One of problem faced by local government in Indonesia was ineffective leadership and low of employee performance in producing output or targeted result. This research examined: influence of leadership and work capability to motivation, behavior and performance of employe, influence of motivation, work behavior to employee performance, influence of leadership, work capability indirectly to employee performance through motivation and work behavior. The amount of 384 respondents are chosen by Multi-Stage Stratified Random Sampling from 9.575 employees in Provincial Government Organization of South Sulawesi. The research used secondary data such as document,and primary data through survey by using questionnaire/research instrument. The collected data was analyzed by Structural Equation Model (SEM). The result of the research showed that: leadership had positive and significant direct influence to the motivation and work behavior, but its direction was negative and insignificant to the employee performance, work capability had positive and significant direct influence through motivation, work behavior and employee performance, motivation had positive and insignificant influence to the employee performance while work behavior had positive and significant direct influence to employee performance, leadership had positive and significant indirect influence to employee performance through motivation and work behavior, and work capability had positive and significant indirect influence to the employee performance through motivation and work behavior. The research concluded with a number of implications for theory and practice of leadership and employee performance in sector public organization.
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