Compensation as Governance: Allowances and Employee Turnover in Public Sector Institutions

Eustadius Mujuni  Dauson; Lucy Willy  Massoi

Eustadius Mujuni Dauson Mzumbe University, Morogoro, Tanzania
Lucy Willy Massoi Mzumbe University, Morogoro, Tanzania

Keywords: Compensation allowances, employee turnover, governance, expectancy theory, equity theory, public sector, Tanzania

Abstract

Compensation allowances function as important governance instruments that shape employee motivation, fairness perceptions, and turnover intentions in public sector institutions. Drawing on a mixed-methods case study of a revenue administration institution in Tanzania (n=32), this paper examines the availability, perceived adequacy, and governance of allowances using questionnaires and semi-structured interviews. Findings show that overtime allowances are universally available and strongly linked to employee satisfaction, while welfare-oriented allowances (transport and medical) have more limited coverage. Although overall satisfaction is relatively high (71.9%), gaps in key allowances foster perceptions of inequity and significantly influence turnover intentions (75% reported very great influence). Interpreted through expectancy theory, equity theory, and network governance perspectives, the study reconceptualises compensation allowances as governance tools. It recommends transparent, balanced, and welfare- sensitive allowance systems to strengthen employee retention in public sector settings. financial leverage of SACCOS.