It has been observed that in the recent past that teachers have been leaving the teaching profession for other lucrative jobs. The exodus of teachers to other employments has led to high staff turnover. The study focused on the financial and non-financial compensation strategies to secondary school teachers and how they affect their job motivation at work. The study was expected to assist the Government, Teacher Service Commission (TSC), Schools' Board of Governors (BOG) and other policy makers to evaluate compensation strategies in place and their effectiveness in motivating teachers. The general objective of the study was to analyze the effects of financial and non-financial compensation on teacher motivation. The literature review high- lighted the various compensation and motivation methods in place. Empirical framework showed that teachers' preference of factors of compensation has not been given the necessary attention by various researchers. Theoretical framework focused mainly on Alde- fer's ERG Theory and Maslow's Hierarchy of Need Theory. The conceptual framework indicated the linkage between the employees' needs and their effects on motivation. The chosen area of study is Nakuru Municipality which is one of the three municipalities in Rift Valley Province. The population of study consisted of five hundred and forty (540) teachers in twenty (20) public secondary school.The sample comprised of ten (10) secondary school principals and one hundred and eighty (180) teachers. Data was collected using both structured and Likert 5-point questionnaires. The questionnaires were administered through drop and pick technique to avoid delay in data collection and later, all the necessary data collected, was sorted and analyzed. The researcher made recommendations on how to compensate teachers by coming up with compensation strategies such as involvement in decision making, individual recognition and promotion among others that were popular among the teachers. The strategies, if adopted by various stake holders, are expected to lead to teachers' motivation in their work hence, higher employee retention, better quality of service and higher productivity.