population N, taking a sampling error to be 5%. This means
that in case a sample was selected 100 times, it is only 5 times that the sample
selected would be different from the population and 95 times, the sample would
be similar to the population. Since the study constituted two institutions which
are different, independent sample sizes were calculated and then added to get the
total sample size using the formula:
n= N
1 + N (e)2
83

Where: n = sample size

N = population size
e = error term or other parameters not used (minimum margin error).
The sample size for Kampala City Council was n1 = 346 (see Appendix I)
The sample size for the Ministry of Education and Sports was n2= 171 (see
Appendix II)

Therefore the researcher used a total sample of 517 respondents (see Appendices
I and II)

3.4 Sampling Design

The study used purposive and stratified random sampling techniques. In the
purposive sampling the researcher selected the respondents basing on their
knowledge, commendable experience and vital information presumed important
to the study (Trochin 2006).

In stratified random sampling, the researcher

grouped the population of Kampala City Council and that of the Ministry of
Education and Sports into strata and then calculated the sample respondents from
these strata using Pedhazur and Schmelkins (1991), formulae cited by KakindaMbaaga (2000: p12-14) as described below.
r=cxs
p
Where r = respondents desired from a stratum
c = category (stratum) population
s = desired sample
p = total population
84

The population ratio formula; stratum population (c) * 100% = c%

Total population (P)
Stratum sample size (s) = c%*sample size
Thus this population ratio formula was not used in calculating the number of
respondents per stratum (stratum sample sizes) because it requires to first work
out the stratum population as a ratio/ percentage of the total population. This is
followed by converting the stratum population ratio/ percentage in terms of the
sample size of the strata. This is done by multiplying the ratio by the strata
sample size.

This method is quite tedious and therefore Pedhazur, and

Schmelkins (1991) formula cited by Kakinda-Mbaaga (2000: p12-14) is much

simpler and direct in calculating the stratum sample sizes.

Table 3.1: Employee Strata

Kampala City Council
Category of
Respondents
Middle Managers

Ministry of Education
and Sports
Stratum
Stratum
Stratum
Stratum
Population sample size Population
sample
(c)
(r)
(c)
size (r)
21
12
38
5

Supervisors

222

30

49

28

Operatives

2312

311

230

131

TOTAL

2572

300

171

346

Stratified random sampling was used because the sampling frame was not
homogeneous and the sample contained sub-groups (managers, supervisors, and
operatives) thus warranting a fair representation of these sub-groups in the
sample size (Ahuja, 2005).
85

Sampling procedures like simple random sampling, accidental sampling, and

quota sampling were not used because: simple random sampling requires a
homogeneous sample yet the sample was categorical (not homogeneous).
Accidental sampling is just based on availability and willingness to talk yet the
researcher wanted respondents with specific information and knowledge. Quota
sampling may lead to inability of generalizing the finds to the whole population,
yet the research is aimed at generalization of the research findings.

3.4.1 Interview Sample

A sample of 32 respondents were purposively sampled and interviewed to
triangulate the data. These included 4 Top Managers at the ranks of Information
Communication Technology Manager, Chief Education Officer, Human
Resource Manager and a Chief Accountant from Kampala City Council and
from the Ministry of Education and Sports. 4 Supervisors from Kampala City
Council and from the Ministry of Education and Sports were also interviewed.
Lastly, 24 Operatives from Kampala City Council and the Ministry of Education
and Sports were also purposively selected and participated in the interviews.
Purposive sampling was used to include top managers, supervisors and
operatives because the researcher was interested in obtaining data from specific
individuals who had the knowledge and information on the performance
management practices thus giving the study its internal validity (Ahuja 2005).

86

3.5 Sources of Data

Primary data was collected from managers, supervisors, and operatives of both
Kampala City Council and the Ministry of Education and Sports. Table 3.3
gives a summary of study variables and their operationalisation.
Table 3.2: Summary of the dependent and intervening study variables and
their Operationalisation

Dependent Variable

Type of data

Operationalisation

Performance

Ordinal and

Quantity of work
Quality of work
Efficiency
Effectiveness
Innovation
Work excellence
Customer satisfaction
Personnel policy
Reward policy
Training and Development
policy

Qualitative data

Government policy

Ordinal and
qualitative data

3.6 Data Collection Procedure and Instruments

3.6.1 Procedure
The process of collecting data from the field involved two activities mainly
collection of data and presenting data. Data was collected by the researcher using
questionnaires and interviews. Questionnaires were preferred by the researcher
because they are inexpensive to administer, they allow respondents to fill them
at their own convenience, and solicit information from several respondents
within a very short time (Gupta, Proctor, 2007). Personal interviews
complemented questionnaires because they are a more personal form of research,
interviewers work directly with the respondents, they offer an interviewer the
87

opportunity to probe or ask follow-up questions, and they are generally easier for
respondents especially in seeking respondents opinions, (Amin, 2005)

Data collection procedures like a census, observation, and administrative byproduct were not used by the researcher because: a census requires data
collection from every one in the population of study, yet the research required
just a sample from the population of study. Observation requires seeing
(observing) subjects behavior and condition(s) directly and this can not be used
because peoples opinions are directly unobservable yet the research required
collection of respondents opinions. An administrative by-product lacks
flexibility yet collecting respondents opinions requires flexibility in presenting
different alternatives to the respondents. Thus the researcher used questionnaires
and interviews in collecting respondents opinions.

Logistical and ethical considerations were upheld during the data collection
exercise.

For example respondents completed the filling-in process of the

questionnaires truthfully leaving out their names. The information gathered was
handled with confidentiality and was used for study purposes only. Findings are
to be published for public consumption and for use by all interested scholars.

3.6.2 Instruments
The questionnaires were distributed to employees in Kampala City Councils
five Divisions of Nakawa, Makindye, Rubaga, Kawempe and Kampala Central
88

and their counterparts at the Ministry of Education and Sports. Data was
collected from Top Managers, Middle Managers, Supervisors and Operatives of
Kampala City Council and the Ministry of Education and Sports using
questionnaires (see appendix III) and interview guides (see Appendices IV-VI)
by the Principal Researcher and trained Research Assistants. The following is a
discussion of research instruments used in data collection:

3.6.3 Questionnaire
A 5-point Likert scale questionnaire was the main instrument of data collection
for the study. The questionnaire used had 8 sections.

Section A solicited

information on place of work, job category, demographic data on gender, age

bracket, education and number of years of service in the organization. The
information was intended to collect data describing the sample characteristics in
order to include them in the analysis because these characteristics have an effect
on respondents perception.

Section B sought to information on decision rights because it is important to

involve employees in decisions that affect their work if good performance is to
be realized (Armstrong 2006 & de Waal 2007). Responses were rated on a 5point Likert scale for which 1 (one) was strongly disagree to 5 (five) was
strongly agree.

In this section, respondents were given 6 areas on:

communication of decisions to concerned employees; consultation of employees;

89

involvement of employees in decision making; employee attitude towards

decision making; centralization of decision making and employee participation
in various committees so as to indicate whether they agreed with the statements
regarding decision rights in their organization.

Section C solicited information on incentives.

This was necessary because

incentives play a very important role in motivating employees to perform

(Bonner & Sprinkle 2002; Ivancevich, 2004). Respondents rated the level of
satisfaction with performance compensation metrics to their total reward by
rating from 1 (very dissatisfied) to 5 (very satisfied) with the rewards. In this
section, respondents were given 8 areas: employee satisfaction with monetary
compensation;

proportionality

of

total

compensation

with

employee

performance; satisfaction with housing facilities; satisfaction with the medical

facilities; satisfaction with the allowances; satisfaction with the transport
allowances; satisfaction with the saving scheme and satisfaction with the total
compensation package in order to indicate the degree of satisfaction with the
incentives the organization extended to them.

Section D sought information on performance contracts. It was necessary to

collect information on performance contracts because recent researches have
established that performance contracts help to induce employee commitment and
high performance (Kobia, Muhamed 2006).
90

Respondents rated the extent to

which their performance contracts were clearly spelt out by rating on a 5 point
Likert scale for which 1 was strongly disagree to 5 was strongly agree. In this
section, respondents were given 7 areas on: clear specification of job
requirements, internal and external communication of employee contracts;
clarity of individual roles in relation to organizations mission; clear and detailed
documentation of individual roles; clear outcome of job requirements; role of
performance contracts; employee attitude towards performance contracts.

Section E solicited information on organization resources.

Organization

resources in the form of knowledge, skills and information technology are very
important in enhancing employee performance (Barney 1991; Priem & Butler
2001). Respondents rated the adequacy of organization resources on a 5 point
Likert scale for which 1 was very inadequate to 5 was very adequate. In this
section, respondents were given 7 areas on: employees adequacy of knowledge
for job performance; employees adequacy of skills; acquisition of knowledge
and skills; sufficiency of information technology in the organization;
performance in relation to available information; accessibility of information by
authentic users and facilitation of employees with relevant information.

Section F sought information on performance measurement. It was necessary to

collect data on performance measurement because it is through clear
performance measurement systems that organizations remain high-performing
91

(Schmitz & Platts., 2004; Armstrong 2001; Smith 2001). Respondents rated on
a 5 point Likert scale for which 1 was strongly disagree to 5 was strongly agree.
In this section, respondents were given 8 areas on: quantity of services provided;
operating efficiency; customer satisfaction; service quality; outcome effects;
satisfaction with performance measures;

availability of performance

measurement training and assignment of personnel and financial resources for

performance measurement.

Section G solicited information on the extent to which government policy

influences performance in public organizations. It was necessary to collect data
on government policy in order to establish the extent to which government
influences employee performance in Public Organizations in Uganda because
actions taken in Public Organizations are influenced by Government policy.
Respondents rated whether they agreed with the statements concerning
government policy on a 5 point Likert scale for which 1 was strongly disagree to
5 was strongly agree. In this section respondents were given 10 areas on:
recruitment policy; direct reward policy; indirect reward policy; training policy;
employee development policy; promotion policy; transfer policy; safety policy;
procurement policy; administrative policies and guidelines.
Section H sought information on performance.

It was necessary to collect

information on performance in order to establish the effectiveness of Public

Organization employees. Respondents rated on a 5 point Likert scale for which
92

1 was strongly disagree to 5 was strongly agree with their current work
performance. In this section respondents were given 21 areas concerning
performance and these included: quantity of work; effectiveness; meeting
targets; work quality; work quality and effectiveness; meeting customer needs;
meeting organization goals; work accuracy as specified by supervisor; work
accuracy based on organization specifications; accuracy based on customer
specifications; innovation; section innovativeness; satisfactory innovations; staff
work excellency; organization work excellency; customer satisfaction with work
excellency; work efficiency in unit operations; customer satisfaction with work
efficiency; morale boosting; administration ranking of employee morale and
employee morale in order to indicate their level of agreement.

3.6.4 Interview guides

Structured interview guides were designed in such a way that more specific and
in-depth responses related to employee performance at Kampala City Council
and at the Ministry of Education and Sports were obtained from respondents (see
Appendices IV - VI). The interview guides had sections similar to those in the
questionnaire. The interview schedules were intended to help the researcher to
cross check information already given and thus help to give validity to the data
collected. With the aid of the interview schedules, various forms of interviews
were conducted to enrich evidence obtained from other sources too. This method
of data collection was used as well because according to Amin, (2005)
interviews give an opportunity to probe and obtain detailed information on an
93

issue. Structured and open-ended interviews Amin, (2005) were carried out.
Key respondents were asked to either propose solutions or provide insight into
events.

3.7 Pre-testing the Instruments

A pilot study was conducted to pre-test the research instruments. According to
Amin (2005), a pilot study is done in order to test the psychometric properties of
the instruments, identify any ambiguities, misunderstandings or inadequacies so
that they can be improved.

3.7.1 Validity of the Questionnaire

Validity refers to the extent to which an instrument measures what it claims to
measure Arya, et al (2002) or the concern to whether the variable is the
underlying cause of item covariation (Devillis, 2003). Respondents are less
likely to complete and return questionnaires perceived to be inappropriate.
Therefore the instrument should have face validity wording, clarity, ease of
filling out and total time to complete the content validity - extent to which
specific set items reflect content domain (Devillis, 2003).

Prior to the initiation of the study, a panel of four experts was invited to screen
and vet the instrument for its content validity. The experts were selected, basing
on their academic and practical managerial expertise in performance
94

management. The experts included two Doctors of Management studies, one

Senior Lecturer of Public Administration and Management and a Human
Resource Management Consultant. All items were found relevant apart from 3
which were deleted (Amin 2005). The average Content Validity Index (CVI)
formula was used to capture adequate and representative sets of items which
were used to tap the content.
Content Validity Index (CVI) = Number of items declared valid
Total number of items
In the content validity test, the validity of each item was evaluated on a scale for
which 1 = relevant, 2 = quite relevant 3 = somehow relevant and 4 = not
relevant.

Four experts evaluated the questionnaire and the findings are shown in table 3.4:
Table 3.3: Showing Content Validity Index (CVI)
Expert

Content Validity Index

Expert 1

0.849

Expert 2

0.982

Expert 3

0.830

Expert 4

0.936

Average

0.899

As indicated in table 3.4, all CVI were above 0.80 indicating that the questions
were relevant to the study variables. On average, the content validity index was
95

0.899 which is in agreement with Sekaran, (2003) and Mugenda, (2003) who
recommended that for an instrument to be valid, its content validity index has to
be 0.8 and above. However, some items addressing decision rights, government
influence and performance had to be improved.

3.7.2 Reliability of the Questionnaire

The instruments were administered to 16 participants selected randomly from
Kampala City Council and the Ministry of Education and Sports. 8 respondents
were from Kampala City Council composed of 2 Managers, 2 Supervisors and 4
Operatives and the other 8 were from the Ministry of Education and Sports also
composed of 2 Managers, 2 Supervisors and 4 Operatives. Participants were
asked to answer the questions as if they were answering them in the main study.
The reliability of the instrument was calculated using a Cronbach Alpha test of
reliability. This test determines the consistency of the items used to measure
variables in the questionnaire.
The data was entered in the computer and analyzed using the Statistical Package
for Social Scientist (SPSS). The variables with an Alpha Correlation Coefficient
of least 0.7 were taken to be reliable (Ahuja, 2005). Table 3.5 indicates that all
the alpha coefficients were above 0.7.

96

Table 3.4: Reliability Test Findings

Variable

Alpha coefficient

Performance management practices

0.8964

Decision Rights

0.7183

Incentives

0.9343

Performance Contracts

0.8102

Organizational resources

0.7624

Performance measurement

0.8996

Government Influence/policies

0.7192

Performance

0.7262

Findings revealed that the alpha coefficient for performance management

practices was 0.8964. That of decision rights was 0.7183. Some constructs
addressing decision rights had negative statements and so they were improved.
Incentives section was the best with an alpha coefficient of 0.9343. The alpha
coefficient for organizational resources was 0.7624. Performance measurement
was the second best parameter with an alpha coefficient of 0.8996. The alpha
coefficient for government influence was 0.7192 and the constructs had to be
improved too to address specific government policies. The alpha coefficient for
performance was 0.7262 and the constructs had to be improved by posing at
least 3 questions to each performance indicator. All Cronbach alpha coefficients
were above 0.80 which indicated that the questionnaire was reliable enough to be
used as a research instrument (Sekaran, 2003).

97

3.8 Data Management

After data coding, entry into the computer, sorting and editing to minimize
errors, it was realized that some questionnaires had missing values and thereby
creating missing data. Missing data in some questions from some respondents
was replaced with the mean scores (average scores) of each question item where
data was missing. Therefore missing data was managed using a series mean
method. The 5-point Likert scale used was condensed into 3-levels. This was
done by condensing two adjacent categories into one (for example strongly
disagree and disagree into disagree and strongly agree and agree into agree for
ease of analysis (Trochim, 2006; Earl, 2005). After cleaning, coding, editing and
sorting, data was input into the statistical package of Social Sciences (SPSS).

