This study aims at examining the relationship amongst motivation theories applied by universities on employee retention and their performance. It is an interesting insight in the current era in terms of realizing that motivation theories still have their impact on management practices. Retaining employees and managing their performance to the best level has always remained a dream for managers. The methodology adopted is quantitative using a closed ended questionnaire which helped in response generation from 219 teaching and non-teaching university employees. Results revealed that managers who used theory X approach to manage employee retention and performance had weaker outcomes than the ones using theory Y and Maslow's hierarchy of needs theory. The results are beneficial for university management in terms of motivating employees as majority of employees are well qualified and tend to rise using their own skills and capabilities rather than guiding themselves using strict compliance.