Pay transparency and fairness perceptions in South African organisations: A qualitative study of employee attraction and retention

Abstract

Orientation: Pay transparency has gained prominence as organisations seek to enhance fairness, trust, and talent retention. While international research demonstrates that transparent pay practices shape employee attitudes and behaviours, limited research has examined how transparency is experienced in contexts marked by historical inequality, such as in South Africa.
Research purpose: This study explores how pay transparency influences employee attraction and retention in South African organisations by examining employees’ and human resource professionals’ lived experiences of transparency practices.
Motivation for the study: Despite legislative efforts to promote equitable remuneration, wage inequality and distrust surrounding pay decisions persist in South Africa, which is shaped by apartheid-era labour legacies. Qualitative research examining how transparency is interpreted within this socio-historical context, and how these interpretations shape fairness perceptions and retention decisions, remains limited.
Research approach/design and method: An interpretivist qualitative approach was adopted. Semi-structured interviews were conducted with 21 participants across multiple industries. Data were analysed using reflexive thematic analysis to identify patterns and shared meanings.
Main findings: Five themes emerged: perceived fairness and trust; clarity in reward decision-making; preferred transparency principles; career growth and development; and managing internal pay equity. Pay transparency influenced attraction and retention primarily through procedural and informational justice, rather than distributive justice alone. Participants valued structured openness regarding pay principles, criteria, and salary ranges, without necessarily disclosing individual salaries.
Practical/managerial implications: Organisations should adopt structured transparency models and strengthen explanatory communication to enhance trust and retention outcomes.
Contribution/value-add: The study provides context-specific evidence from South Africa, demonstrating the centrality of procedural and informational justice in shaping employee responses to pay transparency.