International best practice shows that governments and global agencies are currently implementing performance contracting to enhance performance of civil servants and entrench good governance and accountability. This research set to establish the effectiveness of performance contracting (P.C) in the government institutions this far. The study sought to answer the questions; "Does what is written in the Performance Contract, match the outcome in terms of service delivery?".This was a case study of the Provincial General Hospital in Nakuru County.The study established that indeed performance contract was critical for service delivery. The effectiveness of the implementation of PCs in public institutions depended on on the knowledge of the employees and managers on the content of the PC, extent of the work done in relation to PC and the measures necessary to effect the implementations.It was recommended that governments emback on capacity build to enlighten the employees on the genesis and implication of PC.The well performing employees should be rewarded and the uncooperative to face strict penalties.Further research was also advised to shade more light in the study problem.