The subject of Compensation and for that matter Indirect Compensation is of immense importance since its impact affects the well being of the individuals in the organizations concerned. It is an important component of Administration and plays a significant role in creating a stable industrial environment, a condition which is vital to national development and economic growth. This study examines the issue of Indirect Compensation by studying a reputable institution, that is, Central University College, which has not experienced any labour unrest so far. It focuses in particular, on the impact of indirect compensation on employee productivity. The study has been accomplished through the use of questionnaires, interviews, administrative and conditions of service manual of Central University College and other sources such as journals, internet resources and text books on management. It was uncovered that though Management implements some of the indirect compensations available, there are other benefits which are not satisfactorily administered and this has contributed to a lack of zeal towards work, which has affected the productivity of staff negatively. The study therefore recommends that Management of Central University College and other organizations should provide the necessary attention that Indirect Compensation deserves, as this will help boost the morale of employees which will in turn result in higher productivity.