3.9 Data Analysis

Quantitative data collected through questionnaires was analyzed using
descriptive statistics and inferential statistics. Descriptive statistics including the
mean, frequencies and percentages were used to establish spread and variation of
scores between Kampala City Council and the Ministry of Education and Sports.
Inferential statistics: factorial analysis (Principal Component Analysis) was used
to establish the number of principal components which accounted for most of the
variance within the performance management practices, government policy and
employee performance.

Mann-Whitney test was used to assess the mean

difference between Kampala City Council and the Ministry of Education and
Sports in terms of performance management practices, government policy and
98

employee performance.

Pearson chi-square test was used to establish the

relationship between performance management practices and employee

performance. Somersd test was used to establish the direction of the chi-square
and Log-Linear analysis was used to establish the interaction effect
(relationship) among performance management practices, government policy
and employee performance.

The Principal component analysis with Varimax rotation method was preferred
to factor analysis because it is a variable reduction technique which is used when
variables are assumed to be highly correlated (Field, 2007). The method reduces
the number of observed items to a smaller number of principal components
which account for most of the variance within the observed variables (Bryant &
Yarnold, 1994). Thus the principal components identified, account for most of
the variance within the variable and they are (the identified principal
components) uncorrelated. Factor analysis on the other hand, is a variable
reduction technique which is concerned with the identification of latent
constructs and the underlying factor structure of a set of variables.

Factor

analysis hypothesizes an underlying construct (a variable not measured directly),

estimates factors which influence responses on observed variables and error due
to unreliability in measurement (Ledesma & Valero-Mora, 2007).

Thus since the researcher was interested in finding out the major components
which could explain much of the variance within the performance management
99

practices, government policy and employee performance, principal component

analysis was used.

Further more, performance management practices,

government policy and employee performance were directly measurable. Thus

factor analysis was not necessary since it is mainly used to identify and estimate
variables that are not directly measurable (underlying constructs) but have
influence on the measured variables (Bryant & Yarnold, 1994).

Kaiser Criteria was used in the selection of the principal components based on
their variance contributions (Eigen values>=1) to performance management
practices, government policy and employee performance. The variables (items)
corresponding to principal components were selected basing on their relationship
with their principle components (factor loadings greater than 0.3).

Mann-Whitney test, chi-square test, and Log-linear analysis were preferred by

the researcher because of the nature of data (categorical) which was not
conforming to the parametric test assumptions of normality of data
(homogeneity of data, absence of multi-colinearity in the variables, absence of
heteroscedastisity, and randomness of the error term) (Field, 2005). Above all,
parametric tests require data to be scalar yet this particular data was categorical.
Thus the usual tests of independent sample t-test, Pearson-correlation and linearregression analysis were rejected due to their parametric nature.

100

3.9.1 Research Model

The researcher estimated the interaction effect among performance management
practices, government policy and employee performance using a model adopted
from the Cobb-douglas Production Function Model which relates input to output
(Cobb-douglas, 1928, cited in Barnet, 2007). The model was adjusted by the
researcher in order to cater for the interaction effect among variables.
Y= Pb + e.
But P = PMP (Performance Management Practices)*GP (Government Policy)
The equation is linearized using the natural Log (In).
In(Y) = b In (PMP*GP) +In(e)
Where: Y = Employee performance
PMP = decision rights, incentives, performance contracts, organization
resources and performance measurement
GP = Government policy
PMP*GP = interaction between performance management practices
and Government policy
b = The parameter estimate of the most critical interaction effect among
performance management practices and government policy

NB: In calculating the correlation coefficient/effect size (r) of the model, the
parameter estimate (b) of the interaction is converted into its Z-score. The Zscore is then used in calculating the correlation coefficient/the effect size (r) of
the model using the formula below:
101

r=

Z
n

Where: r = correlation coefficient (magnitude of the relationship)

Z = Z-score (standardized score of the parameter estimates (b)
n = sample size of the population

In order to estimate the most critical interaction between performance

management practices and government policy which could stimulate an increase
in employee performance, Log-linear analysis was used.

Qualitative data obtained from the questionnaires and from interviews with Top
Managers, Supervisors and Operatives at Kampala City Council and the
Ministry of Education and Sports was categorized using the Pragmatic Content
Analysis (PCA) and analyzed in percentages with the help of a calculator.
According to Kombo & Tromp, (2006) when using Pragmatic Content Analysis,
concepts are classified according to their probable causes and effects.

The

technique therefore examines the intensity with which certain words are used.
Why something is said could be used to understand peoples perceptions and
beliefs Kombo & Tromp, (2006).

In order to use this method therefore, responses from the interviews with
participants were classified and recorded in pragmatic content matrix table (see
appendix VII) according to frequency an idea or a concept appeared.
102

Participants responses were then coded into frequency tables according to the
variables (decision rights, incentives, performance contracts, organization
resources and performance measurement) (see tables 4.13 4.17: Appendix
VIII). The frequency of concepts emphasized the measure of direction or bias in
data interpretation.

3.10 Chapter Summary

In conclusion, this was a descriptive survey (Amin, 2005) that sought to
establish the relationship between performance management practices and
employee performance in public organizations in Uganda. The study used an
analytical cross sectional survey design for collecting both quantitative and
qualitative data using a 5-point Likert-scale questionnaire and 3 interview
guides. Purposive and stratified random sampling techniques were used in data.
Yamanes, (1967: pp. 886) sampling formula was used to determine a
representative sample of 517 respondents from the general population.
Pedhazurs, (1991) formula was used to get the strata sample sizes. Missing data
was managed using a series mean score method. The Mann-Whitney test was
used to assess the mean difference between Kampala City Council and the
Ministry of Education and Sports in terms of performance management practices
and employee performance.

Pearson chi-square test was used to test the

relationship between performance management practices and employee

performance, Somerd test was used to establish the direction of the chi-square.
Log-linear analysis was used to establish the interaction effect (relationship)
103

among performance management practices, government policy and employee

performance. The interaction effect among performance management practices,
Government policy and employee performance was estimated using

a model

adopted from the Cobb-douglas Production Function Model which relates input
to output (Cobb-douglas, 1928, cited in Barnet, 2007).

104

CHAPTER FOUR
PRESENTATION AND DISCUSSION OF THE FINDINGS

This chapter presents the key findings of the study that sought to establish the
relationship between performance management practices and employee
performance in public organizations in Uganda. The findings with regard to the
study sample characteristics are presented first. The second aspect presents
descriptive statistics for a comparison of performance management practices and
employee performance across organizations.
analysis then follow.

Factorial analysis and inferential

Performance management practices (decision rights,

incentives, performance contracts, organization resources and performance

measurement) are used as factors for measuring employee performance.

4.1 Sample characteristics

Population characteristics like age bracket, education level, respondents gender,
number of years worked in the similar organization, were likely to have a
bearing on the quality and validity of the responses. Thus in order to assess the
respondents competency, the sample characteristics of 171 respondents from the
Ministry of Education and Sports and that of 346 participants from Kampala
City Council were analyzed. The results are presented in table 4.1:

105

Table 4.1 Showing Sample Characteristics of Respondents across

Kampala City Council and the Ministry of Education and Sports
Sample
Characteristics
Respondents Place
of Work
Total
Gender:
Male
Female
Total
Job category:
Managers
Supervisors
Operatives
Total
Age bracket:
25 years and
below
26 - 30 years
31 - 35 years
36 - 40 years
41 - 45 years
46 years and
above
Total
Level of Education:
Certificate
Diploma
Bachelors Degree
Masters Degree
PhD
Total
Number of years of
service:
Less than 2 years
3 - 5 years
6 - 10 years
11 - 15 years
16 - 20 years
Over 20 years
Totals

Kampala City Council

Ministry of Education
and Sports
Frequency Percentage Frequency Percentage
346

66.9%

171

100%

33.1
100%

202
144
346

58.4%
41.6%
100%

102
69
171

59.6%
40.4%
100%

5
30
311
346

1.4%
8.7%
89.9%
100%

12
28
131
171

7.0%
16.4%
76.6%
100%

9
75
99
87
45
31

2.6%
21.6%
28.6%
25.1%
13%
9%

5
19
27
38
33
49

2.9%
11.1%
15.8%
22.2%
19.3#
28.7%

346

100%

171

100%

65
91
178
10
2
346

18.8%
26.3%
51.4%
2.9%
0.6%
100%

21
30
51
65
4
100%

12.3%
17.5%
29%
38%
2.4%
100%

17
79
133
70
33
14
346

5.0%
22.8%
38.5%
20.2%
9.5%
4.0%
100%

17
37
48
27
21
21
171

10.0%
21.6%
28.1%
15.7%
12.3%
12.3%
100%

106

Participants in the study were drawn from a total population of 2,572 employees
from Kampala City Council and 300 workers from the Ministry of Education
and Sports. Table 4.1 reveals that a sample of 517 participants was selected to
represent employees of the two public organizations in Uganda. Majority of the
respondents (66.9%) were from Kampala City Council while the rest (33.1%)
were from the Ministry of Education and Sports. Respondents from the Ministry
of Education and Sports were fewer because it was a smaller organization and
with fewer employees. However the difference in numbers did not affect the
statistical results because the samples used were a true representation of each
organizations population (see table 3.1 and 3.2). Also, since both the Local
Government employees and civil servants were represented in the study, it can
be safely concluded that the opinions expressed were a reflection of public
organizations employees.

Findings further indicate that 59% of the respondents were males while 41%
were females across Kampala City Council and the Ministry of Education and
Sports. This shows that both males and females opinions were fairly captured.
On average, the males were the majority compared to their female counterparts
in public organizations in Uganda.

Results also indicated that on average,

operatives across Kampala City Council and the Ministry of Education and
Sports were the majority (83.3%) of participants in the study.
12.5% and Managers were 4.2%.

107

Supervisors were

Findings of the study further confirmed that across Kampala City Council and
the Ministry of Education and Sports, majority of the respondents (23.7%) were
between 36 - 40 years of age. This implies that the respondents on average had
the cognitive maturity to understand and interpret the questionnaire
appropriately.

The results also showed that on average respondents were

Bachelors degree holders (40.6%) across Kampala City Council and the Ministry
of Education and Sports. So respondents were generally educated enough to
appreciate effective performance management practices and therefore give
reliable information.

Finally, the results revealed that across Kampala City Council and the Ministry
of Education and Sports, majority of the respondents (33.3%) had served their
respective organizations between 6 to 10 years.

The minority among the

respondents had served in their respective organizations for less than 2 years.
This implies that the study participants were competent enough to respond
appropriately to the questionnaire that sought to establish whether there was a
relationship between performance management practices and employee
performance in public organizations in Uganda.

4.2 A Comparison between Performance Management Practices and

Employee Performance across Organizations
The mean difference between Kampala City Council and the Ministry of
Education and Sports performance management practices and employee
performance was established using Mann-Whitney analysis. This was done to
108

establish whether the two organizations differed with regard to performance

management practices and employee performance. The findings are shown in
table 4.2.

Table 4.2 Showing a Comparison between Performance Management

Practices and Employee Performance across Kampala
City Council and the Ministry of Education and Sports

Variable

Decision rights

Organization
Kampala
City Ministry of Education
Council
and Sports
Number Mean Rank Number Mean Rank
248.06

Incentives
Performance
Contracts
Organization
Resources
Performance
Measurement
Government
Policy

346

249.90

281.53
171

277.74

249.58

278.39

240.01

298.11

249.33

278.92

255.76

265.68

The findings in table 4.2 show that there is a mean difference between Kampala
City Council and the Ministry of Education and Sports in terms of performance
management practices and employee performance. The results further reveal that
the mean values of the Ministry of Education and Sports in terms of decision
rights, incentives, performance contracts, organization resources, performance
measurement, government, and above all employee performance were greater
than the mean values of Kampala City Council, thus the Ministry of Education
and Sports seems to perform better than Kampala City Council.
109

In order to establish whether these observed mean differences between the

Ministry of Education and Sports and Kampala City Council in terms of
performance management practices and employee performance are significant, a
Mann-Whitney (U) test was done and its results triangulated with the Wilcoxon
(W) test. Triangulation helped in assessing whether the results provided by
Mann-Whitney (U) test were explaining what they meant

to explain (if the

mean difference between Kampala City Council and the Ministry of Education
and Sports of performance management practices and employee performance
were different as the Mann-Whitney (U) test demonstrated). The results are
shown in table 4.3 below.
Table 4.3: Shows the Mann-Whitney (U) Test for the Mean Difference
between Kampala City Council and the Ministry of Education and Sports in
Terms of Performance Management Practices and Employee Performance

Variables
Decision Rights
Incentives
Performance
Contracts
Organization
resources
Government
policy
Employee
Performance
Performance
measurement

Asymp.
MannWilcoxon
Sig. (2Whitney U
W
Z
tailed)
25598.000 86324.000 -2.784
.005
26239.000 86965.000 -2.569
.010
26129.500 86855.500 -2.383
.017

Exact
Sig. (2tailed)
.005
.010
.018

22796.500 83522.500 -4.620

.000

.000

28277.000 89003.000 -.784

.433

.438

22535.000 83261.000 -5.116

.000

.000

26040.000 86766.000 -2.411

.016

.016

a. Grouping Variable: organization

110

The results in table 4.3 show that the mean difference between Kampala City
Council and the Ministry of Education and Sports in terms of performance
management practices is significant (p<.05) (decision rights, U=25598, p<.05;
incentives, U=26239, p<.05; performance contracts, U=26129.5, p<.05;
organization resources U=22796, p< 0.05; performance measurement U=26040,
p<.05) and employee performance (U=22535, p<.05). On average, the Ministry
of Education and Sports has higher mean performance management practices
and employee performance compared to Kampala City Council (see table 4.3).
This implies that the Ministry of Education and Sports performs better than
Kampala City Council as demonstrated by the mean difference table 4.3.
However, the Ministry of Education and Sports and Kampala City Council do
not significantly differ on government policy (U=28277, p>.05). Thus the mean
difference between the Ministry of Education and Sports and Kampala City
Council on government policy is just a random difference. This is because the
two institutions are public organizations, and government policies cut-across
them in the same way.

4.3 Factorial Analysis

4.3.1 Principal Components for Performance Management Practices

Principal Component analysis with Varimax rotation and Kaiser Selection

criterion method were used to extract the most important components or
dimensions that accounted for much of the variance in each performance
management practices. The results are indicated in table 4.4.
111

Table 4.4

Showing Performance Management Practices Rotated

Component Matrix
Component
Item

I am satisfied with the

transport allowance given to
me.

.811

I am satisfied with the

general allowances the
organization gives me.

.777

I am satisfied with the total

compensation package given
to me.

.767

I am satisfied with the

housing facilities the
organization gives me.

.704

I am satisfied with the

medical facilities extended to
me and my family.

.698

I am satisfied with all my

monetary compensation.

.679

My total compensation is in
line with my performance.

.661

I am satisfied with the

employee saving scheme the
organization has put in place.

.596

Employees are involved in

decision making in this
organization.

.529

Decisions made in this

organization are
communicated to the
concerned employees.

.525

112

The performance
measurement the organization
uses indicates the customer
satisfaction.

.719

My organization has
performance measures that
indicate the service quality.

.710

The performance measures

my organization uses indicate
the operating efficiency.

.707

My organization has
performance measures that
indicate the outcome effects.

.651

We are all satisfied with the

performance measures.

.610

My organization has
performance measurements
that indicate the quantity of
services provided.

.578

Training is available to help

staff measure performance.

