The assessment of the effects compensation strategies on employees in the private sector in tanzania: a case of Dar es Salaam City

This study was conducted to assess the effects of compensation strategies on employees in the private sector in Tanzania. It aim at examining how salary and wages, incentives and fringe benefits affect employee, and the employees’ attitude towards compensation. The study used a case study of Dar es Salaam city where the data were collected from 80 employees from 7 private organizations. Questionnaires were used to collect data from employees. The findings revealed that incentives motivate employees to perform well, it also influences employees to stay longer in the organization though it does not attract an employee to join an organization. It also revealed that, Fringe benefits, salary and wages have no effect on employee motivation, decision to stay in the organization, decision to join an organization and job satisfaction. It further revealed that employees are not satisfied with their salaries.On employees’ attitude towards compensation, the finding revealed that the compensation is not fair, it does not match with the job, and it does not satisfy employees.Generally employees have a negative attitude towards compensation.The researcher recommended that, to ensure employee’s productivity, organizations should use more of incentives since it is a good motivator, and also give some fringe benefits because their absence may de-motivate employees. Employers should also ensure that the compensation they give is equitable and the compensation plan should put into consideration the cost of living by including dearness payment in the plan, and the government of Tanzania should formulate a policy which enables employees to be given dearness payment during times of high inflation