UAE has higher education institutions and universities from several countries, each of them practicing different systems of educators’ compensation. The present article studies the nature of pay-for- performance in UAE’s private higher education sector and evaluates the employee perception of the role of pay-for-performance in encouraging the performance. The study has considered the feedback of 144 educators from 5 major categories of the higher education institutions in UAE. Data analysis and hypotheses testing have been through standard statistical tools such as Kolmogorov-Smirnov with Lilliefors correction and Shapiro-Wilk test, Kruskal – Wallis H test, Mean-ranks and Mann- Whitney test, spearman correlation, regression analysis etc. The research has found that pay-forperformance is not considered as a replacement to regular pay hike.