.444

My job requirements are spelt

out in my job contract.

.729

I am happy with my
performance contract.

.687

My contract is written on
paper and communicated
internally and externally.

.685

Individual roles in the

organization have been
documented very specifically
and detailed.

.675

My performance contract
enables me to perform better.

.642

113

Individual roles in the

organization are
unambiguously related to the
mission of my organization.

.480

The sum of job requirements

to be achieved provides a
complete picture of the
results that should be
achieved by my organization

.435

I have adequate knowledge to

enable me do my job well

.890

I am enabled to acquire more

knowledge and skills by my
organization whenever
necessary

.726

The available information

technology enables me to
perform better

.553

Eigen Values
% of variance

4.877 3.945 3.875 3.725 2.898

13.547 10.957 10.765 10.348 8.049

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization
a. Rotation converged in 5 iterations.
1= Incentives
2= Decision Rights 3= Performance measurement
4= Performance contract 5= Organization resources

As indicated in table 4.4 above, a total of five components were extracted.

Results revealed that incentives explained more of performance management
practices followed by decision rights, performance measurement and
organization resources.

Incentives explained 14%, decision rights 11%,

performance measurement 11%, performance contracts 10%, and organization

114

resources 8% giving a total of 54%. This implies that 46% of the variation in
performance management practices is explained by other factors.

From the Factor loadings of the Principal Component Analysis within

incentives, transport allowances ranked highest among the components with a
factor loading of 0.811 followed by organization allowances, compensation
package, housing facilities, medical facilities, momentary compensation, total
compensation in line with performance and employee saving schemes with
factor loadings of 0.777, 0.767, 0.704, 0.698, 0.679, 0.661 and 0.596
respectively. Within decision rights, employee involvement in decision making
ranked highest with a factor loading of 0.529 followed by communication of
decisions made in the organization with a factor loading of 0.525. This means
that the higher the value of the factor loading, the more important it is compared
to other indicators in a given variable.

Within performance measurement, customer satisfaction was the highest

followed by service quality, operating efficiency, outcome effects, performance
measurement satisfaction, quality of services provided and availability of
training to help staff measure performance with factor loadings of 0.719, 0.710,
0.707, 0.651, 0.610, 0.578 and 0.444 respectively. Within performance contracts,
well spelt out job requirements ranked highest among the performance contract
indicators, followed by being happy with performance contracts, contracts on
paper and communicating the contractual terms internally and externally,
115

documentation of individual roles specifically in details, performance contracts

enabling employees to perform better, individual roles in the organization being
unambiguously related to the mission of the organization and the sum of job
requirements to be achieved proving a complete picture of the results that should
be achieved by the organization with factor loadings of 0.729, 0.687, 0.685,
0.675, 0.642, 0.480 and 0.435 respectively. Within organization resources,
having adequate knowledge to enable employees perform their jobs well was the
highest followed by being enabled to acquire more skills by the organization
whenever possible and availability of information technology with which to do
the job with factor loadings of 0.890, 0.726 and 0.553 respectively.

4.3.2 Performance Component Matrix

Six (6) components were extracted explaining 71% of employee performance as
shown in the rotated component matrix below.
Table 4.5 Showing Performance Rotated Component Matrix
Component

Items
1
I am able to produce the
quantity of work as
specified by my
organization.

.875

I am able to produce the

quantity of work on time.

.868

I am able to produce the

quantity of work as set by
my Supervisor.

.789

116

Employee morale ranks

highest on our
Administrations agenda.

.874

Supervisors in this
organization try very hard
to boost their subordinates
morale.

.762

Employees in this
organization have high
morale.

.734

We regularly come up with

innovations that match
customer needs.

.805

My Section members
regularly come up with
innovations that contribute
to the organizations work
excellence.

.781

Our supervisors are

satisfied with the
innovations we usually
come up with.

.649

My Section staff always

strives for work
excellence.

.767

We have acquired work

excellence in this
organization.

.672

We have attained work

efficiency in my unit
operations.

.772

Our customers are satisfied

with our work efficiency.

.627

I am able to produce
quality work as specified
by our customers.

.647

117

I am able to produce
accurate work that matches
customer requests.
Eigen Values
% of variance

.619

5.665 2.470 2.195 1.689 1.544 1.427

26.974 11.763 10.45 8.041 7.353 6.794
4

Extraction method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 6 iterations.
1 = Quantity of work 2 = Employee morale 3 = Innovation 4 = Work
Excellence
5 = Efficiency
6 = Quality of work

Findings in the factor analysis table 4.5, quantity of work explained 27% of the
variation in employee performance, followed by morale with 12%,
innovativeness with 10%, work excellence with 8%, efficiency with 7% and
lastly quality of work with 7%. Thus all the above six components explained
71% of the total variation in employee performance. Hence the data was a good
fit for the model.

A further analysis within each of the above six components revealed that: within
the quantity of work, being able to produce the quantity of work as specified by
the organization was the most important item, followed by being able to produce
the quantity of work on time, and lastly being able to produce the quantity of
work as set by the supervisor, with factor loadings of 0.875, 0.868 and 0.789
respectively. Within morale, employee morale ranking the highest on the
administrations agenda was the most important followed by supervisors in the
organization trying very hard to boost their subordinates morale and employees
118

in the organization having high morale, with factor loadings of 0.874, 0.762 and
0.734 respectively.

Within innovation, regularly coming up with innovations that match customer

needs was the most important. This was followed by section members regularly
coming up with innovations that contribute to the organizations work
excellence.

Supervisors being satisfied with innovations employees usually

come up with, was the last. Items factor loadings were 0.805, 0.781, 0.781 and
0.649 respectively. Within work excellence, section staff always striving for
work excellence was the highest followed by acquiring work excellency in the
organization with factor loadings of 0.767 and 0.672 respectively.

With

efficiency, attaining work efficiency in the unit operations ranked highest

followed by customer satisfaction with employee work efficiency. Their factor
loadings were 0.772 and 0.627 respectively. Within quality of work, being able
to produce quality work as specified by customers was the most important
followed by being able to produce accurate work that matches customer requests
with factor loadings of 0.647 and 0.619 respectively.

4.3.3 Government Policy Component Matrix

From the government policy component matrix table 4.6, the major items were
selected from the 10 items and ranked in their order of importance. Three factors
were extracted and they explained 64.2% of the total variations in government
policy.
119

Table 4.6: Government Policy Rotated Component Matrix

Item
Government employee safety policy enhances
employee satisfaction
Government transfer policy influences the
morale enjoyed by employees in my
organization
Government promotion policy influences the
timeliness of work produced by workers in this
organization
Government recruitment policy influences
workers performance in my organizations
Government administrative policy and
guidelines influence the timeliness of services
our customers enjoy
Government training policy influences work
excellence exhibited by my organization
Government employee development policy
influences the quality of services enjoyed by
our customers
Government procurement policy influences the
nature of information technology in my
organization
Government direct reward policy (governing
basic pay, wages, allowances, bonuses,
commissions and gratuity
Government direct reward policy (governing
transport, housing, health services, insurance,
saving scheme, retirement benefits) influences
employee service delivery
Eigen value
% of Variance explained
Cumulative Percentage explained

Components
1
.799

.721

.684

.486
.839

.804
.611

.434

.885

.826

2.442
24.4
24.4

2.208 1.773
22.1 17.7
46.5 64.2

Extract Method: Principal Component Analysis

Rotation Method: Varimax with Kaiser Normalization
a. Rotation converged in 3 iterations
1= Personnel policy
3= Reward policy

2= Training, development and operational policies

120

Table 4.6 analysis shows that government policy can be explained by three
major factors generated from the ten (10) items used for measuring government
policy: factor 1 (personnel policy) explains 24.4% of government policy, factor 2
(training and development policy) explains 22.1% of government policy and
factor 3 (reward policy) explains 17.7% of the government policy. Thus 64.2%
of government policy can be explained by personnel policy, training and
development policy and reward policy.

This implies that the effect of

government policy on the employee performance in public organizations can be

investigated through three major factors namely: personnel policy, training and
development policy and the reward policy. The study sought to establish a
relationship between performance management practices, government policy and
employee performance in public organizations in Uganda. Government policy
was the intervening variable. So it is only the interactive effect (relationship)
among the performance practices (independent variables), government policy
(intervening variable) and employee performance (dependent variable) which
were established.

Further analysis within each of the above three components revealed that: within
the personnel policy, government employee safety policy enhancing employee
satisfaction, ranked the highest, followed by government transfer policy
influencing the morale enjoyed by employees in the organization, government
promotion policy influencing the timeliness of work produced by workers in this
organization

and lastly government recruitment policy influencing workers'

121

performance in the organization, with factor loadings of .799, .721, .684 and
.486 respectively. Within training, development and operational policies,
government administrative policies and guidelines influencing the timeliness of
services the customers enjoy was the most important followed by government
training policy influencing the work excellence exhibited by the organization,
government employee development policy influencing the quality of services
enjoyed by the customers, government procurement policy influencing the
nature of information technology in the organization was the last with factor
loadings of .839, .804, .611 and .495 respectively. Within the reward policy,
government direct reward policy on governing basic pay, wages, allowances,
bonuses, commissions and salary increments on the influencing level of
employee commitment in the organization was the most important, followed by
government direct reward policy on governing transport, housing, health
services, insurance, saving scheme and retirement benefits influencing employee
service delivery, with factor loadings of .885 and .826 respectively.

4.4 Inferential Analysis

In order to establish the strength and direction of the relationship between
performance management practices and employee performance in public
organizations, a Likelihood Ratio chi-square test was carried out on each
performance management practice against employee performance as discussed
in the hypotheses below.

122

4.4.0 Hypotheses Testing

4.4.1 Hypothesis 1: Relationship between Decision Rights and Employee
Performance
The first hypothesis stated that there was a positive relationship between
decision rights and employee performance in the public sector. Table 4.7 shows
the results of the findings.
Table 4.7: Showing the Relationship between Decision
Rights and Employee Performance in the Public
Sector in Uganda

Employee Performance
Responses

Count

Decision Rights

Disagree

Neutral

Total

Total

18

30

% of
Total

1.0%

3.5%

1.4%

5.8%

Count

132

179

315

.8% 25.5%

34.6%

60.9%

% of
Total
Agree

Disagree Neutral Agree

Count

25

140

172

% of
Total

1.4%

4.8%

27.1%

33.3%

Count

16

175

326

517

% of
Total

3.1% 33.8%

63.1% 100.0%

Pearson Chi-Square = 71.450, df = 4, sig = .000

Somerd = .287, sig = .000

Table 4.7 shows that there is a significant positive relationship between decision
rights and employee performance. This is evidenced by the significant Pearson
123

chi-square (X2(4) =71.450, p<.05) and the significant positive value (.287, p
<.05) of Somerd test which measures the direction of the relationship. Thus
when employees are involved in making decisions that concern them, their
performance is expected to significantly increase (27.1%) than when employees
are not involved in making decisions concerning them (1.0%). However, the
results further revealed that involving employees in the decision making process
should be moderate (if we take neutral to represent moderate). This is supported
by a higher expected performance of 34.6% compared to the performance of
27.1% when the organizations employees are fully involved in the decision
making process. Thus the hypothesis of a positive relationship between decision
rights and employee performance was therefore accepted.

Similarly qualitative findings on decision rights revealed that it is only

employees at the managerial level (2%) that were fully involved in the decision
making processes.

Supervisors (22%) were partially involved through

consultation while the operatives were not involved at all (see appendix VIII 4.13).

This is in agreement with the quantitative findings in which employees

who were not involved in the decision making processes (disagreed), and their
performance was low (1.4%) (see table 4.7). On the other hand, respondents
who were involved in the decision making processes (agreed), and their
performance was high (27.1%). Thus as employees are involved in the decision
making processes, their performance increases.

124

4.5.2 Hypothesis 2: Relationship between Incentives and Employee

Performance
The second hypothesis stated that there was a positive relationship between
incentives and employee performance in the public sector. Table 4.8 displays the
results of the findings.

Table 4.8: Showing the Relationship between Incentives and Employee

Performance in Public Organizations in Uganda
Responses

Count

Employee Performance
Disagree Neutral Agree

Incentives

disagree

neutral

agree

Total

Total

14

125

240

379

% of
Total

2.7%

24.2%

46.4%

73.3%

Count

45

53

99

% of
Total

.2%

8.7%

10.3%

19.1%

Count

33

39

% of
Total

.2%

1.0%

6.4%

7.5%

Count

16

175

326

517

% of
Total

3.1%

33.8% 63.1%

100.0%

Pearson chi-Square = 15.286, df =4, sig = .004

Somerd = .018, sig = .665

Table 4.8 shows that there is a significant inverse relationship between

incentives and employee performance in public organizations. This relationship
is evidenced by the significant Pearson chi-square (X2(4) =150.042, p<.05).

125

However, the value of Somerd (.379, p>.05) test which measures the direction
of the relationship was insignificant. This implied that the positive relationship
due to the positive value of Somerd was just a random direction. Employees
who were dissatisfied with the incentives given to them performed better
(46.4%) than employees who were satisfied with the incentives given to them
(6.4%), thus signifying an inverse relationship. The hypothesis of a positive
relationship between incentives and employee performance was rejected, thus
accepting an alternative hypothesis of an inverse relationship between incentives
and employee performance.

Similarly, qualitative findings on incentives revealed that majority of the

respondents (94%) were not satisfied with the incentives and only 6% of the
participants were satisfied with the incentives (see appendix VIII 4.14). While
respondents who were dissatisfied with the incentives exhibited higher
performance (46.4%) (see table 4.8) compared to their counterparts who were
satisfied with the incentives (6.4%).

Thus as incentives were increased,

employee performance deteriorated.

4.4.3 Hypothesis 3: Relationship between Performance Contracts and

Employee Performance in the Public Sector in Uganda
The third hypothesis stated that there was a positive relationship between
performance contracts and employee performance in the Public Sector. Table 4.9
shows the results of the findings.

126

Performance Contracts

Table 4.9 Showing the Relationship between Performance Contracts and

Employee Performance in the Public Sector in Uganda
Employee Performance
Response Count
Disagree
% of Total
Neutral

Count
% of Total

Agree

Count
% of Total

Total

Count

Total

Disagree Neutral Agree

8

22

1.5%

1.2%

1.5%

4.3%

104

80

190

1.2%

20.1%

15.5%

36.8%

65

238

305

0.4%

12.6%

46.0%

59.0%

16

175

326

517

3.1%

33.8%

63.1%

100.0%

% of Total

Pearson Chi-Square = 150.042, df=4, sig = .000

Somerd = .379, sig = .000

Table 4.9 shows that there is a significant positive relationship between

performance contracts and employee performance. This is evidenced by the
significant Pearson chi-square (X2(4) =150.042, p< 0.05) and the significant
positive value (.379, p <.05) of Somerd test which measures the direction of the
relationship. This implies that employees whose performance contracts were
clearly specified, detailed, documented and showing job requirements of
individuals roles performed better (46.0%) compared to the performance (1.5%)
of employees whose performance contracts were unclearly specified, detailed,
documented and unclearly showing job requirements of individuals roles. The
hypothesis of a positive relationship between performance contracts and
employee performance in Public Organizations was therefore accepted.
127

Similarly, qualitative findings on performance contracts indicated that majority

(97%) of the participants appreciated performance contracts while only 3% did
not appreciate them (see appendix VIII 4.15). Respondents who appreciated
performance contracts had high performance (46.0%) (see table 4.9) compared
to their counterparts who did not appreciate them and had low performance
(1.5%). Thus as employees appreciate performance contracts as being clear their
performance increases as opposed to a situation when performance contracts are
viewed as unclear (not appreciated).

