Spare yourself the headache and buy this classic on GOG.
I bought it here first and after hours of suggested workarounds - nothing worked. Could not get is running at all. I refunded and tried my luck with GOG (they usually are quite good with old games) and worked like a charm. Only thing I had to do is setting game resolution to match desktop resolution, rebooted and it works.
Joystick support is there (but I have non) and Controller support seems not to exist but I can life with that.

Steam usually just sales classic games in an unoptimised state for current systems and let the users deal with it. So I recommend everyone who loves the classics not to buy on Steam. For old games GOG is the way to go.