This study aims to determine and analyze the effect of compensation and work environment on employee performance, both partially and simultaneously, at PT. Sarana Sumber Tirta Cirebon. The background of this research is based on indications of problems in employee attendance levels and production target achievement that have not been optimal, suggesting a relationship with compensation and work environment conditions in the company. This study employs a quantitative approach with a survey method through the distribution of Likert-scale questionnaires (1–5) to the entire population of 116 employees. Data analysis techniques include validity tests, reliability tests, classical assumption tests (normality, heteroscedasticity, and multicollinearity), and multiple linear regression analysis using IBM SPSS Statistics version 25. The results showed that compensation has a negative and significant effect on employee performance (t = -5.452; p = 0.000), while the work environment has a positive and significant effect on employee performance (t = 6.044; p = 0.000). Simultaneously, compensation and work environment significantly affect employee performance (F = 56.082; p = 0.000), with a contribution of 48.9% to the variation in employee performance, while the remaining 51.1% is influenced by other factors outside this study. These results indicate that the work environment is the variable that provides the most dominant contribution to employee performance in this manufacturing company.
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