The rate at which employees in private universities in Nigeria jump from one
university to the other is becoming more disturbing and this could be as a
result of compensation packages of different universities to attract competent
employees. The aim of this study was to examine the effect of compensation
packages on employees’ job performance and retention in a selected private
University in Ogun State, South-West Nigeria. A model was developed and
tested using one hundred and eleven valid questionnaires which were
completed by academics and non-academic staff of the university. The
collected data were carefully analyzed using simple percentage supported by
structural equation modelling to test the hypotheses and relationships that may
exist among the variables under consideration. The results showed strong
relationship between compensation packages and employees’ performance
and retention. The summary of the findings indicates that there is strong
correlation between the tested dependent and independent variables (salary,
bonus, incentives, allowances, and fringe benefits). However, management
and decision makers should endeavour to review compensation packages at
various levels in order to earn employees’ satisfaction and prevention of high
labour turnover among the members of staff
