<![CDATA[General Background Human resources play a critical role in optimizing workforce performance to achieve business objectives, where organizational goals rely on operational activities executed by employees. Specific Background This study examines workforce challenges at PT. Karya Mitra Teknik Forklift Sidoarjo, where operational observations and interviews revealed that 37% of employees experienced competence-related issues and 40% faced work environment complaints affecting comfort and task execution. Knowledge Gap Although human resource capabilities dictate operational success, detailed assessments evaluating how specific competence dimensions and work environment conditions drive performance indicators utilizing combined analytical models require continuous investigation. Aims This study aims to determine whether competence and work environment affect employee performance and to identify top priority indicators for improvement. Results Utilizing Partial Least Square-Structural Equation Modeling (PLS-SEM) and Importance Performance Analysis (IPA), the findings indicate that competence and the work environment significantly affect employee performance with competency T-values of 2.54 and work environment T-values of 3.54, identifying competency indicator X1.1 and work environment indicator X2.2 as top priorities for improvement in quadrant I. Novelty This work integrates structural equation modeling with importance-performance matrices to pinpoint exact operational priorities for heavy equipment service personnel. Implications These findings establish that structured improvements in worker competencies and workplace spatial layouts are essential for maximizing task execution and organizational productivity. Highlights: Competence and work environment significantly affect employee performance, with statistical T-values exceeding critical thresholds. Priority improvements center on employee timeliness and the availability of supportive workspaces. Combined PLS-SEM and IPA methods effectively establish performance relationships and guide operational corrective actions. Keywords: Employee Performance, Partial Least Square-Structural Equation Modeling, Importance Performance Analysis, Competence, Work Environment]]>
