Abstract
Orientation: Pay inequality remains a persistent challenge in South African organisations,
particularly in competitive sectors such as fast-moving consumer goods (FMCG). Unequal
and opaque pay practices shape perceptions of fairness, trust and legitimacy, influencing
employee engagement and retention decisions.
Research purpose: This study explores employees’ experiences of pay inequality and
how fairness perceptions influence engagement and retention in a South African FMCG
context.
Motivation for the study: Despite frameworks promoting equal pay for work of equal value,
pay disparities and opaque remuneration practices persist. Understanding how employees
experience pay inequality is essential for organisations seeking to strengthen trust, commitment
and retention amid intensifying competition.
Research design, approach and method: A qualitative, interpretivist design was employed,
using semi-structured interviews with 11 FMCG employees. The study integrates Equity
Theory and Social Exchange Theory to explain how pay inequality is interpreted as both a
fairness judgement and a relational signal, shaping retention over time.
Main findings: Pay inequality is interpreted as a fairness and legitimacy issue. Inconsistent
pay structures, opaque decision-making and limited transparency intensified social
comparison, undermined trust and contributed to psychological withdrawal, disengagement
and increased openness to external opportunities.
Practical/managerial implications: Organisations should address pay equity and governance
by implementing consistent, transparent remuneration systems, strengthening communication
and aligning transparency initiatives with corrective action to reduce disengagement and
retention risk.
Contribution/value-add: This study offers context-sensitive insights into pay inequality in
South African FMCG organisations, extending equity and exchange perspectives and informs
fair pay governance and retention strategies.