Online Reporter
Employee Relations
Dr Request Machimbira
Internal equity is the principle that differences in pay must reflect defensible differences in jobs.
It has two pillars:
a) Equal pay for work of equal value: Jobs involving similar skill, effort, responsibility and working conditions should be compensated comparably.
b) Equitable differentials for work of unequal value: When jobs are different, the pay gap between them must be proportionate, rational and explained objectively.
The second pillar is where most organisations fail. The question is not “Should the CEO earn more than the workshop hand?” Of course. The question is “Should the CEO earn 115 times more?” Is that differential equitable, or is it extractive?
Equitable differentials are not accidental. They are designed. They require job evaluation, grade structures, compa-ratios and caps that prevent runaway gaps.
Without them, “pay for performance” becomes “pay for power”, and the structure collapses under its own weight. When internal equity fails, you do not just have a human resource (HR) problem. You have a governance failure, a retention crisis and a performance drag.
How do you explain a minimum wage of US$260 for the lowest-paid employee and US$30 000 for the highest-paid, presumably the CEO? A 115:1 ratio! No job evaluation system, no competency framework and no performance metric can produce a differential of that magnitude. The issue is not that a differential exists. It is that this one cannot be defended.
The hotel does not run because the executive is in the office. The chef, not the CEO, prepares meals.
The garage is cleaned by the workshop hand, not the finance director. Value creation is distributed. Yet pay is concentrated.
This disconnect is the clearest symptom of broken internal equity. It signals that differentials are no longer tied to contribution, but to unchecked authority.
Wage differentials and internal equity should be standard audit issues, right alongside financial misstatements and procurement risk.
Yet most external and internal audits ignore them. Auditors chase “ghost workers” while real employees leave because the pay structure is a ghost of fairness.
If the payroll is 40-60 percent of operating costs, how is the equity of its differentials not material to audit risk?
Payroll inequity is a governance issue, period. Board HR or remuneration committees approve structures with differentials they do not understand, using benchmarks they do not interrogate.
The result: Executives retain themselves while the organisation bleeds critical low-level staff.
The irony is stark: Executives go nowhere; their packages insulate them. But the chef, the nurse aide, the driver — they leave.
And when they leave, service collapses. A remuneration committee that cannot justify its approved differentials is dysfunctional by definition.
National employment councils (NECs) were designed to regulate the workplace; however, many have become accomplices in inequity. How? Through the blunt instrument of “across-the-board” percentage increases that blindly widen differentials.
Take an A1 employee earning US$300 and an A2 earning US$320. The sub-grade differential is US$20. Apply an NEC-mandated 8 percent increase across the board: A1 becomes US$324,00. A2 becomes US$345,60.
The new differential moves to US$21,60 and keeps widening across all the grades.
Do that for five years and the gap compounds. The NEC did not manage the differential; it inflated it by 8 percent annually. Collective bargaining without grade modelling turns differentials into runaway gaps. And the ripple effects: from unsustainable wages to sick businesses. Inequitable differentials have consequences that compound.
Exorcising the goblins
a) Board remuneration committees need onboarding.
b) Remuneration committees need revised terms of reference that mandate equitable differentials as a key performance indicator (KPI).
c) Remuneration committees need an oversight dashboard showing key metrics. If it is not on the dashboard, it will not be managed.
d) Train NEC negotiating committees in compensation modelling, not just bargaining.
e) Collective bargaining agreements must include explicit upper limits on sub-grade differentials. Example: “The difference between A1 and A2 shall not exceed 8 percent of the A1 base.”
f) Remuneration policies must be audited.
Internal equity is not about eliminating differentials. It is about making them equitable. The fix starts with courage: to measure the differentials, to disclose them and to rebalance them.
Dr Request Machimbira is the executive director of Proficiency Consulting Group and the International Wellness Institute. For feedback, email request @proficiencyinternational.com or phone +263772693404.
