As a pivotal component of China’s higher education system, private universities play a critical role in advancing educational quality through institutional reforms. Optimizing incentive mechanisms to stabilize faculty teams has become fundamental for enhancing academic standards. This study focuses on private higher education institutions to explore incentive mechanisms and optimization strategies in educational management, integrating two-factor theory and Maslow’s hierarchy of needs framework. Addressing core challenges such as limited career advancement pathways, insufficient research funding, and imbalanced compensation structures, the research proposes: (1) Establishing a tiered evaluation system and interdisciplinary development platforms based on motivational factors, incorporating teaching innovation achievements into professional title assessment criteria; (2) Implementing green salary reforms with a three-tier compensation model combining base pay, flexible performance bonuses, and special awards. This differentiated mechanism that balances material support with psychological incentives effectively promotes faculty career development and institutional innovation, providing theoretical references and practical models for higher education management reform.