internal equity and external competitiveness. As guided by Universal Leaf, depending
on circumstances, TTPL determines which portion of total gross compensation shall be
converted to cash and incorporated into the basic salary, and which portion shall be pro-
vided by the organisation or service providers as benefits or extra. Therefore, due regard
is given to specific circumstances of:
- Legislation
Country legislation defines basic entitlements to employees including minimum wage
and pensions. TTLP as a branch of Universal Leaf uses Tanzanian legislation to guide
compensation just like the headquarters use American legislation. - Competitiveness
The concept of competitiveness depends on the principles of demand and supply for
labour as well as what other competitors offer. However, given the fact that there are
not many competing firms for labour in Morogoro, there are fewer worries. There are
more job seekers than there are jobs available. - Inflation
The rate of inflation is another criteria used by TTPL. However, since inflation in Tan-
zania is highly unstable and salaries cannot be reviewed quickly enough to match infla-
tion, employees are disadvantaged compared to countries where the inflation rate is
more predictable. - Cost of living
The cost of living is also taken into account when computing salaries and other benefits.
However in Morogoro, most people spend more than 75% of their income on food.
Food prices are highly unpredictable, seasonal and depend on production. Low produc-
tion is followed by high prices and it is not practical to review and adjust salaries ac-
cordingly. - Quality of living
The quality of living depends on the level of development of a particular country. Tan-
zania being a poor country has a poor quality of life. Thus, compensation packages are
not set to enable local people live as if they were in abroad. - Affordability
Affordability is a relative term and sometimes depends on other factors including the
size of profit and company willingness to spend a significant percentage to compensate
employees. In principle, each company sets graduated compensation scales which are
approved by executive management with due regard to affordability. These scales are
broad enough to enable local management to pay people differently according to grade,
and performance contribution.
Each company presents its graduated compensation and benefit scales to Universal
Leaf for approval each year prior to budgeting. It considers these scales relative to each
other and the unique circumstances of each country, in order to ensure equity across the
region. TTLP: - Defines in clear terms the compensation benefits attached to each grade,
- Demonstrates the achievement of fairness by ensuring internal equity and external
competitiveness, - Ensures that remuneration awarded to employees form an equitable proportion of
the total gross compensation, and