A Dissertation Submitted in Partial fulfilment of the requirements for the
Degree of Masters of Business Administration in Corporate Management
(MB-CM) of Mzumbe University.
This dissertation assessed the effect of salary arrears on employee performance in the
public sector in Tanzania, using the Ministry as a case study. Three specific
questions guided this study: How do salary arrears affect employees’ performance?
What has the government done to solve salary arrears problem? Which factors
influences employee performance in Tanzania? Through a mixed methods approach,
the study area was approached using interviews and questionnaires to collect and
analyze information on effects of salary arrears to the performance of the employees
from a sample size of 60 respondents.
Although there are studies of other scholars but this study specifically dealt at
assessing the impact of salary arrears to the public sector. Hence it consequently
intended to fill the gap identified as to establish how salary arrears affect Employee’
performance at the Ministry, determining the factors influencing the employee
performance in the public sectors and assess the effect of government intervention to
solve salary arrears problems and the best way to improve salary arrears payments.
Generally, the findings obtained through interviews and questionnaires have shown
that the salary arrears have positive impact to the performance of the employees in
most of the public sectors. It was further observed that its impacts weren’t only
noticed on the attainment of organizational goals but also in employee’s lives as a
whole. Although it is so true that the issue of salary arrears is a national issue and the
public service management in collaboration with the Ministry of Finance and
Planning are in the process to find out a new way in paying salary arrears on time.
The government has introduced the system of Human Capital Management
Information System (HCMIS) with brand name of LAWSON which is a very
sophisticated wage bill package to monitor all public sectors employees by paying
their salary monthly and on time in order to reduce arrears when they are promoted
or appointed in the public sectors. There is a need to set the policy against arrears
that would allow the employees from improving their performance knowing when
actually their arrears would be cleared by the government.