Pay transparency emerged as a contentious human resource management practice with potential implications for employee motivation and performance. In Masaka District public secondary schools, opacity in salary structures and allowance distribution created perceptions of inequity that potentially affected teacher performance, yet empirical evidence documenting these effects remained limited. This study employed a mixed-methods convergent design involving 239 respondents from selected public secondary schools in Masaka District. The sample comprised 214 teachers, 8 head teachers and deputy head teachers, 7 district education officials, and 10 school management committee members, selected through simple random and purposive sampling techniques. Data were collected using structured questionnaires and semi-structured interview guides, then analyzed using SPSS version 25 and thematic analysis. The findings revealed a significant positive relationship between pay transparency and teacher performance (r = 0.634, p < 0.001). Teachers in schools with higher pay transparency demonstrated superior performance across instructional delivery (mean = 4.18 vs. 3.42), student engagement (mean = 4.05 vs. 3.38), and professional responsibilities (mean = 4.12 vs. 3.51). Regression analysis indicated that pay transparency explained 40.2% of variance in teacher performance. Qualitative findings revealed that transparency enhanced perceptions of fairness, reduced workplace conflicts, and improved motivation. Pay transparency significantly and positively affected teacher performance in Masaka District public secondary schools. Transparent salary structures and allowance distribution systems enhanced teacher motivation, organizational trust, and performance outcomes through mechanisms of perceived fairness and reduced status ambiguity. The Ministry of Education should mandate standardized pay transparency policies in public secondary schools, including disclosure of salary scales, allowance criteria, and distribution mechanisms, while providing training to administrators on implementing transparent compensation systems that balance openness with privacy considerations.