<![CDATA[This study aims to explore the impact of the work environment and compensation on employee performance, emphasizing the mediating role of job satisfaction within a public sector context. Employing a quantitative explanatory design with a saturated sampling technique on all employees at the Regional Development Planning Agency (Bappeda) of Malang City, data were analyzed using the Partial Least Squares (SmartPLS) method. The findings reveal that while the work environment does not directly affect employee performance, it significantly impacts job satisfaction; similarly, compensation significantly affects job satisfaction, which ultimately acts as a vital mediating variable translating both work environment and compensation into enhanced employee performance. Although limited by its scope to a single local government agency, the study provides practical implications emphasizing that public sector management must actively foster job satisfaction to ensure workplace conditions and compensation successfully translate into higher productivity. Ultimately, this research contributes to organizational behavior literature by demonstrating that a favorable work environment alone is insufficient to boost performance unless it effectively drives internal job satisfaction.]]>
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