The Influence of Transformational Leadership and Compensation on Employee Performance Through Work Motivation in The Era of Digitalization PT. Palopo Branch Pawnshop

Abstract

This study aims to analyze the influence of transformational leadership and compensation on employee performance through work motivation in the digitalization era at PT Pegadaian Palopo Branch. The research background is based on the importance of visionary leadership roles and fair compensation in improving employee motivation and performance, especially in the midst of digital change dynamics. This study uses a quantitative approach with a survey method of 100 respondents who are employees of PT Pegadaian Palopo Branch. Data was collected using a questionnaire based on the Likert scale, then analyzed using the Structural Equation Modeling (SEM) method assisted by SmartPLS. The results of the study show that transformational leadership has a significant effect on employee performance, but it does not affect work motivation. On the contrary, compensation has been shown to have a significant effect on both work motivation and employee performance. Work motivation itself has a positive effect on employee performance and acts as a mediator on the relationship between compensation and performance, but does not mediate the relationship between transformational leadership and performance. These findings confirm that a combination of effective leadership and an adequate compensation system is a key factor in driving improved employee performance in the digitalization era.