Now that the cost of living is rising dramatically in Addis Ababa and throughout Ethiopia employers are being forced to pay attention to the challenges their employees face. Many organizations now must revise salary scales or develop them due to pressure from employees to raise salaries. The competition for competent employees is also becoming stiff for skilled labor especially in the financial industry.
To retain good employees companies need not only to revise salary scales but fringe benefits as well. Many people feel that increasing salary improves performance but its most important function is retaining and attracting competent employees. To improve performance organizations must have incentives for individuals, groups and organizations.