In today’s dynamic environment, traditional business models often fall short. This study focuses on Nigerian private education, emphasizing human capital as a driver of competitive advantage. It examines how well-designed compensation practices foster affective commitment, cultivate an ethical climate, and enhance dynamic capabilities. The research highlights the role of equitable rewards in promoting emotional attachment, loyalty, and positive work attitudes while addressing the overlooked link between compensation and ethical business practices. By integrating these elements, the study explores how dynamic capabilities enable organizations to adapt and thrive amidst challenges. Using structural equation modeling, the findings reveal that dynamic capabilities not only directly influence affective commitment and ethical climate but also amplify the impact of strategic compensation on staff dedication. The study offers actionable insights to help Nigerian private schools build a committed, high-performing workforce, paving the way for long-term success in an increasingly competitive landscape.
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