4.4.4 Hypothesis 4: Relationship between Organization Resources and

Employee Performance
The fourth hypothesis stated that organization resources were positively related
to employee performance in Public Organizations. Table 4.10 shows the results
of the findings.

128

Table 4.10: The Relationship between Organization Resources and

Employee Performance in Public Organizations in Uganda

Organization Resources

Responses

Employee Performance
Count

Inadequate
% of Total
Neutral

Count
% of Total

Adequate

Count
% of Total
Count

Total

% of Total

Disagree

Neutral Agree

Total

28

16

51

1.4%

5.4%

3.1%

9.9%

100

155

264

1.7%

19.3%

30.0%

51.1%

47

155

202

.0%

9.1%

30.0%

39.1%

16

175

326

517

33.8% 63.1%

100.0%

3.1%

Pearson Chi-Square = 54.487, df=4, sig = .000

Somerd = .270, sig = .000

Table 4.10 shows that there is a significant positive relationship between

organization resources and employee performance. This is evidenced by the
significant Pearson chi-square (X2(4) =54.487, p<.05) and the significant
positive value (.270, p<0.05) of Somerd test which measures the direction of the
relationship. Employees who had received adequate organization resources in
the form of knowledge, information, skills and information technology
performed better (30%) than employees who had not received adequate
organization resources (3.1%). This implies that employees with adequate
organization resources perform better than employees with inadequate
organization resources. The hypothesis of a positive relationship between
organization resources and employee performance in Public Organizations was
therefore accepted.
129

Similarly, results of the qualitative findings revealed that majority of the

interviewees (72%) had no access to knowledge and skills development facilities
and information technology and their (see appendix VIII 4.16) performance
was low (3.1%) (see table 4.10). On the other hand their counterparts who
enjoyed access to knowledge and skills development facilities and had access to
information technology (15%) (see appendix VIII - 4.16) their performance was
high (30%). Thus this confirms that as employees access to knowledge, skills
development and information technology, increases, their performance increases.

4.4.5 Hypothesis 5: Relationship between Performance Measurement and

Employee Performance

The fifth hypothesis stated that a positive relationship existed between

performance measurement and employee performance in the public sector. Table
4.11 shows the results of the findings.

130

Table 4.11: The Relationship between Performance measurement and

Employee Performance in the Public Sector in Uganda
Responses Count

Employee Performance
disagree neutral

Disagree
Performance
Measurement

% of Total

Total

Neutral

52

1.2%

10.1%

107

Count
% of Total

agree

1.7%

Count

% of Total

.2%

Count

16

% of Total

3.1%

agree
23

Total
81

4.4% 15.7%
193

309

20.7% 37.3% 59.8%

16

110

127

3.1% 21.3% 24.6%

175

326

517

33.8% 63.1% 100.0%

Pearson Chi-Square = 72.752, df=4, sig = .000

Somerd = .347, sig = .000
Table 4.11 shows that there is a significant positive relationship between
performance measurement and employee performance in public organizations.
This is evidenced by the significant Pearson chi-square (X2(4) =72.752, p<.05)
and the significant positive value (.347, p<.05) of Somerd test which measures
the direction of the relationship. This implies that clear performance
measurements in the form of the level of customer (public) satisfaction, the
quality of services offered, quantity of services provided, operating efficiency
and quantity of the services enabled employees to perform better (21.3%)
compared to employees whose performance measurements were unclearly
defined ( 4.4%). This implies that when public organizations performance
measurement clearly indicates the level of customer (public) satisfaction, the
quality of services to be offered, quantity of services to be provided, operating
131

efficiency and the outcome of the services offered, employees performance

increases compared to when performance indicators are not clearly defined. Thus
this implies the existence of a positive relationship between performance
measurements and employee performance.

Similarly, qualitative findings on performance measurement revealed that

participants who were satisfied with the performance measurement (12%), (see
appendix VIII - 4.17), their performance was 21.3% (see table 4.11) while that of
their counterparts who were not satisfied with the performance measurement
(41%), their performance was 4.4%.

Thus if performance measurement is

satisfactory, with regard to what it intends to measure, employee performance

increases.

4.4.6 Hypothesis 6: The Interactive Effect among Performance Management

Practices, Government Policy and Employee Performance
A sixth hypothesis stated that there was an interaction effect (relationship)
among decision rights, incentives, performance contracts, organization
resources, performance measurement, government policy and employee
performance in public organizations in Uganda.

In order to establish this

maximum interaction effect, the researcher used the Log-Linear analysis test and
the results are presented in table 4.12.

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Table 4.12: A 3-way Interaction Effect (relationship) Among Performance

Management Practices, Government Policy and Employee
Performance in the Model
A higher-order
Interaction Effect K
(K)
3

Likelihood Ratio
df
280

Pearson

Chi-Square Sig. Chi-Square

541.948 .000

2193.737

Sig.
.000

Goodness-of-Fit statistics
Likelihood Ratio chi-square = .000, df = 0, p = -INF
Pearson chi-square = .000, df = 0, p = -INF

Table 4.12 shows a highest-order 3-way interaction (3-way relationship, K = 3)

that is significant.

This implies that the most important and highest-order

interaction which is produced by the model is a 3-way interaction (K=3) and this
interaction effect is significant (K=3, p<.05). The goodness of fit statistics
further confirms the significance of the model comprised of a 3-way interaction
effect (Likelihood Ratio x2(0) =.000, p = -INF). An interaction model is
significant if the observed chi-square of the model is .000 (i.e. the interaction
model fits the data observed) and its p-valve is in infinity (INF), implying that
the model is perfect in yielding the results according to the observed data.

Despite the existence of a 3-way interaction among performance management

practices, government policy and employee performance, some 3-way
interactions (appendix X) are significant while others are insignificant. The
most critical of all the significant 3-way interactions according to the Z-scores
(in Log-linear analysis, the Z-score is used in the calculation of the correlation
coefficient (r) of interaction effect thus the higher the Z-score, the stronger the
133

relationship of the interaction) of the parameter estimates (appendix X1) of the

3-way interactions is employee performance*performance
measurement*government policy (partial x2(8) =20.434, p<.05) due to its highest
Z-score (1.058) compared to other significant 3-way interactions. This implies
that public organizations should carefully align government policies with their
performance measurements if they are to achieve subsequent improvement in
their employee performance.

The 3-way order interactions which are insignificant are: incentives

*performance contracts*organization resources (partial x2(8)=16.691, p>0.05);
employee performance*incentives*performance measurements (partial
x2(8)=3.922, p>0.05); decision rights*incentives*performance measurements
(partial x2(8)=3.583, p>0.05); decision rights*performance
contracts*performance measurements (partial x2(8)=9.966, p>0.05); employee
performance*organization resources*performance measurement (partial
x2(8)=8.523, p>0.05); performance contracts*organization
resources*performance measurement (partial x2(8)=4.551, p>0.05); employee
performance* decision rights*government policy (partial x2(8)=12.186, p>0.05);
employee performance* incentives*government policy (partial x2(8)=2.330,
p>0.05); employee performance*performance contracts*government policy
(partial x2(8)=12.462, p>0.05); decision rights*organization
resources*government policy (partial x2(8)=15.355, p>0.05);
incentives*organization resources*government policy (partial x2(8)=7.063,
134

p>0.05); performance contracts*performance measurement*government policy

(partial x2(8)=11.558, p>0.05); and organization resources*performance
measurement*government policy (partial x2(8)=11.558, p>0.05). Thus public
organizations should not simultaneously initiate the identified 3-way interaction
of performance management practices and government policy because their
effect is insignificant.

4.5 Conclusion
The results of the findings revealed that there was a significant positive
relationship between performance management practices and employee
performance.

Thus

improving the management of each performance

management practice would increase employees performance in public

organizations in Uganda. However, incentives showed an inverse relationship
with employee performance implying that the incentives given to employees in
public organizations were not commensurate with employee performance. The
major finding of the study shows a significant 3-way interaction effect
(interrelationship) among performance measurement, government policy and
employee performance.

135

4.6 Discussion of the Findings

Results of the factorial analysis (Principal component analysis) indicated that
decision rights, incentives, performance contracts, organizational resources and
performance measurements explain only 54% of the performance management
practices that can be used by public organizations to improve their performance.
Despite this 54% being a relatively fair percentage to effect change in public
performance, approximately 46% of the remaining performance cannot not be
explained by manipulating decision rights, incentives, performance contracts,
organizational resources and performance measurements. In order to have a full
picture of performance management practices that affect an increase in
employees performance to approximately 70%, other factors are worth
identifying and incorporating in the performance management practice package
of an organization. Such additional factors may include aspects such as job
autonomy and organizational support. This finding is in agreement with Tilaye,
(2007), who argued that factors such as job autonomy and psychological contract
(organizational support) significantly affect employee performance.

Job autonomy is a situation that permits employees to use their talents and
ingenuity fully. This is an aspect that causes employees to assume personal
responsibility for their work and accountability of its outcomes. It is very
important for public employees to have autonomy at their workplaces. This
increases personal responsibility and accountability among public employees.
An employee who is responsible for his actions and accountable for the results
136

tries to see to it that the actions and hence the results are in line with the public
objectives and goals. This can partly explain why public organizations in
Uganda on average perform poorly. The absence of personal responsibility and
accountability on an individual basis results in inappropriate actions and poor
results. This argument is in line with Tilayes (2007) study findings which
established that there is a positive correlation between autonomy and employee
performance. Tilaye, (2007) asserted that when employees are responsible for
their actions and accountable for their results, their performance increases. This
is supported by Durham, et al., (1994) who also presented further evidence in
support of the positive correlation between job autonomy and propensity to work
hard. Lack of autonomy by public organization employees in public
organizations in Uganda is partly to blame for the prevailing poor performance
witnessed in public organizations in the country. This study established that
employees who were not fully involved in decision making processes had no job
autonomy and therefore performed poorly (see table 4.7 and appendix VIII 4.13) as will be explained under the first hypothesis.

Another performance management practice that could have a significant direct

relationship with employee performance is the organization psychological
contract. Organizational psychological contract is the extent to which employees
perceive that the organization values their contribution and cares about their well
being (Eisenberger, et al., 1990). This organization support is directly related to
employees' performance. An employee who feels that she/he is valued by the
137

organization and is cared for because of his/her out-standing performance is

more likely to continue performing well in order not to lose the support in case
his performance declines.

Similarly, Eisenberger, et al., (1990), noted that

employees exchange their genuine effort for greater care, concern, and support
they receive from their organizations.

When employees are treated with

consideration, they display greater levels of commitment. The extent to which

management is perceived as receptive to employee ideas and its effort to make
extra effort to solve employee problems can increase performance through
increase in employee commitment, a view also held by many scholars (Pfeffer,
1994; Meyer & Allen, 1997; Summers & Hyman 2005; Tilaye, 2007;
Williamson 2008; Singh 2009).

4.6.1 Relationship between Decision Rights and employee performance

The first hypothesis sought whether a relationship exists between decision rights
and employee performance in public organizations in Uganda.

Findings

revealed that revealed that there is a significant positive relationship between

decision rights and employee performance. This was in line with the goal setting
theory which reaffirms that there is a relationship between decision rights and
employee performance in public organizations.

The existence of positive

relationship between decision rights and employee performance was ascertained

by the significant Pearson chi-square (X2(4) =71.450, p<.05) and the significant
positive value (.287, p<.05) of Somerd test which measures the direction of the
relationship. The results of the study indicated that when employees are involved
138

in issues pertaining to their jobs and themselves as workers, performance is

increased by 27.1% (see table 4.7). On the other hand, when employees are not
involved in making decisions concerning them and their jobs, their performance
is reduced by 1.0% (again see table 4.7). The results however indicated that
involving employees in the decision making process should be moderate. This is
supported by a higher expected performance of 34.6% compared to the
performance of 27.1% when the organizations employees are fully involved in
the decision making process. Thus the hypothesis of a positive relationship
between decision rights and employee performance was therefore accepted.

Results of the qualitative findings revealed that there is very limited employee
involvement in decision making (4% employees involved as opposed to the
majority 94% who were simply given directives) (see appendix VIII 4.13).
To quote a teacher at Kinawataka Primary School (not real name):
We are the implementers of the education policies yet we are never
consulted on issues pertaining to the school curriculum. The Ministry
simply gives us orders through circulars.

Given a chance to

participate in the decision making processes on issues concerning the

syllabus and the School curriculum, we could give viable ideas and the
problems

you

are

witnessing

in

schools

minimized.(Verbatim Report, September, 2009).

139

today

would

be

Amosi, (not real name) a supervisor in the Public Health Department

at

Kampala City Council observed that whereas top management and all those at
upper administrative and managerial levels participate fully in the decisions that
concern their jobs and Kampala City Council generally, to a certain extent,
supervisors are merely consulted. To make matters worse, operatives are just
instructed to implement decisions without having to query anything. He was of
the view that it would be better for all employees to participate in the decision
making processes on issues concerning them and their jobs. This observation
was confirmed by Hawa (not real name), a secretary at the Ministry of Education
and Sports who said that usually management holds meetings in which most
decisions are taken. At times supervisors are invited to such meetings but
operatives have never been invited.

The observations advanced by the respondents on decision rights in this study

are in line with the goals setting theory which advocates for employee decision
rights to be upheld if organization goals and objectives are to be accomplished.
When employees are involved in decision making processes concerning their
work related issues, they develop positive attitude, become committed to their
work and are more willing to go an extra mile. They even feel valued and get a
feeling of belonging.

A committed employee can do what ever is possible to

see that she/he achieves satisfactory results. Involved workers are also more
likely to effectively implement decisions in which they have participated and
hence their performance is likely to be better than when decisions are just
140

imposed on them for implementation (Owolabi & Adeola; 2011; Summers &
Hyman 2005; and Singh 2009).

Employees can either be directly engaged in

discussions or represented by fellow workers who may be more informed about

certain issues. Whichever method the organization may choose to use, it is likely
to result in workers job satisfaction and thus commitment to performance.
Aghion and Tirole (1997), further reaffirmed that participation in the decision
making process motivates employees to improve their performance without
causing severe disruption to the decision-making process which most managers
are afraid of.

The degree to which public employees are involved in the

decisions that concern them and their jobs therefore largely determines the
public organizations success in the provision of public services (Summers &
Hyman 2005. Thus full participatory decision making approach that values
employee contributions (regardless of workers status) results in collective
responsibility and ultimately outstanding performance.

Unlike private organizations, the decision process in public organizations is quite

complex and sophisticated because of the tendency to centralize all operational
processes including decision making. In most cases the lower employees are
required to implement what has already been decided by the directors without
question and hesitation. Thus involving employees in the decision making in
ways that maximize their performance may be an extremely difficult task in
public organizations. However, in order to achieve moderate participatory
decision process public organizations must come up with a comprehensive
141

participatory decision making approach. This approach related to a situation

whereby employees decisions from sections, departments and divisions in a
public organization are all presented, analyzed and if viable, incorporated in the
final decision.

If this proposal is to work at the section level, employees

decisions are captured after reaching a consensus. The accepted decisions should
then be forwarded to the department.

Then the department level decisions

should be presented at the division level. When consensus is reached at the

division level, the decisions should immediately be communicated to all
concerned employees.

Similarly, empirical studies by various researchers (Cindy, 2002; Aoki &

Okuno, 1996) show that decentralizing decision rights alleviates the burden on
top management of making uninformed decisions. Shallow employee
involvement in decision making (centralization of decision rights) ignores the
concerns of the frontline employees and thus leads to poor attitude and
employees being uncommitted to the executive decisions. Barringer and
Bleudorn, (1999) hold the same views when they argue that full participation of
public employees in the decision making process is not only challenging but is
also very costly in terms of time spent on meetings instead of working. They
continue to observe that at times allowances given to meeting participants (if
any) are costs that have to be absorbed by the concerned organizations. Thus
moderate involvement of employees in the decision making processes is
appropriate for public organizations much as full employee involvement in
142

decision making would be preferred because of the greater benefits both

employees and organizations stand to enjoy as a result of this approach to
decision making.

