This study examines the extent to which compensation management can be used as a tool for improving organizational performance in a typical public sector organization like the Anambra
State of Nigeria Civil Service. Guided by the Vroom’s expectancy theory of motivation, this study seeks to ascertain if financial compensations have a significant relationship with employee performance in the public service using Anambra State Civil Service as a reference. It also aimed at finding out if efforts of the employees are commensurate with financial compensations and ascertain the extent to which reform programmes of the State Government have affected compensation policies and practices. In pursuance of the objectives of the study, the descriptive survey design was adopted. Pearson’s Product Moment Correlation was used for data analysis and Z-test was also used to test the significance of the coefficient of correlation at 5% level of significance. It was found that financial compensation for staff members in the public service do not have a significant effect on their performance and that financial compensation received are not commensurate with staff efforts. The study further found that reform programmes of the
Government do not have a significant effect on the financial compensation policies and practices in the public sector due to poor compensation management. Based on these findings, it isrecommended that for any public service organization such as the Anambra State of Nigeria Civil Service Commission to improve the performance of employees, they should offer financial compensation that will be specifically designed to link it with performance.