THE INFLUENCE OF COMPENSATION PRACTICES ON PERFORMANCE OF SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES IN TANZANIA

Abstract

This study examined the relationship between compensation and SACCOS performance in Tanzania. The study focused on examining how three independent variables which are direct compensation, indirect compensation and consistency of compensation affect SACCOS performance. The study was underpinned by the equity theory. The theory postulates that an employee tends to compare his/her inputs in an organization with outcomes of those inputs by considering on how others benefit from their inputs as well. Quantitative approach was used through which data collection from 317 HR Managers (or their equivalent) was done by using questionnaires. Descriptive and inferential statistics were used for data analysis. The study found that all the three independent variables had significant positive relationship with SACCOS performance when correlation analysis was conducted. Multiple linear regression analysis results showed that direct compensation and consistency of compensation were significant predictors of SACCOS performance while indirect compensation was not. The findings were consistent with the equity theory. The study recommended designing and suing competitive compensation packages that include both direct and indirect compensation. Moreover, compensation should consider both internal and external consistency. Keywords: Compensation, Direct Compensation, Indirect Compensation, Equity Theory, SACCOS CITATION : Mwita, M. M., & Nzulwa, J., & Kamara, M. (2023). The influence of compensation practices on performance of Savings and Credit Co-operative Societies in Tanzania. The Strategic Journal of Business & Change Management, 10 (4), 505 – 514. http://dx.doi.org/10.61426/sjbcm.v10i4.2768.