The general objective of the study was to establish the effects of labor turnover on the organizational performance. Labor turn over was characterized by wage reasons, employee lob expectations and working conditions. Organizational performance on the other hand is the ability to satisfy the clients with quality service, efficient financial control in carrying out his/her duties. The study was guided by the following objectives; (I) To examine the effect of employee compensation on performance at Mbeya Referral Hospital. (ii) To establish the effects of high expectations on labor turnover at Mbeya Referral Hospital. (iii) To appraise the working conditions and their effect on performance at Mbeya Referral Hospital. The study adopted a case study research design whereby both qualitative and quantitative strategies of data analysis were used. Through qualitative strategies the researcher would use this strategy to collect information about employees' attitudes, opinions, or habits about phenomenon being investigated. The quantitative strategies were used to formulate numerical database. Given the population of 497 workers at Mbeya Referral as illustrated above, the researcher drew a sample of 30 respondents from both hospital officials (administrators). The study findings also showed that the majority of respondents had worked in the hospital for up to 5 years which suggests a very low retainment and very high labour turnover rating. The study findings showed in table 4.6 show that the majority of respondents did not think the hospital recognized employees needs as seen by 46.67% while 30% believed that the hospital did recognize employees' needs. Basing on the findings the following recommendations were suggested by the researcher; the reward systems at the hospital need to be reappraised so that they are more general and fair to he whole staff. This should be in line with the government pay scales. The human resource management department should carry out its career management policy and make relevant changes so as to take into considerations the many factors that individuals may require at the hospital