Employee performance is a crucial factor in the success of an organization, including in the government sector. This study aims to analyze the effect of compensation and work environment on employee performance, with work motivation as a mediating variable at UPT PBAP Bangil Pasuruan. The research employs a quantitative approach using path analysis. Data were collected through questionnaires distributed to 47 employees using a saturated sampling technique. The results indicate that compensation and work environment positively influence employee performance, both directly and indirectly through work motivation. Work motivation is proven to be a significant mediating variable that strengthens the relationship between compensation, work environment, and employee performance. These findings support Maslow and Herzberg's motivation theories, emphasizing the importance of fulfilling basic needs and motivational factors to enhance employee productivity. The study's implications suggest that organizations should not only focus on improving compensation and work environment but also implement strategies to enhance employee motivation for optimal performance. This study is limited in terms of sample size and research scope; thus, future research is recommended to expand the sample and consider other factors affecting employee performance.