4.6.2 Relationship between Incentives and Employee Performance

The third hypothesis sought to establish the relationship between incentives and
employee performance. Findings on the relationship between incentives and
employee performance revealed that there was an inverse relationship between
incentives and employee involvement in public organizations (see table 4.7).
The findings however contradicted the agency theory that stated that there is a
relationship between incentives and employee performance.

As incentives

increase, according to the study findings, performance among employees

deteriorates. Although incentives are meant to improve employee performance,
this study shows that incentives in public organizations appear to have an inverse
relationship with performance.

One is forced to conclude that there are

underlying fundamental factors causing this state of affair.

The inverse relationship between incentives and employee performance

established by this study is in partial agreement with Verbeetens (2007) study
that established that use of incentives is only positively associated with quantity
performance but not with quality performance. Findings established by the two
studies exhibit a loophole in the agency theory which assumes that there is a
relationship between incentives and employee performance. Standing, (2004)
143

too, observes that although incentives are able to increase employee

performance, performance induced by incentives, only increases after the first 15
of the 60 experimental periods. Thus the first 15 experimental periods were
probably used by the participants to figure out how they could perform better.

The observed inverse

relationship

between

incentives

and

employee

performance in public organizations is partially attributed to incentive injustice

which is due to interdependence of employee activities and hence results. In
most cases, the activities of an employees department in public organizations
depend upon the activities of other departments. With this kind of
interdependence, a problem arises when it comes to rewarding the achievements.
Top officials in public organizations are well rewarded compared to lower
officials yet it is the operatives who perform much of the work. It is prevalent in
public organizations to find top officials given nice cars and a lot of incentives
like good pay and attractive allowance packages while the lower cadre
employees are starving with small salaries. This kind of situation (incentive
injustice) only deteriorates performance amidst increasing incentives. Similarly
other studies (De-Bruijn, 2002; Van-Thiel & Leeuw, 2002; Burgess & Ratto,
2003), have also observed that due to interdependence of employee activities
especially in public organizations, unfair rewarding of performance may in turn
have undesirable effects on the overall performance.

144

Welbourne, (1998), describes incentive injustice using a situation of procedural

justice in an organization. According to Welbourne, (1998), procedural injustice
is one of the factors that can lead to an inverse relationship between incentives
and performance. Folger and Cropanzano, (1998) describe procedural justice as
a situation that relates to the perceived fairness of the means, rules and/or
procedures used to distribute outcomes, such as assigning jobs, allocating
rewards, using performance evaluation criteria, promoting employees, and
downsizing workforce.

The concern on how employee achievements and

subsequent incentives are determined, defines procedural justice. Tilaye, (2007),

has similarly found out that procedural justice plays a key role in determining
employees' attitude to their management and their commitment to their
organization. Employees who are denied fair treatment by management in the
administration of incentives become frustrated which is likely to force them to
withhold their effort and thus perform poorly. This is confirmed by Linda (not
real name) an accounts clerk at the Ministry of Education and Sports who said:
Madam, we work so hard but our overtime effort is ignored.
Top management is ever in meetings where they share large
allowances but even when we serve them tea and stay
longer than stipulated by our performance agreements nobody
cares. Employees on contract are a lot better than us because
they are given large salaries. As if that was not enough,
at the end of their contracts, they are given gratuity yet they are

145

also put on a saving scheme. This is grossly unfair. (Verbatim Report

September, 2009).

How rewards are determined, may be more important than the actual rewards in
a situation of close interdependence of employees. Incentives may be necessary
to motivate employees to increase their efforts. However, this motivation may
be short-lived when workers come to learn about other employees incentives
and interprete the awarding of such incentives as unfair. Their performance
attitude is negatively affected and hence reduces their effort. An employee who
works hard and sees a lions share of incentives given to someone else because
of his superior position as is the case in public organizations, subsequently
reduces his/her efforts. This observation is in line with the argument advanced
by Folger and Cropanzano, (1998), that procedural justice seems to have more
pervasive effect on outcomes of incentives, in that employees seem less
concerned about incentives when processes used to determine those incentives
are presumed to be unfair in the process of allocating the incentives to the
various employees.

The findings on incentives and employee performance further revealed that

employees who were dissatisfied with the incentives given to them performed
better (46.4%) than employees who were satisfied with the incentives given to
them (6.4%) (see table 4.8). Since the majority of employees were the lower
employees (operatives), despite the dissatisfactory incentives, these lower
146

employees performed better than their counterparts who were satisfied with the
incentives given to them. This can be explained by the rate of supervision at
various levels. Lower employees are more supervised than upper employees,
thus because of this close supervision at the lower level, employees continue
performing relatively better even amidst dissatisfactory incentives.

As employees in public organizations are promoted from lower levels to upper

levels, the rate of supervision on them tends to decline. The low supervision
gives them an opportunity to pursue their individual goals divergent from those
of public organizations. Less time is spent on the common good and hence low
performance amidst satisfactory incentives. This argument is in agreement with
the agency theory which requires that in order for performance to be achieved,
the interests of the principal (the public organization) must be in agreement with
the interests of the agent (the employees). In reality, the interests of the agent
however, will at a certain point in time divert from the interests of the principal.
What can keep the interests of the agent to be in line with those of the principal
all the time is relative close supervision. Thus a reduction in this supervision
will create an opportunity for the agent to pursue self interests than those of the
principal. This is the case for top officials in public organizations who spend
most of their time pursuing individual interests at the expense of public interests.
In their study, Meyer & Allen, (1997), similarly found out that absence of close
supervision in organizations results in diminished performance especially among
the top ranking organizational employees.
147

In conclusion, findings of this study contradict research findings by Werickes

(2002) and Namutebi, (2000), which established that incentives are positively
associated with employee performance in public organizations.

Namutebi,

(2000), too concurs with and Wericke, (2002), when she observes that incentives
induce better performance because when they are equitably administered, they
energize workers to intensify their effort and dedication to work. The two
scholars continue to observe that administration of equitable incentives results in
increased work efficiency and effectiveness over time. When employees are
motivated, they become rigorous in finding out what it takes to do their jobs
well. In this process, new knowledge is discovered.

4.6.3 Relationship between Performance Contract and Employee

Performance
The third hypothesis sought to establish a relationship between performance
contracts and employee performance. Findings confirmed the existence of a
significant positive relationship between performance contracts and employee
performance in public organizations. The study reaffirmed that employees who
considered their performance contracts to be clearly specified, detailed, and
documented and showing job requirements of individuals roles performed better
(46.0%) (see table 4.9) compared to the performance (1.5%) of employees who
considered their performance contracts to be unclearly specified, detailed, and
documented and unclearly showing job requirements of individuals roles. The
observed positive relationship between performance contracts and employee
performance in public organizations is consistent with the findings of Verbeeten
148

(2007), who also established that the definition of clear and measurable goals
through performance contracts is positively associated with both quantity and
quality performance. Similarly, this finding is consistent with the agency theory
which agues that there is a relationship between performance contracts and
employee performance. When workers expected output is clearly spelt out and
is consistent with the rewards, good performance is likely to be realized. In
support of the above Kasolo (not real name) observed that performance contracts
are very good because employees on contracts receive very good pay. Besides at
the end of their contracts, they receive gratuity which, if well invested, can bring
reasonable returns. Okudi (not real name) a Director of Studies at Kankobe
Secondary School (not real name) agreed with Kasolos observations and argued
that although teachers on contracts in his school are facing job insecurity, they
get very good salaries. He continued to note that employees who perform well
always get their contracts renewed. Besides, he observed, contracts are better
than working without any terms and conditions of service at all.

A performance contract is a benchmark upon which employees performance is

assessed. Without clear performance contracts, it becomes very difficult to
appraise employees as performers or non-performers. It is through performance
contracts that employees are made aware of their job responsibilities and
boundaries.

However much as contracts spell out employees job

responsibilities along with the attached rewards, they (contracts) should leave
room for situational flexibility. Situational flexibility creates gap for employees
149

ability to become innovative. Also, in the event of a situation that requires

workers to operate outside the agreed terms, employees operate without fear in
cases where situational flexibility is imbedded in the performance contracts.

Through performance contracts, it becomes possible for public organizations to

align employee interests with public interests. In order to ensure that employee
interests are in agreement with public interests, performance contracts can be
aligned with public expectations and the contracts can be manipulated to act as
yardsticks for screening employee performance. With this kind of yardstick,
employee performance is likely to improve. This observation is in line with the
agency theory (Baiman, 1990) which assumes that in order for organizations to
achieve high performance, the principals interests should be in agreement with
the agents interests (the employee). Thus in the context of a public sector, a
performance contract is a formal agreement between the public organization and
an employee specifying the terms and responsibilities of each party and how
contingencies can be handled hence aligning the principals interests with those
of the agent.

4.6.4 Relationship between Organization Resources and Employee

Performance
The fourth hypothesis sought to establish whether there is a relationship between
organization resources and employee performance in public organizations.
Findings revealed that there was a significant positive relationship between
organizational resources and employee performance in public organizations.
150

Employees who had adequate organization resources in the form of knowledge,

skills and information technology performed better (30%) (see table 4.10) than
employees who had inadequate organization resources (3.1%). This is in line
with the Resource Based view (RBV) (Barney, 1991) which advocates that there
is a relationship between the organizations tangible resources in the form of
knowledge, skills and information technology and employee performance. As
employees knowledge and skills increase in the handling of a particular task,
their operational efficiency and effectiveness also improves (Tilaye, 2007;
Bartel, 1994; and Eisenberg et al., 1990). Information technology is another
aspect that enables employees to acquire the information they need to do their
jobs well and at the same time increase their ability to operate at a much faster
and more efficient rate as advocated by a number of scholars (Santhanam, &
Hartono, 2003; Bharadwaj, 2000; Reich & Benbasat, 2000). In the presence of
information technology, skills acquisition and knowledge development are made
easier because workers are able to search for the information they need and
manipulate it to suit their job requirements. Information technology also enables
employees to verify information, transform it into a usable form and make it
available to interested authentic users.

Organization resources (knowledge, skills and information technology) are

confirmed by a good number of scholars to be highly valuable, rare to possess,
difficult to imitate, and non-substitutable (Eisenberger, et al. 1990; Bartel, 1994;
Reich & Benbasat, (2000); Priem & Butlar, 2001). However, in Uganda, these
151

invaluable tangible resources are only accessed by the privileged few.

For

example, Ida (not real name) a secretary at Kampala City Council reported that
lower cadre employees are told to find their levels when it comes to their pleas to
go for further education/training. Computers are usually down and it takes ages
to have them repaired yet executives expect impeccable performance. As if that
is not enough, the internet is only accessed by top executives, and at most, some
supervisors. In her support, Kyomuhangi (not real name) an administrative
assistant said that sponsorship for any course is reserved for top executives and
some supervisors. She reported that in most public organizations where she has
friends, only top administrators and supervisors have access to funding for
training and development purposes. Workers in the lowest cadre can not secure
sponsorship from their organizations for further training/education. Mutale, too,
an accounts officer at Nakawa City Council Division offices reported that apart
from the top executive at his Division offices; all other workers do not have
access to the Training and Development Fund let alone the internet. Even
some computers have long been out of use.

On the contrary, Mutebi, (not real name) a Senior IT manager, observed that
there is a Government Training and Development Fund meant to benefit all
employees and he was twice a beneficiary of the same facility in less than a year.
Confirming Mutebis observation, Kyalimpa, (not real name), a senior
accountant at the Ministry of Education and Sports said and I quote:

152

Yah, we definitely have a training vote. All employees are free to go

abroad and study. For example I only returned from Holland the other
week after a three months course in Computerized Accounting. We also
have a good number of our employees on Masters Degrees in various
fields at Makerere University and at the Uganda Management Institute.
The internet service may be slow but they are available here. Our offices
are automated and whenever the machines are down they are repaired in
good time. (Verbatim Report September, 2009).
According to Sebi, (not real name) who is a supervisor at Kampala City Council
in the Law Enforcement Department, all workers are free to apply for short
training courses.

Kampala City Council has a training vote that caters for

workers training needs. It is just a matter of getting a course of ones choice,

once admitted, the individual is sponsored without any conditions attached.

In short, it is only employees in managerial and supervisor capacity in the two

public organizations that seemed to access and thus get empowered with the so
much needed organization resources. When asked why, management gave an
excuse of the high costs involved in maintaining IT services that has forced them
to offer selective access to organization resources by employees. They also
argued that some employees abuse the internet services by using them for
personal benefit instead of using them for their designated purposes. Besides,
whenever they invest in lower cadre employees, they do not stay. Once workers
become highly skilled, they leave for greener pastures, a Senior Administrator at
153

the Ministry of Education and Sports observed.

The outcome of selective

treatment when it comes to availability of organization resources yields

psychological

insecurity,

frustration,

feeling

of

worthlessness,

job

dissatisfaction among employees and thus poor performance.

In short, it should be emphasized that organization resources form a basis for a
given organizations superior performance and sustainability. In light of the
importance attached to knowledge, skills and information technology, all
employees in public organizations should be enabled to access the available
Government Development Fund in order to help them acquire up-to-date
knowledge and skills that enable them to improve service delivery. Information
technology should also be accessed by all public employee workers. Having
employees who are well equipped with sufficient knowledge and skills, in
addition to having efficient information technology capability in place, enable a
given undertaking superior performance over its competitors. Thus developing
the know that; know why; know what; know how and know when by
employees is part of the answer to the problem of persistent poor performance in
public organizations.

4.6.5 The Relationship between Performance Measurement and Employee

Performance
The fifth hypothesis sought to examine whether there is a relationship between
performance measurement and employee performance in public organizations in
Uganda.

Findings confirmed that a significant positive relationship exists

between performance management measurement and employee performance in

154

public

organizations.

The

positive

relationship

between

performance

measurement and employee performance exhibited in the study implies that clear
performance measurements in the form of the level of customer (public)
satisfaction, the quality of services offered, quantity of services provided, and
operating efficiency enabled employees to perform better (21.3%) (table 4.12)
compared with employees whose performance measurement was not clear
(4.4%). This is consistent with the views held by Kaplan and Norton, (1996),
Kaplan (2001), who recommend that in developing a balanced scorecard,
managers should gather information from perspectives that indicate the general
view of employee performance; the customers perspective and satisfaction of
public needs. In developing a balanced scorecard, public organizations must
answer the following questions: How does the public see us? What must we
excel in? What can we learn from the existing performance? Can we continue to
increase the quantity of service and or improve (quality) its value or is it
necessary to create new services? Thus in measuring performance, the measures
should comprehensively cover those four perspectives in order to get a broader
picture of an organizations performance.

Performance measurement would have provided feed back information and an

insight to the public organizations on how they are performing. This can be
achieved through an assessment of public satisfaction annual ratings determined
through a public survey and public opinion polls on the quality of services
provided by public organizations. The type of measurement applied in measuring
155

employee performance should hinge on the type of performance indicators to be

measured (Lambert & Salterio, 2000; Macleod, 2001). In order for performance
measures to be effective, public organizations should set performance standards
for the employees upon which performance measurement becomes objective.
These performance standards are management approved expressions of the
performance threshold(s), requirement(s), expectation(s) that employees must
meet in order to be excellent. Each critical employees activity must have an
equivalent standard established. In order for employees and work units to fully
understand the standards of performance on their activities, Talbot, (2001)
recommends that management should articulate its performance standards, the
dimensions that embody these standards and how they can be achieved. This is
also consistent with Dixon and Ross, (1999); Amaratunga, (2002) who noted
that in order for performance measurement to be meaningful, performance
standards should be well established and used as a yardstick to measure results.

