‘Boss, are you a shareholder in this bank, are you earning big dividends?’ the financial controller asked, his eyes twinkling. My friend, newly promoted to head the division, shook his head. ‘Then why is the bank giving me a bigger salary than you?’ This is a common story in Rwanda. Another client, recently appointed to lead a well-established company told me that none of his managers knew what their direct reports were earning. Only the old CEO had access to salary data. Several managers discovered their own team members earned more than they did. Pay fairness is one of the most important things that employees want from their employers. But it’s very rarely achieved. Nearly every country has persistent pay gaps between men and women. Unfair pay erodes trust and fuels turnover. It also has consequences at industry-level. For example, the 2024 Finance-Sector skills report shows Rwandan banks and insurers are losing their best people to poaching, which drives up costs and reduces the will to invest in training. Roles with the same experience and seniority have different compensation across organisations, yet firms are wary of cross-company salary surveys that could help them rationalise pay and reduce churn. Major changes are underway on pay equity internationally. Under new regulations that the European Union will enforce next year, every job ad must show a salary range, and candidates can no longer be quizzed about past pay. Every employee will have the right to ask their employer what it pays others doing work of similar value. European employers are scrambling to prepare, but the rules may help them too, curbing inflated salary demands and aligning pay with the value employees create, not their bargaining tactics. If salaries are fairly distributed and competitive against the market, companies can focus their attention on the things that drive performance: developing their people, delighting their customers and finding new sources of value. Rwandan employers don’t need to wait for regulations. They can get ahead of the curve by using annual appraisals to surface pay anomalies, enforcing clear salary bands for new hires, and running regular market-survey checks to keep packages rational. The upfront effort is modest; the upside in lower turnover, and higher engagement, is huge. The writer is the CEO of Transforming Engagements (TES) Ltd, a Kigali-based consultancy that helps organisations prosper by transforming leadership and culture. Reach him at christian@transformingengagements.com
