Dissertation (MA Business Administration)This study had an aim at assessing the impact of employee’s incentive system on the performance of DUWASA. The study specifically addressed three objectives, namely; perceptions of the employees regarding incentives system used by DUWASA, an effect of incentive used on the performance of DUWASA and challenges facing DUWASA, in operationalizing incentive to its employees. This study employed a holistic descriptive case study design, where data were collected from employee respondents and the management personnel. Questionnaires and direct interviews were employed as data collection methods from employees and management respectively. Thereafter, data were analyzed by using both qualitative as well as quantitative means. It was found out that, employees of DUWASA preferred more monetary than non-monetary incentives and that, they favoured salary increase as their monetary incentive compared to other monetary incentives. It was also revealed that, employees had a positive evaluation for almost all indicators of performance as being influenced by incentives provided, strangely, the study could not establish a relationship between performance and incentive provided by DUWASA to its employees. Furthermore, it uncovered some challenges which were the cause of DUWASA inability to implement its incentive programme well. These were mainly; shortage of funds and lack of organization guidelines. It was recommended that, management of DUWASA crafted incentive guidelines, to be applicable for its employees of all cadres. It was also recommended that, DUWASA to take an initiative to emulate best practice elsewhere, in implementation of incentive scheme that was linked to the performance indicators of the firm.