Work Motivation and Digital Competence as Drivers of Employee Performance at PT PAL Indonesia

Purpose: This study analyzes the direct effects of work motivation and digital competence on employee performance at PT PAL Indonesia, a state owned maritime defense manufacturer undergoing digital transformation. Research Methodology: The study used thesis data from a quantitative explanatory cross sectional survey. From a population of 1.410 employees, 70 respondents participated voluntarily through purposive sampling. Data were collected with a five point Likert questionnaire and analyzed with partial least squares structural equation modeling and bootstrapping with 5.000 subsamples. The two direct paths were interpreted within the broader thesis model, which controls for transformational leadership and job satisfaction. Results: Work motivation did not significantly affect employee performance (β=.078, t=0.403, p=.687, f²=.004), whereas digital competence had a positive and significant effect (β=.730, t=5.539, p<.001, f²=1.080). The structural model explained 85.1% of the variance in performance (Q²=.822). Conclusions: Willingness to work does not automatically produce output when tasks require technical capability and effective use of digital systems, whereas digital competence is the most immediate driver of work quality, timeliness, and effectiveness. Limitations: The small voluntary sample, cross sectional design, self reported performance, and incomplete discriminant validity limit generalization and causal inference. Contributions: The study clarifies the relative importance of capability and motivation in a digitalized defense industry and supports job based digital development combined with sustained motivation.