This study examines the influence of work environment and work discipline on employee performance at the Regional Financial and Asset Management Agency in Lubuklinggau City, with internal motivation as a moderating variable. Using a quantitative approach, data from 67 employees were analysed through Moderated Regression Analysis (MRA). The results show that work environment and work discipline jointly explain approximately 70.7% of the variance in employee performance, with the work environment emerging as the more dominant predictor. Internal motivation was found to significantly strengthen the effect of both work environment and work discipline on performance, confirming its role as a moderating variable and underscoring the substantial contribution of psychological factors alongside physical working conditions. These findings suggest that local government agencies should pair improvements in physical working conditions and disciplinary enforcement with deliberate strategies to build employee internal motivation, such as merit-based recognition and career-development opportunities, to strengthen human-resource governance and sustain performance gains.
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