WHEN INCENTIVES FALL SHORT: LEADERSHIP AND MOTIVATION AS THE REAL ENGINES OF EMPLOYEE PERFORMANCE IN A REGIONAL GOVERNMENT INSPECTORATE

Abstrak

This study examines the effect of leadership, motivation, and incentive on employee performance at Inspektorat Daerah Kota Batam (the Regional Inspectorate of Batam City), Indonesia's local-government internal oversight agency. Regional inspectorates within Indonesia's local government apparatus depend on stable human-resource conditions to sustain oversight and audit quality, yet the relative contribution of leadership, motivation, and incentive to employee performance in such public oversight bodies is rarely disentangled empirically. A quantitative associative design was used, with a census of all 72 employees as respondents. Data were collected through a structured Likert-scale questionnaire and analyzed using multiple linear regression in SPSS 23, following classical assumption testing. The results show that leadership (t = 9.745; p = .000) and motivation (t = 3.353; p = .012) each have a positive and significant partial effect on employee performance, while incentive does not (t = 1.295; p = .136). The three variables jointly explain 95.1 percent of the variance in employee performance (R² = .951; F = 120.116; p = .000). Leadership is the most dominant predictor (β = .436), followed by motivation (β = .257), with incentive contributing only a small and statistically non-significant increment (β = .049). The findings suggest that in this agency, performance is driven principally by leadership quality and employee motivation, while the incentive scheme in its current form does not yet translate into a measurable performance gain, carrying implications for how regional inspectorates structure their reward practices.