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

Domain:

socioeconomic

Record type:

paper

Creator:

EusLuc

Publisher:

Afr

Host:

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.

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