Analyzing the Effect of Competence and Servant Leadership on Employee Performance Through Motivation

This study investigates the influence of competence and servant leadership on employee performance, with motivation acting as a mediating variable. Anchored in Goal Setting Theory and Social Motivation Theory, the research examines how internal capabilities and leadership behavior shape performance outcomes in a public utility organization. The empirical context is Perumda Air Minum Panca Mahottama in Klungkung Regency, Bali, which has shown persistently low performance ratings despite increased internal training efforts. Using a quantitative explanatory approach, data were collected from 174 employees through structured questionnaires and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results reveal that both competence and servant leadership significantly enhance employee performance, directly and indirectly through motivation. Motivation serves as a psychological mechanism linking individual potential and leadership behavior to performance. These findings offer theoretical insights into HRM practices in the public sector and provide practical implications for improving employee outcomes in service-oriented enterprises aligned with Sustainable Development Goals (SDGs).