In most workplaces, pay is varied among employees depending on their position or status within the organization. The purpose of this study was to investigate this pay inequality in two different contexts. First, researchers investigated individuals’ preferences for pay inequality and considered upward mobility as a possible explanation for strong pay inequality preferences. Second, researchers examined how employees might justify the pay inequality they face in their workplace. In addition, several moderating variables were investigated to determine what might strengthen or weaken the predicted relationships between pay inequality and upward mobility. Past research has studied pay inequality and upward mobility separately but has failed to investigate how they may influence one another. Practical contributions include giving organizations an understanding of how to successfully create dispersed pay systems in their workplaces and contributing to a better understanding of inequality and individuals’ preferences or justifications for it in society.