In order to ensure clarity and acceptability of performance measures within

public organizations, performance measurement systems should be discussed
with the employees who work with them in order to create consensus among the
management and the employees. Performance measurement discussions reduce
the risk of performance measures being perceived as being unfair, and
unattainable. Performance measurement also acts as a basis for monitoring and
evaluating employee performance in that it is a source of performance feedback
on the goals and objectives of an organization. Since monitoring aims at finding
156

out the performance trend on the goals and objectives of an organization,

evaluation aims at assessing whether the goals and objectives are being
achieved. Performance measurement is therefore a strong tool for providing
information as to whether the organizations goals objectives have been achieved
or not. In case of diversion from organizational goals and objectives,
performance measurement provides answers. To quote a Librarian at Rubaga
City Council Division office:
I am personally not satisfied with the performance measurement
criteria used here. First of all the tool is so old and we are
appraised once a year. Afterwards we sit with the supervisor
and agree on certain issues but I would be more satisfied if
certain aspects were to be included and others deleted.
Also I would appreciate it if we were to be appraised frequently
because there are so many good things that workers do and yet
they are never considered during the annual appraisal. (Verbatim
Report, September, 2009).

Doctor Kityo, (not real name) a Medical Officer at Kawempe City Council
Health Unit also said he was not happy with the appraisal tool used to measure
employee performance at his workplace. He noted that the tool leaves out critical
incidents and concentrates on past events. He strongly urged that both the tool
and the method of employee measurement in public organizations should be
modernized to include an area that captures critical incidents and that
157

measurement should be more frequent. Kabateraine, (not real name) a Senior

Nursing Officer at the same Medical Unit said too that her only concern was that
when she appraises her subordinates and reports knowledge and skill gaps,
nothing is done to improve the situation. Schmitz & Platts, (2004), similarly
argue that every organization needs a clear and cohesive performance
measurement framework that is understood by all levels of employees in an
organization.

The performance measurement should further support the

organizations objectives and the collection of results. Schmitz & Platts, (2004)
continue to note that it is only through clear performance measurement
framework that employees can deliver superior performance. Thus the
involvement of employees in the development of performance indicators and
standards included in the performance measurement system may be an excellent
of clarifying and capturing employee in public employees.

Verbeeten, (2007) argues that performance measure results should be interpreted

as guidance, but not answers. The appropriate initial managerial response to
performance measures should be a discussion on the most feasible course of
action(s). After getting answers to the questions addressed to both management
and the employees, the next step is to integrate the various alternative answers so
as to come up with agreed course of action among the employees and the
organization.

158

The study findings finally confirmed a 3-way highest-order interaction among

performance management practices. The most critical interaction was among
performance measurement, government policy and employee performance.
Aligning the government policy with the performance measurement is likely to
influence employee performance in public organizations. It should be noted that
performance measurement aims at gathering performance information from
important perspectives that may indicate a general view of the organizations
performance. Public organizations are able to establish if they are satisfying
public needs. They are also able to determine the answer to the question: How
does the public see us?

Performance measurement enables public organisations to assess their critical

internal operations that enable them to meet public needs by establishing their
competitive edge. Performance measurement enables public organizations to
learn from their mistakes. Thus performance measurement helps public
organizations to get information regarding the broader picture of an
organizations performance.

It is incumbent upon public organization managers and policy makers to ensure

that performance measurement is modernized and rendered useful.

Public

organizations do not act in isolation like the private ones. Their actions (goals
and objectives) and operations are influenced by the government through
government policies. However, government policies can be ineffective if the true
159

picture of a public organizations performance is unknown. Thus armed with

the performance measurement feedback, the government can design wellfocused policies that can effectively increase employee performance in public
organizations.

4.7 Government Policy

All activities including the implementation and management of performance
management practices in public organizations are regulated by government
policies.

The study adopted government policy as an intervening variable

because of its regulatory role in the implementation and management of

performance management practices in public organizations (see figure 1 page
63). The crucial policies spelt out in this study were: the personnel policy,
training and development policy and the reward policy (see table 4.6).

The highest aspect of government policy was the personnel policy that deals
with staff security (security of person and his/her job) (see table 4.6). Ideally,
when employees are secure in their places of work, they become psychologically
stable, loyal to their organizations and commit themselves to perform optimally.
This observation is in line with the assumption made by the Agency theory
(Bainman, 1990) and supported by other scholars (Bonner & Sprinkle, 2002;
Grinblatt & Sheridan, 2002; Yadong, 2002; Kobia & Muhammed, 2006;
Katorobo, 2011) as discussed earlier.

160

The study ranked the government training and development policy as second in
importance (see table 4.6). The way government agencies administer employee
training and development greatly affects workers performance.

Knowledge

and skills play a vital role in the way employees perform. This is in line with the
advocacy of the Resource Based View (Barney 1991) and supported by a
number of other scholars as discussed earlier (Alavi & Leidner, 2001;
Eisenberger & Santos, 2002; Argote & Ingram, 2000; Bharadwaj, 2000).
Therefore when the process of training and development is equitably handled,
both the public and public organizations stand to benefit through skilled and
knowledgeable workers production of quality output in the right quantity. On
the other hand, when the same process is selectively enjoyed by a few workers
performance is likely to decline.

The government reward policy was ranked third (see table 4.6). When direct
rewards such as basic pay, wages, salary increments, allowances, bonuses,
commissions, and gratuity are equitably distributed among employees,
performance is likely to be increased. The view is supported by the Agent
theory (Bainman, 1990), which is in line with findings by other scholars (Adams
& Hicks, 2000; Fama & French, 2000; Barron & Glen, 2003; Barker, 2004).

The government policies singled out by the study were assumed to be the most
important in enhancing employee performance in public organizations in
Uganda.

Due to the vital regulatory role government policies play in the

161

implementation and management of performance management practices in the

public sector, the study had government policy as an intervening variable.

4.8 Chapter Summary

The chapter presented the findings of the study along with their and discussion.
The following chapter presents the study summary, conclusions and the
recommendations based on the findings.

162

CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
The study sought to establish whether there is a relationship between
performance management practices and employee performance in public
organizations in Uganda using Kampala City Council (the largest Local
Government unit) and the Ministry of Education and Sports, (the biggest Central
Government Ministry).

The researcher was motivated to conduct this study

because of the persistent poor employee performance in public organizations

witnessed in the country, which according to some scholars was caused by the
1966/67 crisis and the political turmoil of the 70s up to early 80s (Apuki, 2007;
Mitala, 2006; Yahaya, 1999; Langseth, & Mugaju, 1996). Although government
introduced civil service reforms to help and improve employee performance in
public organizations, the situation has persisted. Thus the need for a study to
investigate whether there is a relationship between selected performance
management practices (decision rights, incentives, performance contract,
organization

resources

and

performance

measurement)

and

employee

performance in the public sector. This chapter presents a summary of the study
findings, conclusion and recommendations.

5.1 Summary of the Study Findings

The study established that there was a significant mean difference (p<0.05)
between Kampala City Council and the Ministry of Education and Sports in
163

terms of performance (see table 4.3). On average, the Ministry of Education and
Sports had higher mean values of performance management practices and
employee performance compared to Kampala City Council. However, the mean
difference between the Ministry of Education and Sports and Kampala City
Council on government policy was just a random difference. This is because the
two institutions are public organizations and government policies are evenly
applied across the public sector.

The results of the principal component analysis revealed that the selected
performance management practices explained 54% of employee performance in
public organizations.

This meant that 46% of the variation in employee

performance is explained by other factors. Tilaye (2007) proposed job autonomy

and psychological contract (organizational support) as possible factors that could
significantly affect employee performance and this was supported by Durham, et
al., (1994) study findings.

Findings of first hypothesis regarding the relationship between decision rights

and employee performance revealed that there was a significant positive
relationship between decision rights and employee performance (p<0.05) (see
table 4.7) in public organizations in Uganda. This correlated positively with the
qualitative findings which revealed that employees who were not involved in the
decision making processes (not involved) (38% see appendix VIII - 4.13)
exhibited poor performance (1.4%) (table 4.7) while their counterparts who were
164

involved in the decision making processes (involved), (24% see appendix VIII 4.13) revealed higher performance results (27.1%).

This confirmed that as

employees are involved in the decision making processes, their performance

increases.

Findings of this study were in line with the cited studies which indicated that
involvement of employees in the decision making processes on issues that
concern them and their jobs affects employee performance (Williamson, 2008;
Helmut, 2002). The objective results were in line with the goal setting theory
(Locke and Latham, 2002), which assumes that decision rights increase
employee performance. Some scholars however contradicted these findings
when they indicated that under difficult and sensitive situations, decision making
should be left to management (Ghosh, 2009; Juliette and Jeff, 2005; Aghion &
Tirole, 1997). However, since there are more gains than losses when employees
participate in the decision making processes, public organizations should involve
their workers in decision making especially when it comes to issues that concern
employees and their jobs.

Results of the second hypothesis regarding a relationship between incentives and

employee performance revealed that there was a significant relationship between
incentives and employee performance (p>0.05) (see table 4.8). However, since
the Somersd confirmatory test revealed that the relationship was insignificant,
(Somersd = .018, sig = .665} (see table 4.8) it meant that there is an inverse
165

relationship between incentives and employee performance in public

organizations in Uganda. The qualitative results agreed with the chi-square test
results when they indicated that employees who were dissatisfied with the
incentives (94% see appendix VIII 4.14) exhibited higher performance (46.4%)
(see table 4.8) while their counterparts who were satisfied with the incentives
(6%) exhibited poor performance (6.4% see table 4.8).

Verbeeten (2007) partly supported this finding while the agency theory advanced
by Baiman, (1990), disagrees with the study findings because it assumes that
incentives increase employees performance. Werihke, (2002); Namutebi (2000)
too disagree with the study findings when they contend that lack of incentives is
the cause of poor employee performance in public organizations in Uganda.
Most reviewed studies have indicated that incentives increase employee
performance (Baker, 2004; Harold, 2003; Adams and Hicks, 2000) and therefore
departing from this study findings. So, on the basis of majority of empirical
studies findings, meaningful incentives have a relationship with employee
performance in public organizations.

Results of the third hypothesis regarding a relationship between performance

contracts and employee performance revealed that there is a significant positive
relationship between performance contracts and employee performance (p<.05)
(see table 4.9) in public organizations in Uganda. This correlates with the
qualitative findings of the study which further revealed that respondents who
166

appreciated performance contracts (97%) (see appendix VIII 4.15) had higher
performance (46.0% see table 4.9) compared to their counterparts who did not
appreciate them (3%) and had low performance (1.5%).

Findings of the study agree with the agency theory Baiman, (1990), which
assumes that performance contracts improve employee performance. Almost all
the reviewed empirical studies confirmed that there is a positive relationship
between performance contracts and employee performance (Poppo and Zenger
2002; Yadong, 2002; Bernheim and Whinston, (1998). Performance contracts
act as clear performance frame-work within which employees have to perform
and therefore get assessed. Therefore, when performance contracts are clearly
drawn and are matched with appropriate incentives, employee performance is
likely to increase.

Results of the fourth hypothesis on the relationship between organization

resources (knowledge, skills and information technology) and employee
performance in public organizations in Uganda revealed that there was a
significant positive

relationship (p<.05) (see table 4.10).

The qualitative

findings were in support of the chi-square results when they revealed that
participants who did not have adequate resources let alone ability to access them
(72%) see appendix VIII - 4.16) were performing poorly (30%) (see table 4.10)
while their counterparts with adequate resources and ability to access more
resources (15% see appendix VIII - 4.16) had better performance (30%).
167

Cited empirical findings in this study confirmed that organization resources

increase workers efficiency and effectiveness when performing their jobs
(Amoako, 2003; Genevive, et. al., 2001; Bharadwaj, 2000; Martinsons, 2000;
Mahmood & Mann, 2000). Barney, (1991) in his Resource Based View agrees
with the findings when he asserts that organization capabilities (knowledge,
skills

and

information

technology)

increase

employee

performance.

Specifically, while knowledge and skills empower workers with the ability to
handle the organizations know how, know when and how; up-to-date
information technology enables them to search for information, network with
others and operate faster with high efficiency. Therefore as employees access
to knowledge and skills development and up-to-date information technology
improves, workers performance increases too.

Findings of the fifth hypothesis on the relationship between performance

measurement and employee performance in public organizations in Uganda
revealed that performance measurement had a significant positive relationship
(p<.05) and (see table 4.11).

Similarly, qualitative findings on performance

measurement revealed that participants who were satisfied with the performance
measurement (12%), (see appendix VIII - 4.17), their performance was 21.3%
(see table 4.11) while that of their counterparts who were not satisfied with the
performance measurement (41%), their performance was 4.4%.

Thus if

performance measurement is satisfactory, with regard to what it intends to

measure, employee performance increases.
168

Performance

measurement

contributes

to

improvement

in

employees

performance when the performance measurement feedback enables workers to

understand and learn improved new techniques of doing their jobs better. This is
in agreement with the view held by de Waal, (2007); Kaplan (2001) to the effect
that continuous performance measurement with immediate feedback improves
employees performance. However, the tool used to measure performance must
be clear about the performance criteria and it should spell out the critical success
factors.

Cited empirical studies (Mausolff, 2004; Christopher, et. al., 2003;

Propper & Wilson, 2003; Talbot, 2001; Luft & Shields, 2001) all confirmed that
it is through employee evaluation that performance gaps are identified and
communicated to the concerned employees so that corrective measures are
suggested for future improvements. Therefore the advocacy by de Waal, (2007)
and Kaplan, (2001) that organizations should have proper performance
measurement tools and systems; is valid and if employee performance is
continuously properly measured, employee performance is likely to increase.

The study finally established that there was a 3-way order interaction effect
among performance management performance practices, government policy and
employee performance.

However, the most critical interaction was among

performance measurement, government policy and employee performance.

Therefore, employee performance in public organizations in Uganda would
greatly improve if workers performance is constantly monitored and measured
with immediate feedback given to workers. The suggested remedy for
169

improvement should be implemented in line with government policy if high

employee performance is to be realized and sustained in public organizations in
the country.

Finally the study revealed too that that there is a mean difference between
Kampala City Council and the Ministry of Education and Sports in terms of
performance management practices and employee performance (see table 4.2).
The study too proved statistically that the Ministry of Education and Sports
employees performed better than their counterparts at Kampala City Council
(see table 4.3).

5.2 Conclusions
The study findings revealed that the selected performance management practices
(decision rights, performance contracts, organization resources and performance
measurement) had a significant positive relationship with employee performance
in public organizations in Uganda. Findings also established that performance
measurement, government policy and employee performance had the highest
order interactive effect (most critical relationship) among performance
management practices. It is only the incentives that had an inverse relationship
with employee performance in the public sector. However, despite the existence
of a positive relationship between decision rights and employee performance,
decision making is not decentralized to include all employees in public
organizations. Decisions are mainly made by managers and thus their inability to
170

enhance employee performance in the public sector in Uganda. Secondly,

incentives given to employees in the public sector are unrealistic. Therefore, they
are not able to induce workers to perform optimally. Thirdly, performance
contracts are not matched with appropriate rewards in the public sector much as
they are related to employee performance. Therefore they are not attractive to
help enhance workers to perform well. Further more, despite the importance of
organization resources (knowledge, skills and information technology) as seen in
the study, they are not adequate in public service and are only accessed by the
privileged few. In addition, performance measurement is not well managed
since it is conducted once a year using an out-dated tool yet it should be
routinely conducted with immediate knowledge of results given to workers if it
is to contribute to the desired employee performance in public service.

