The study was on the influence of compensation management on employee motivation in Tanzania banking industry. The study was guided by specific objectives such as to establish the methods used to determine employees compensation, to establish the extent to which the direct financial payments influence employees motivation and to establish to which extent benefits affects employees motivation in CRDB Bank in Mwanza City. The study adopted cross sectional survey research design. The sample size was 60 respondents obtained through simple random sampling procedure. The study used questionnaire as tools of data collection. Data was analyzed using Statistical Package for Social Sciences. The study revealed that there are challenges to motivation given to them and seem not satisfied by the pay given since they think what they have is less compared to their skills and work they do. The study also accessed that the respondents were sure of the compensation plan in place and that it meets the minimum requirements of the government of Tanzania and that they agreed that the plan achieved internal and external equity. These could mean that the compensation plan is well communicated to its stakeholders including employees. Compensation for the use of skills received a negative response from majority of respondents and this could mean that CRDB bank do not use skills used as a base for the determination of compensation packages or employees are not placed in the jobs that precisely fit their skills. This study showed that employees are not motivated by their basic pay and are motivated by the increase in their change in their basic pay. Basing on this understanding the study recommends that proper salary surveys and job evaluation should be done in order to ensure equity between salary and work.