The purpose of the study was to investigate performance contract implementation issues and strategies in Kenya, a case study of Moi University.The objectives of study were to; investigate performance contract implementation issues in relation to staff performance review; asses performance contract issues in relation to consequences of signing performance Contract ;establish staff issues in relation to implementation of performance contract policy for lecturers.A case study was used to guide this study which utilized mixed method approach. The target population was 761 academic staff and 994 non academic staff. Purposive sampling was used to select 19 staff of high cadre. Proportionate stratified sampling was used to get 50% of the departments from each school and from departments in the administrative unit. A total of 170 academic staff and118 non academic staff participated in this study. Data was collected using questionnaires and interview shedules. Data was analyzed using descriptive statistics whereby frequencies and percentages were used. The study found out that employees were not allowed to participate and contribute in setting targets at the beginning of the contract period. Furthermore, it was found out that signing of performance contract led to improved service delivery,greater job satisfaction and customer satisfaction. However, good work is not noticed, recognized and rewarded and no sanctions were made at the end of the contract period. It was recommended that the institution should ensure that staff are allowed to participate and contribute in setting the realistic and achievable targets in their departments at the beginning of the contract period. The government through universities should design a reward or sanction system as they implement the signing of Performance Contract in government institutions. It was further recommended that; for proper implementation, more training on the content of the performance contract should be done. It is hoped that the findings of this study will form a basis for formulation of policies on strategies for effective implementation of performance contract in gorvenment institutions. Furthermore, policy solutions will be provided on challenges of implementing performance contracting. .
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