5.3 Recommendations
On the basis of the findings, it was recommended that public organization
managers must ensure that they modernize the performance measurement tool
they use in evaluating employee performance so the tool clearly spells the
performance indicators along wit the critical success factors. Managers and
supervisors must also ensure that performance in the public sector is
continuously monitored and evaluated with immediate feedback given to the
concerned workers. The performance gaps must be addressed in line with
government policy.

171

Secondly, managers in public organizations should ensure the incentive systems

are modernized by making the rewards meaningful so as to induce employee
performance. In addition, managers must ensure that there is procedural justice
in the administration of incentives throughout public service. This implies that
all public employees should be rewarded according to their output. Otherwise, if
employees detect any unfairness in the way rewards are distributed it may
demoralize them and thus force them to withhold effort.

Thirdly, public sector managers should ensure that decisions are decentralized in
order to allow full employee participation in the decision making processes by
all workers regardless of their cadre. This will result in increased employee
commitment to their jobs, responsibility and accountability for actions taken.
Also management

in public organizations should ensure that organization

resources (knowledge, skills and information technology) acquisition and

development are available and accessed by all their employees in order to ensure
sustained high performance while guarding against obsolesce.

Finally, public sector managers and policy makers should ensure that
performance contracts are clearly spelt out along with commensurate rewards in
order to attract employees to perform as expected.

172

5.4 Areas for Further Research

Since the study was carried out in the largest Local Government unit (Kampala
City Council) and the biggest Central Government organization (Ministry of
Education and Sports) only, a similar study should be conducted in parastatal
organizations in order to establish the relationship between performance
management practices employee performance in semi-government organizations.

Secondly, the current incentives offered in public organizations do not seem to

enhance employee performance. As a matter of urgency, a study should be
carried out to identify the ideal incentives that befit public servants in the
country.

Thirdly, there is also urgent need to mount a study that will assess the influence
of government policy on employee performance in public organizations in
Uganda.

Findings may help to regulate government influence on the

implementation and management of the best management practices in public

organizations in Uganda.

The study indicated that the proposed performance managment practices

(decision rights, incentives, performance contracts, organization resources and
performance measurement) explain only 54% of employee performance. A
research should be carried out to investigate the contribution of job autonomy

173

and psychological contract to employee performance in public organizations to

prove the argument advanced by Tilaye, (2007) and Durham, et al., (1994).

5.5 Policy Implications

Administrators, managers, supervisors and policy makers should ensure that the
performance measurement tool used in public organizations in Uganda spells out
performance indicators and critical success factors clearly so as to make it
effective. Performance measurement should be a continuous process instead of
conducting annually like is the case currently.

Secondly, government policy makers should ensure that realistic and meaningful
incentives are instituted throughout the public sector so as to boost employee
morale. Also managers in the public sector must ensure that incentives are
tagged to performance so as to encourage employees to sustain high performance
in public organizations.

Thirdly, managers in Local Government units should ensure proper

implementation, and management of performance management practice since the
study findings indicated that Government Ministries are performing better than
Local Government units.

174

5.6 Contribution to knowledge

The study has established that there is an interactive association among
performance measurement, government policy and employee performance in
public organizations. If performance measurement findings and future action is
guided by government policy employee performance in public organizations is
likely to increase significantly.

Previous studies have concentrated on a

relationship between two isolated performance management practices unlike this

study which sought to establish a relationship among five performance practices;
(decision rights, incentives, performance contracts, organization resources and
performance measurement). Also, unlike the private sector, the public sector is
highly influenced by government policies thus there has not been any
investigation on the optimal interaction between performance management
practices and government policy that can maximize employee performance in
public organizations. This study has made an attempt to investigate and establish
an optimal interaction between performance management practices (performance
measurement) and government policy that can maximize employee performance
in public organizations.

In the long run, the agency theory has a deficiency. The agency theory talks of
an agreement between the principals interests and the agents interests in order
for performance to be achieved. However, the theory failed to observe that in the
long run, the agents interests tend to deviate from the interests of the principal.
The deviation of the agents interests from the interests of the principal causes a
175

performance mismatch. The performance mismatch is a performance situation

in which the agents performance falls short of the principals performance
expectations. This is validated by poor performance of public organizations in
Uganda where public officials (agents) pursue their own interests at the expense
of public (the principal) interests (Namutebi, 2000; Weriche 2002; Mitala, 2006;
Apuki 2011). Thus this study has introduced relative supervision in the agency
theory in order to ensure that there is a continuous agreement between the
agents interests with those of the principal.

This relative supervision of

government executives is intended to ensure that there is no performance

mismatch.

The researcher assumes that other factors that may lead to a

performance mismatch are constant thus relative supervision will ensure

continuous congruence of interests between the agent and the principal. Thus the
new agency theory is composed of three components: the principals interests;
the agents interests; and relative supervision.

The study has established that there is a significant positive relationship between
performance management practices and employee performance. Findings of the
study have also indicated that a high order interactive effect exists among the
performance management practices,

government policy and employee

performance in public organizations. The last chapter presents the summary of

the findings, the conclusion the recommendations.

176

5.7 Chapter Summary

The study can safely be generalized to public organizations in Uganda because
the study participants were drawn from two public organizations each
representing the largest type of government institution. Kampala City Council is
the largest Local Government unit while the Ministry of Education and Sports is
the biggest Central Government Ministry.

177

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196

APPENDIX I
STRATUM SAMPLE SIZE CALCULATIONS FOR KAMPALA CITY
COUNCIL
SERIAL NUMBER

POPULATION

13

25

78

10

2456

331

Total

2572

346

Sample Size formula and calculation:

n

N
1 + N (e)2

2572
1 + 2572 (.05) 2

2572

1 + 2572 (.0025)
n

2572

1 + 6.43
n

SAMPLE SIZE

2572
7.43

346

197

Therefore the sample size is 346

Stratified random sampling formula and calculations for Kampala City Council:
r

c xs
p

1.

13 x 346

2572

2.

25 x 346

2572

2572

3.

78 x 346

4.

10

2456 x 346

26988
2572

2572
r

8650
2572

2572
r

4498

10380
2572

330

198

APPENDIX II
STRATUM SAMPLE SIZE CALCULATIONS FOR MINISTRY OF
EDUCATION AND SPORTS
SERIAL NUMBER

POPULATION

SAMPLE
SIZE

n =

19

11

11

262

149

Total

300

171

N
1 + N (e) 2

n=

300
1 + 300 (.05) 2

N =

300
1.75
n =

171

Therefore the sample size is 171

Stratum Sample sizes calculations:
r

cxs
p

1.

8 x 171

300

2.

19 x 171

1368
300

300

3249
300

199

3.

11

11 x 171

300

4.

300

262 x 171

300
=

1881

149.34
300

149

200

APPENDIX III
QUESTIONNAIRE FOR KAMPALA CITY COUNCIL (KCC) AND THE
MINISTRY OF EDUCATION AND SPORTS (MoES) MIDDLE
MANAGERS, SUPERVISORS AND OPERATIVES
This questionnaire seeks to solicit information that will help to establish the role
of performance management practices in the enhancement of employee
performance in public organizations in Uganda with specific reference to
Kampala City Council and the Ministry of Education and Sports.
The information you provide will be treated with utmost confidentiality and will
be used for academic purposes only.
Your cooperation will be highly appreciated.

SECTION A: BACKGROUND INFORMATION

1. Tick the right organization you belong to:
(a) Kampala City Council
(b) Ministry of Education and Sports
2. Tick the right job category you belong to:
Manager
Supervisor
Operative
3. Sex
Male

Female

4. Age bracket
25 years and
below

26-30
years
1

31-35
years
2

36-40
years
3

201

41-45
years
4

46 and
above
5

4. Highest education level attained

Certificate

Diploma Bachelors
Degree

Masters
Degree

PhD

5. Number of years of service in the organization

Less than 2
years

3-5 yrs

6-10 yrs 11-15

yrs
2

16-20 yrs

Over 20
years

SECTION B: DECISION RIGHTS

To what extent do you agree with the following statements? (1 = strongly
disagree, 5 = strongly agree)
Strongly disagree Disagree Neutral
1

Agree
3

Strongly agree
4

1 Decisions made in this organization are communicated to

1 2

1 2

1 2

4 I feel happy when I am involved in decision making.

1 2

5 Decisions are taken by the top few in this organization.

1 2

6 I belong to various workers committees.

1 2

the concerned employees.

2 Employees are consulted before making decisions on
issues affecting them.
3 Employees are involved in decision making in this
organization.

202

Feel free to make additional comments not cited above on decision right in the
space provided below:
..................................................................................................................................
...........................................................................................................................
SECTION C: INCENTIVES
Indicate your level of satisfaction with the rewards your organization gives you
by ticking the appropriate box: (1 = very dissatisfied, 5 = very satisfied)

Very dissatisfied

Less
satisfied

Neutral

Satisfied

Very satisfied

1 I am satisfied with all my monetary compensation.

1

2 My total compensation is in line with my

performance.

3 I am satisfied with the housing facilities the

organization gives me

4 I am satisfied with the medical facilities extended

to me and my family

5 I am satisfied with the allowances the organization

gives me

6 I am satisfied with the transport allowance given to

1
me

7 I am satisfied with the employee saving scheme the

organization has put in place.

8 I am satisfied with the total compensation package

203

given to me

Feel free to make additional comments not cited above on incentives in the
space provided below:
..................................................................................................................................

SECTION D: PERFORMANCE CONTRACTS

To be answered by all employees in the organization
To what extent do you agree with the following statements? (1 = strongly
disagree, 5 = strongly agree)?
Strongly disagree Disagrees
1

Neutral

Agree Strongly agree

3

1 My job requirements are spelt out in my job

1
contract

2 My contract is written on paper and

communicated internally and externally

3 Individual roles in the organization are

unambiguously related to the mission of my 1
organization

4 Individual roles in the organization have

been documented very specifically and
detailed

5 The sum of job requirements to be achieved

1
provides a complete picture of the results
that should be achieved by my organization

6 My performance contract enables me to

perform better

7 I am happy with my performance contract

204

Feel free to make additional comments not cited above on performance contracts
in your organization, in the spaces provided below:
..................................................................................................................................
..........................................................................................................................
SECTION E: ORGANIZATION RESOURCES
(Tangible resources = knowledge, skills, information and information
technology - Resource Based View)
Rate the adequacy of resources the organization is endowed with: (1 = very
inadequate, 5 = very adequate)
Very
inadequate

Inadequate

Neutral

adequate

Very adequate

1 I have adequate knowledge to enable

me do my job well

2 I have adequate skills required to do my

job

3 I am enabled to acquire more

knowledge and skills by my
organization whenever necessary

4 The organization has efficient

information technology

5 The available information technology

enables me to perform better

6 Information is easily accessed by every

authentic user in the organization

7 I am always facilitated with the

relevant information to enable me to do
my work

205

Feel free to make additional comments not cited above on resources in the space
provided below:
..................................................................................................................................
..........................................................................................................................
SECTION F: PERFORMANCE MEASUREMENT
To what extent do you agree with the following statements about the
performance measures of your organization?
(1= strongly disagree, 5 = strongly agree)
Strongly
disagree

Do not
agrees
1

Neutral

Agree Strongly agree

My organization has performance measurements

that indicate the quantity of services provided.

3 4 5

The performance measures my organization uses

indicate the operating efficiency.

3 4 5

The performance measurement the organization

uses indicate the customer satisfaction.

3 4 5

My organization has performance measures that

indicate the service quality.

3 4 5

My organization has performance measures that

indicate the outcome effects.

3 4 5

We are all satisfied with the performance measures. 1

3 4 5

Training is available to help staff measure

performance.

Personnel and financial resources are assigned to

collect performance measurement data.

3 4 5

3 4 5

Feel free to make additional comments not cited above on performance

measurement in the space provided below:
..............................................................................................................................
..............................................................................................................................
206

SECTION G: GOVERNMENT POLICY

State whether you agree with the following statements concerning Government
policy influence on your performance by indicating whether you agree with the
statements below: (1 = strongly disagree, 5 = strongly agree)
Strongly
disagree

Disagree

Neutral

Agree Strongly agree

Government recruitment policy influences

workers performance in my organization.

Government direct reward policy

(governing basic pay, wages, allowances,
bonuses, commissions and salary
increments) influences level of employee
commitment in this organization.

Government indirect reward policy

(governing transport, housing, health
services, insurance, saving scheme,
retirement benefits) influences employee
service delivery.

Government employee development policy

influences the quality of services enjoyed by 1
our customers.

The Government promotion policy

influences the timeliness of work produced
by workers in this organization.

Government transfer policy influences the

morale enjoyed by employees in my
organization.

Government training policy influences

work Excellency exhibited by m
organization.

207

Government employee safety policy

enhances employee satisfaction.

Government procurement policy influences

the nature of information technology in my
organization.

10 Government Administrative policies and

guidelines influence the timeliness of
services our customers enjoy.

Feel free to make additional comments not cited above on performance in the
space provided below:
..............................................................................................................................
SECTION H: PERFORMANCE
State whether you agree with the following statements. (1 = strongly disagree,
5 = strongly agree)
Strongly disagree I disagree
1

Neutral

Agree
3

Strongly agree
4

3 4 5

I am able to produce the quantity of work on time.

3 4 5

I am able to produce the quantity of work as set by my

Supervisor.

3 4 5

4 I am able to produce quality work as specified by our

customers.

3 4 5

5 I am able to produce quality work in time.

3 4 5

6 I am able to produce quality work as s as specified in

the organization goals

3 4 5

I am able to produce the quantity of work as specified

by my organization.

208

7 I am able to produce accurate work as specified by my

Supervisor.

3 4 5

8 I am able to produce accurate work as expected by my

organization.

3 4 5

9 I am able to produce accurate work that matches

customer requests.

3 4 5

10 We regularly come up with innovations that match

customer needs.

3 4 5

11 My Section members regularly come up with

innovations that contribute to the organizations work
excellence.

3 4 5

12 Our supervisors are satisfied with the innovations we

usually come up with.

3 4 5

13 My Section staff always strives for work excellence.

3 4 5

14 We have acquired work excellence in this

organization.

3 4 5

15 Our customers are satisfied with this organizations

work excellence.

3 4 5

16 We have attained work efficiency in my unit operations.

3 4 5

17 Our customers are satisfied with our work efficiency.

3 4 5

18 All my Section members strive for work efficiency.

3 4 5

19 Supervisors in this organization try very hard to boost

their subordinates morale.

3 4 5

20 Employee morale ranks highest on our Administrations

agenda.

3 4 5

21 Employees in this organization have high morale.

3 4 5

Feel free to make additional comments not cited above on performance in the
space provided below:

209

APPENDIX IV
INTERVIEW GUIDE FOR TOP MANAGERS

1. To what extent do you involve your subordinates in decision making?

2. Do you feel satisfied with the incentives you give employees?
3. To what extent do terms of employment help to enhance your
subordinates performance?
4. How adequate is your subordinates knowledge and skills in light of their
job requirements?
5. How easy is it for your subordinates to access necessary information
pertaining to their performance?
6. How appropriate is your organizations performance measurement
criteria?

210

APPENDIX V
INTERVIEW GUIDE FOR SUPERVISORS
1. To what extent do you involve your subordinates in decision making?
2. Do you feel satisfied with the incentives the organization gives workers?
3. To what extent do terms of employment help to enhance workers
performance?
4. How adequate is workers knowledge and skills in light of their job
requirements?
5. How easy is it for the workers to access necessary information pertaining to
their performance?
6. How appropriate is your organizations performance measurement criteria?

