Abstract
Pay inequality continues to be a major issue in the South African labour market, influenced by historical, structural, and organisational factors. In the fast-moving consumer goods (FMCG) sector, these pay disparities affect employees’ sense of fairness, well-being, and decisions about staying with an organisation. This study explores how employees and managers perceive pay inequality and its impact on retention within a selected FMCG company in Gauteng, South Africa.
A qualitative approach, guided by an interpretivist paradigm, was used to capture participants’ experiences and views. Semi-structured interviews were conducted with ten participants across different roles and departments. The data were analysed thematically and interpreted through Equity Theory, Social Exchange Theory, and Organisational Justice Theory, which together explain how fairness and reciprocal relationships influence employee behaviour.
Findings showed that pay structures were seen as unclear and inconsistently applied. Employees reported that unclear pay bands, discretionary bonuses, and managerial bias created feelings of unfairness and favouritism. These perceptions led to lower motivation, weaker commitment, and higher intentions to leave. Pay inequity also affected well-being, causing stress, disengagement, and “quiet quitting.” Participants emphasised that transparency, clear communication, and consistent policy enforcement are key to rebuilding trust and improving retention.
The study also found that although legislation such as the Employment Equity Act (1998) and the Code of Good Practice on Equal Pay for Work of Equal Value provides a foundation for fairness, gaps remain between legal requirements and actual practice. Persistent inequities and limited pay transparency indicate that organisations often fall short of legislative goals.
The research recommends a framework of interventions: short-term measures such as improved communication and workshops; medium-term strategies including regular pay audits and benchmarking; and long-term actions like embedding equity into performance management and HR systems. Despite its small sample and reliance on self-reported data, the study offers insights into how pay inequality, fairness perceptions, and retention interact in South Africa’s FMCG sector. It contributes to theory and practice by highlighting challenges and providing practical steps for promoting fairness, transparency, and sustainable retention.