Effect of Pay Equity on Employee Commitment in the Nigerian Telecommunications Sector: A Study of MTN Nigeria

This study examines the effect of pay equity on employee organizational commitment in MTN Nigeria, one of the country's largest telecommunications companies, with data drawn from employees in its Lagos operational headquarters. Pay equity, encompassing both internal pay fairness relative to colleagues and external market alignment, has been identified in recent HR literature as a significant determinant of employee commitment and retention. A quantitative survey design was adopted, with 160 MTN employees at various job grades responding to standardized questionnaires. The study is theoretically anchored on Adams' Equity Theory and Meyer and Allen's Three-Component Commitment Model. Findings demonstrate that employees who perceive pay equity in their compensation, particularly in relation to peers performing similar roles, show significantly higher affective and normative commitment. The study also reveals that awareness of external pay disparities between MTN and competing telecom employers, when perceived negatively, is associated with heightened continuance commitment rather than genuine loyalty, as employees stay primarily because of switching costs rather than genuine organizational attachment. Gender pay disparities within the firm are identified as a significant driver of lower female employee commitment. Recommendations include implementation of transparent pay banding systems, annual external pay benchmarking exercises, and the establishment of a pay equity audit committee reporting directly to the Board HR committee. This study contributes empirical evidence to compensation management literature in Nigeria's telecoms industry. Keywords: pay equity, employee commitment, telecommunications, MTN Nigeria, compensation management