211

APPENDIX VI
INTERVIEW GUIDE FOR OPERATIVES
1. To what extent are you involved in decisions made in your
Section/department/Directorate?
2. Do you feel satisfied with the incentives given to you by your organization?
3. To what extent do terms of employment help to enhance your performance?
4. How adequate is your knowledge and skills in light of your job
requirements?
5. How easy is it for you to access the necessary information pertaining to your
performance?
6. How appropriate is your organizations performance measurement criteria?

212

APPENDIX VII
INTERVIEW CODING FRAMEWORK
Respondent

Decision rights

Incentives

Contracts

Organization
Resources

Performance
Measurement

Fair for
those on
contracts
but very
poor for
other
employees

Very good
if matched
with
incentives

Highly skilled
and
knowledgeable
employees.

Very weak
tool because
of being
traditional
could
be improved
to match
modern trends
in
employee
management.

Uses both the

consultative and
the telling
approach where
necessary

Limited
incentives
within
Public
Service
means.
Salaries do
not meet
basics of
life for the
employees.

Given to
the top 5
senior
employees
of KCC
and are
good.
Keep
employees
committed
and
motivated
because of
the good
pay.

No problem all
employees are
knowledgeable
and skilled.
Necessary
information is
accessible.

Good but
inadequate
because there
are modern
ways
of measuring
performance
that could be
used.

Involving where
necessary and
directed where
appropriate

99% of the
workforce
is not
satisfied
with the
incentives.

Contracts
are very
good
because
employees
on
contract
are
motivated,
in scale
U1 U5,
get
gratuity,
and plan
better for
the future.
However
there
could be
job

All employees
are
knowledgeable
and skilled.
Training is
available using
on LGDP
(Local
government
Development
Project)

Appraisal tool
is transparent
and
good but
better
and modern
tool
can be used
to improve
employee
evaluation.

1st t - KCC
Top Manager Y

2nd -- KCC

Top Manager T

3rd KCC
Supervisor K

Involves
subordinates in
specialized areas
eg.net working,
service mgt

213

insecurity.
4th

Supervisor

5th KCC

Involves
employees on
technical issues,
meetings every 2
months, use email

Inadequate
especially
for those on
permanent
terms.

Employees
on
contract
are
motivated
and
committed
to service
while
those on
permanent
terms
show
apathy

KCC provides
the necessary
training and
information to
employees
although IT is
not yet
appreciated

Work plans
are
in place,
periodical
comparisons
between plans
and actual and
self appraisal
are made in
the ITC
department.
Facilitation
usually comes
late making it
difficult for
performance
to be effective
and
efficiently
carried out.

Team work
encouraged

Incentives
are
insufficient

Contracts
are
preferred.

No problem

Very good
performance
management
tool

Limited
consultation but
mostly told what
to do

Very poor
incentives

Very good

Not available
unless on
personal
initiative

Annual
appraisal
which is not
usually
followed
by salary
increment so
it is
inadequate.

Involves
subordinates in
specialized areas
eg.net working,
service mgt

Not
satisfactory

Very good
if matched
with
incentives

Available

Satisfactory

There is employee
involvement

Insufficient

Would be
better is
matched
with
incentives

Adequate but
could be
improved

Happy with it
but can be
improved

Consults and
involves
subordinates. He
is also consulted
and involved in

Very poor
incentives

Contracts
are
insecure
for
teachers
but are

Individuals
try to find
levels but
through
collective
effort
knowledge

Good

Operative Q
6th KCC
Group discussion of
10 teachers
(Operatives)

7th

MoES

Top Manager

8th MoES
Top Manager J

9th MoES
Supervisor L

214

decision making

10th MoES

preferred
to no
terms of
reference
at all

gaps are filled

in

Team work
encouraged

Very poor
incentives

Majority
on
permanent
terms but a
few on
unclear
terms so
contracts
would be
good

10th MoES
Top Manager S

There is
involvement and
consultation

Poor

Contracts
are tricky

Can be
improved

Somehow but
can be
improved

11th MoES

No involvement
Simply
directed

poor

insecure

Unavailable
except on
personal
initiative

Somehow
good

Supervisor H

Operatives
composed of:
4 Secretaries
2 office attendants
6 Secondary
Teachers

215

Inadequate

Very weal
based on
yearly
appraisals

APPENDIX VIII
INTERACTION ANALYSIS
Qualitative data was obtained through interviews with Managers, Supervisors
and Operatives at Kampala City Council and the Ministry of Education and
Sports. Qualitative information from questionnaires was also coded in the matrix
table (see Appendix VII).

4.15 Decision Rights Qualitative Data

Table 4.13 shows qualitative data obtained from interviews and questionnaires
from Kampala City Council and the Ministry of Education and Sports on
decision rights.
Table 4.13: Showing Decision Rights Frequency Counts
Organization Staff
VI
I
category
KCC
Managers
/
Supervisors
Operatives
Sub-totals
MoES

Sub-total
Total
number of
frequency
counts
Percentage

1
Managers
Supervisors
Operatives
Sub-total

1
2%

SHI

NI

/
//

3
//
//

/////
///// //
12

7
22%

12
38%

Key:
VI
- Very involved
I
- Involved
SHI - Some how involved
NI
- Not involved
216

Totalnumber of
respondents
2
2
12

0 16
2
2
///// 12
/////
12 16

12
38%

32
100%

The analysis in table 4.13 clearly shows that respondents who were properly
involved were at the managerial (2%) and supervisory (22%) levels. The
majority of the staff was not involved in decision making.
Table 4.14 Incentives Qualitative Data
Table 4.14 shows qualitative data obtained from interviews and questionnaires
from Kampala City Council and the Ministry of Education and Sports on
incentives.
Table 4.14: Showing Incentives Frequency Counts
Organization Staff
category
KCC

Sub-totals
MoES

Sub-total
Total umber
of frequency
counts
Percentage

VS

Managers
Supervisors
Operatives

SHS

NS

//
//
/////
///// //
2
14
//
//
/////
///// //
16
2
30

Managers
Supervisors
Operatives
Sub-total

6%

94%

Total
number of
respondents
2
2
12
16
2
2
12
16
32

100%

Key:
VS = very satisfied
S
= satisfied
SHS = some how satisfied
NS = not satisfied
Results in table 4.14 revealed that out of the 32 interviewees on the level of
satisfaction of incentives given by their respective organizations, majority
(94%) of the participants, revealed that the incentives were not satisfying and
217

only 6% indicated that the incentives were some how satisfying. This shows that
incentives given to employees in public organizations are not satisfactory.

Performance Contracts Qualitative Data

Table 4.15 shows qualitative data obtained from interviews and questionnaires at
Kampala City Council and the Ministry of Education and Sports on performance
contracts.
Table 4.15: Showing Performance Contracts Frequency Counts
Organization Staff
category

VG

KCC

/
//
/////
///// //
15
//
//
/////
///// //
16

Sub-totals
MoES

Managers
Supervisors
Operatives

Managers
Supervisors
Operatives

Sub-total
Sub-total
Total
number of
frequency
counts
Percentage
Key:
VG = very good
G
= good
SHG = some how good
NG = not good

31
97%

SHG

NG

Total
number of
respondents
2
2
12
16
2
2
12
16

1
3%

32
100%

Table 4.15 reveals that majority (97%) of the interviewees on performance

contracts perceived performance contracts to be very good while only 3%

218

perceived contracts to be just good. In general, public employees perceive

contracts as being very good.
Organization Resources Qualitative Data
Table 4.16 shows qualitative data obtained from interviews and questionnaires at
Kampala City Council and the Ministry of Education and Sports on organization
resources.
Table 4.16: Showing Organization Resources Frequency Counts
RA
A
Organization Staff
SHA NA
Total
category
number of
respondents
KCC
Managers
//
2
Supervisors
//
2
Operatives
/
/////
12
///// /
5
0
0
11
Sub-totals
16
MoES
Managers
//
2
Supervisors
//
2
Operatives
/////
12
///// //
Sub-total
Sub-total
0
0
4
12
16
Total
number of
5
0
4
23
32
frequency
counts
Percentage
15%
13% 72%
100%
Key:
RA = readily available
A
= available
SHA = some how available
NA = not available
Results in table 4.16 revealed that out of the 32 interviewees on the level of
availability of organization resources. The majority (72%) responded that the
organization resources were not available. Only 15% said that organization

219

resources were readily available. Thus public organizations generally lack

organization resources.
Performance Measurement Qualitative
Table 4.17 shows qualitative data obtained from interviews and questionnaires at
Kampala City Council and the Ministry of Education and Sports on performance
measurement.
Table 4.17: Showing Performance Measurement Frequency Counts
VS
S
Organization Staff
SHS NS
Total
category
number of
respondents
KCC
Managers
/
/
2
Supervisors
//
2
Operatives
/
/////
12
///// /
Sub-totals
1
3
12
16
MoES
Managers
/
/
2
Supervisors
/
/
2
Operatives
/////
12
///// //
Sub-total
Sub-total
1
2
12
1
16
Totals
2
2
15
13
32
Percentage
6% 6% 47% 41%
100%
Key:
VS = very satisfied
S
= satisfied
SHS = some how satisfied
NS = not satisfied
The results in table 4.17 indicate that out of the 32 interviewees on the level of
satisfaction with performance measurement, only 12% of them were fully
satisfied (6% very satisfied, 6% satisfied) and 47% were partially satisfied.
However a good proportion of the interviewees (41%) were not satisfied at all.
This revealed that majority of the staff were not satisfied with performance
measure.

220

APPENDIX IX
CHI-SQUARE TESTS AND DIRECTIONAL MEASURES
Chi-Square Tests for decision rights and employee performance
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square

71.450

.000

Likelihood Ratio

68.562

.000

Linear-by-Linear
Association

42.636

.000

N of Valid Cases

517

a. 1 cells (11.1%) have expected count less than 5. The

minimum expected count is .93.

Directional Measures for decision rights and employee performance

Ordinal by Ordinal
Value
Somers' d

Asymp.
Std. Approx
Error
. Tb

Approx.
Sig.

Symmetric

.287

.040

6.957

.000

Decision Rights

.296

.042

6.957

.000

Employee
Performance

.280

.038

6.957

.000

a. Not assuming the null hypothesis.

b. Using the asymptotic standard error assuming the null hypothesis.

221

Chi-Square Tests for incentives and employee performance

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square

15.286

.004

Likelihood Ratio

16.770

.002

Linear-by-Linear
Association

1.656

.198

N of Valid Cases

517

a. 2 cells (22.2%) have expected count less than 5. The minimum expected
count is 1.21.
Directional Measures for incentives and employee performance
Ordinal by Ordinal
Somers' d

Asymp. Approx.
Value Std. Error
Tb

Approx.
Sig.

Symmetric

.018

.041

.434

.665

Incentives

.017

.038

.434

.665

Employee
Performance

.019

.044

.434

.665

a. Not assuming the null hypothesis.

b. Using the asymptotic standard error assuming the null hypothesis

222

Chi-Square Tests for performance contracts and employee performance

Value df

Asymp. Sig.
(2-sided)

Pearson Chi-Square

150.04
2a

.000

Likelihood Ratio

98.702

.000

Linear-by-Linear
Association

84.448

.000

N of Valid Cases

517

a. 1 cells (11.1%) have expected count less than

5. The minimum expected count is .68.

Directional Measures for performance contracts and employee performance

Ordinal by Ordinal
Value
Somers' d

Asymp. Std.
Error
Approx. Tb

Approx.
Sig.

Symmetric

.379

.041

8.761

.000

Performance
Contracts

.389

.042

8.761

.000

Employee
Performance

.368

.041

8.761

.000

a. Not assuming the null hypothesis.

b. Using the asymptotic standard error assuming the null hypothesis.

223

Chi-Square Tests for organization resources and employee performance

Value df

Asymp. Sig. (2-sided)

.000

Likelihood Ratio

75.918

.000

Linear-by-Linear
Association

67.262

.000

N of Valid Cases

517

Pearson Chi-Square

72.752

a. 2 cells (22.2%) have expected count less than 5. The minimum expected
count is 2.51.

Directional Measures for performance measurement and employee

performance
Ordinal by Ordinal
Value
Somers' d

Asymp.
Std. Error

Approx. T

Approx.
Sig.

Symmetric

.347

.035

9.312

.000

Performance
Measurement

.373

.039

9.312

.000

Employee
Performance

.325

.032

9.312

.000

a. Not assuming the null hypothesis.

b. Using the asymptotic standard error assuming the null hypothesis.

224

APPENDIX X
Partial Association of a 3-way Interaction (relationship) of variables
A 3-way interaction (relationship ) of variables
df
Partial
chi-square
Decision rights*performance contracts*organization 8
16.691
resources
Incentives*performance contracts*organization
8
6.132
resources
Employee performance*decision rights*performance 8
19.360
measurements
Employee performance*incentives*performance
8
3.922
measurements
Decision rights*incentives*performance
8
3.583
measurements
Employee performance*performance
8
20.754
contracts*performance measurements
Decision rights*performance contracts*performance 8
9.966
measurements
incentives*performance contracts*performance
8
31.264
measurements
Employee performance*organization
8
8.523
resources*performance measurements
Decision rights*organization resources*performance 8
15.785
measurements
incentives*organization resources*performance
8
21.060
measurements
Performance contracts*organization
8
4.551
resources*performance measurements
Employee performance*decision rights*government 8
12.186
policy
Employee performance*incentives*government
8
2.330
policy
Decision rights*incentives*government policy
8
12.053
Employee performance*performance
8
17.542
contracts*government policy
Decision rights*performance contracts*government 8
30.969
policy
incentives*performance contracts*government
8
18.903
policy
Employee performance*performance
8
10.234
measurement*government policy
Employee performance*organization
8
12.462
resources*government policy
Decision rights*organization resources*government 8
15.355
policy
225

sig
.033
.632
.013
.864
.893
.008
.267
.000
.384
.046
.007
.804
.143
.969
.149
.025
.000
.015
.002
.132
.053

incentives*organization resources*government
policy
Performance contracts*organization
resources*government policy
Decision rights*performance
measurement*government policy
incentives*performance measurement*government
policy
Performance contracts*performance
measurement*government policy
Organization resources*performance
measurement*government policy

226

7.063

.530

20.434

.009

20.280

.009

21.328

.006

11.558

.172

14.390

.072

APPENDIX XI
Parameter estimates of the significant 3-way Interaction (relationship) of
variables

A 3-way interaction
(relationship) of variables
Employee performance*performance
measurement*government policy
Decision rights* performance
measurement*government policy
Incentives* performance
measurement*government policy
Employee performance*decision
rights*incentives
Employee performance*decision
rights*performance contracts
Employee
performance*incentives*performance
contracts
Decision rights*incentives*performance
contracts
Employee performance*decision
rights*organization resources
Employee
performance*incentives*organization
resources
Decision rights*incentives*organization
resources
Employee performance*performance
contracts*organization resources
Decision rights*performance
contracts*organization resources
Employee performance*decision
rights*performance measurement
Employee performance*performance
contracts*performance measurement
Decision rights*organization
resources*performance measurement
Incentives*organization
resources*performance measurement
Decision rights*incentives*government
policy
Decision rights*performance
contracts*government policy
227

df

Estimat Std.
Z-score
e
Error
8
.085
.081
1.058
8

.051

.080

.633

.020

.082

.243

.011

.082

.132

.060

.080

.752

.012

.082

.144

-.006

.082

-.077

.023

.081

.286

.040

.082

.481

.018

.082

.224

.053

.081

.656

.040

.080

.493

.042

.081

.0519

.016

.082

.191

.018

.081

.218

-.002

.082

-.027

.009

.082

.106

.038

.080

.473

Incentives*performance
contracts*government policy
Employee performance*organization
resources*government policy
Performance contracts*organization
resources*government policy

228

.007

.082

.087

-.014

.081

-.171

.006

.081

.069