Effect of Compensation and Work Environment on Employee Performance (Study at PT Segar Murni Utama, Mojokerto Regency) Bambang Raditya 1 , Meithiana Indrasari 2 , Agus Surya 3, Maulida Hirdianti Bandi 4 {bambang.raditya.purnomo@unitomo.ac.id 1 , meithiana.indrasari@unitomo.ac.id 2 , agus.surya@unitomo.ac.id 3 } 1,2,3,4 Fakultas Ekonomi dan Bisnis, Universitas Dr. Soetomo, Surabaya, Indonesia Abstract. The purpose of this study is to test and analyze the effect of compensation and work environment on employee performance on the Dept. Production and Dept. Processing PT Segar Murni Utama Kab. Mojokerto. The sampling technique in this study used a saturated sampling technique in which all members of the population were sampled with a total of 60 people. And the analysis technique used is the Partial Least Square (PLS) technique. The results of this study are that proper compensation and a good work environment can improve employee performance on the Dept. Production and Dept. Processing PT. Segar Murni Utama Kab. Mojokerto. Keywords: Employee performance, compensation, work environment, Partial Least Square. 1. Introduction The success of a company is greatly influenced by the performance of its employees. According to Sutiadi [1], performance is a result of work achieved by a person in carrying out tasks assigned to him based on skills, experience, sincerity and time. Whereas Suprayetno and Brahmasari [2] suggest that performance is the achievement of organizational goals which can be in the form of quantitative or qualitative output, creativity, flexibility, reliability, or other things desired by the organization. It can be concluded that employee performance is the result of work achieved by someone in carrying out the tasks assigned to him. Giving compensation is one of the implementations of HRM functions relating to all types of individual awards in exchange for performing organizational tasks. Sengkang according to Hasibuan [3], compensation policies both the size, composition and time of payment can encourage work passion and desire of employees to achieve optimal performance so as to help realize the company's goals. It can be concluded that compensation is a form of remuneration received by employees. Providing better compensation will encourage employees to work better and more productive. This means that employees use knowledge, skills, energy and time in devoting themselves to the company, the purpose of which is to expect rewards or rewards for the results that have been given. Other businesses to improve employee performance include paying attention to the work environment of employees. A conducive work environment must be created by the leadership of the company. Employees can carry out their work properly if supported by the conditions of the work environment that are appropriate. The work environment is everything that is around workers, which can affect themselves in carrying out their tasks (Nitisemito, 1996). In other ACHITS 2019, July 30-31, Surabaya, Indonesia Copyright © 2019 EAI DOI 10.4108/eai.30-7-2019.2287822