A Dissertation Submitted in Fulfillment of the Requirement for the Degree of Master of Science in Human Resource Management (MSC.HRM) of Mzumbe UniversityIncentive pay play crucial role when it comes to capacity development by motivating individuals and targeting organizational performance. But it does not always contribute to improved public work performance and may even present obstacles to capacity development. The obstacles may be linked to competing disincentives leading to capacity erosion, such as sustained low wage levels, lack of transparency in recruitment or promotion based on political affiliation. The lack of knowledge about efficient use of incentives and human resource management tools and distorting effects of donor presence, are additional reasons for failure. In this study the researcher was eager to investigate the reasons making incentive pay not increase work performance in TMC. There are incentives of both monetary and non monetary form provided in the organizations of TMC but still rare changes occur. Different studies have been conducted looking for the significances and challenges of incentives in increasing work efficiency. With all these no study conducted to realize the reason for incentive pay fail to improve work performance in government organizations especially in TMC. Hence the researcher was eager to explore the reasons make incentive pay do not increase work performance. The study conducted by looking on three objectives which were guidelines used in setting incentive pay on work performance, the hindrance of incentive pay to increase work performance and the mechanisms to make incentive pay increase work performance in Tabora Municipal Council. The findings of the study were organized by regarding the specific objectives of the study. Each research objective findings presented separately to each other. Apart from that, the study employed case study research design to make sure the required data are gathered. This is because the case study design is good for qualitative approach and in search of more detailed information. The study used a sample size of seventy seven (77) respondents who were obtained by using simple random sampling, stratified sampling and judgmental sampling techniques. The data were collected by vii using interview, questionnaire and documentation tools. This is because the tools are relevant in case study research design. Furthermore, the data collected were analyzed by using qualitative method of data analysis. The data were synchronized and organized by transforming findings from the fields into the system of categories and transformation into meaningful information for easily interpretation and understanding. They were then presented in tabular forms, with frequencies and percentages being calculated for drawing up conclusions. Nevertheless as the study was about an incentive pay and its impact on work performance in TMC, hence the study explored and managed to know the incentive pay provided to increase work performance in TMC. In TMC, money, promotions, appreciation letters, houses, short courses, seminars and health insurance have been provided as incentives pay to workers to increase work performance. Although are provided, these incentives have not taken pace to improve work performance in the organizations. Notwithstanding, the study explains the factors causing incentive pay not to increase work performance in TMC. The most important factors said to cause incentive pay not increase work performance are such as corruption, inadequate facilities, insufficiency incentive provided, weak policy and government secular, untimely pay of incentives to workers, inadequate skills and education to workers, poor management systems, favoritism and biasness in employment. All in all, the study looked on the mechanisms to make incentive pay sound more and rise performances in government organizations are discussed in this study. This is to make a way for TMC and government in general to improve work performance through incentive pay effectively and efficiently. It is anticipation of the study that the government organizations country wise will use the findings to improve the incentive pay for work performance. viii However, the researcher put forth the conclusion that to make incentive pay increase work performance in the organization there are list of serious issues, considering them in advance of implementation enables organizations to lay the foundation for a successful performance based compensation system. These issues include looking on the ability, willingness, and control tools set for the particular work to be performed. The issue of resources and honesty are also important should be used concurrently with incentives set to be used. Finally, the following recommendations are put to be considered on the issue of incentive pay related to work performance. First, proper setting of incentive pays with the intention of providing it fairly, equally and appropriately. Second, there must be involvement, participation and engagement of workers when it reaches a time incentive pay want to be provided to workers. Third, heads of department are not supposed to dominate the process of getting the superior work performer but to leave the process to workers themselves for suggestion. Fourth, employers and heads of department have to avoid favoritism and biasness as they erode the spirit and morale in workers. Lastly, all the requirements for workers to perform work need to be available to make incentive pay sound in bringing positive impact in work performance.