Volume 18, No. 6, 2021

Pay Inequity Among Same-Level Employees Of Public Sector Institutions Of Pakistan

Naveed Farooq , Syed Haider Khalil , Fahad Sultan , Muhammad Ibrahim Khan , Syed Mohsin Ali Shah , Sheraz Hassan


Purpose: Pay disparity is common in the private sector over the world. In Pakistan, there are perceptions that the same issue also exists in the public sector. This study explores the views of Pakistan's public-sector employees regarding disparities in their compensations and whether there is evidence that supports these views. Design/methodology/approach: This study is conducted in two stages. First, it examines public-sector employees' payslips to determine actual variations in gross pay; second, it conducts and analyses the contents of semi-structured interviews with entry-to mid-level employees from selected public-sector organizations. These interviews were designed to explore perceptions of the dispersion of compensation across employees with the same education and experience and were perceived as performing similar tasks. Findings: Findings indicate that pay inequality exists in Pakistan's public sector. Findings suggest that there are five dimensions of pay-inequality in public sector organizations of Pakistan. They include proximity to power circle, special allowances, disproportionate pay increase, market-based salary, and cash cow organizations. Originality: The existing pay structure of the public sector in Pakistan should be modeled according to the principle of "equal pay for equal work" to evolve a transparent pay structure. Fair compensation also protects organizations from protracted litigation and improves overall productivity. Pay dispersion is an internationally well-researched topic; but, to the author's knowledge, this study is the first to explore the effects of pay dispersion in Pakistan's public sector organizations. Significace of the study is discussed in the current study.

Pages: 8185-8204

Keywords: Pay disparity, Public sector, Compensation, Federal government, Organizational citizenship behavior.

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