In many South African organisations, remuneration has quietly drifted from its original purpose. What was once a powerful lever to drive performance, accountability, and growth has become predictable, expected, and too often disconnected from contribution. The result? A culture of entitlement that businesses can no longer afford. This isn’t about blaming employees. It’s about recognising a hard truth: organisations have designed reward systems that unintentionally reinforce the very behaviours they now struggle to change.
Amongst other objectives, the proposed Fair Pay Bill seeks to cancel any restrictions on employees discussing their pay, promoting greater transparency around remuneration. In an environment where salary information becomes more visible and comparable, organisations will increasingly need to justify differences in pay through clear performance outcomes, accountability, skills, experience and measurable contribution. Without a credible connection between pay and performance, greater transparency could intensify perceptions of unfairness and erode trust within organisations.
How did we get here?
Entitlement is built over time through well-intentioned practices:
• Guaranteed annual increases
• Bonuses paid regardless of business performance
• Minimal differentiation between high and low performers
• KPIs that are vague, too easy, or not enforced
Over time, pay stops being something you earn and becomes something you expect.
The real cost
This shift has consequences:
• High performers disengage when excellence isn’t recognised
• Underperformance persists without consequence
• Fixed costs rise without matching productivity
• Trust erodes when organisations try to “fix” the system
In a low-growth, high-cost economy like South Africa’s, this is simply not sustainable.
Why performance-based pay fails in practice
Most organisations agree that pay should reflect performance, but the real issue isn’t pay it is performance management. If performance isn’t clearly defined, consistently measured, and courageously managed, reward systems will always fall short. Instead, they become:
• Inflated ratings
• Avoided conversations
• Misaligned metrics
• Political bonus decisions
So what needs to change?
Done right, performance-based systems can:
• Reward real contribution
• Enable upward mobility
• Strengthen transformation outcomes
Performance management is not about being harsher. It’s about being more honest.
• Honest about what the business can afford
• Honest about who is contributing
• Honest about what pay is meant to do
• Because in today’s environment, organisations cannot afford to pay for activity. They must pay for impact
A meaningful reset requires:
• Clarity – Clearly define what the different levels of performance are so that accountabilities and reward mean something
• Differentiation – Reward contribution, not presence
• True variability – Make incentives genuinely performance-based
• Leadership courage – Have the difficult conversations and stand by decisions
If reward systems continue to value presence over performance, organisations shouldn’t be surprised when performance becomes exactly that—present, but not impactful #PerformanceCulture #Leadership #PerformanceManagement #Remuneration #HR #SouthAfrica #BusinessStrategy
How can Khokhela help your organisation?
Khokhela partners with organisations to elevate performance—whether by refining existing frameworks or building new performance management processes from the ground up. We don’t stop at design. Our approach is hands-on and end-to-end, covering implementation, system integration, leadership alignment, and practical training to ensure lasting adoption and real, measurable impact.
- Geraldine Heynes – Executive Advisor @ Khokhela Remuneration Advisors