507 American Journal of Economic and Management Business e-ISSN: 2835-5199 Vol. 4 No. 5 May 2025 The Influence of Physical Work Environment and Transformational Leadership Style on Employee Performance at The Agriculture, Food and Fisheries Office of Pariaman City Alkhairul Asrar1, Ratna Komala Putri2 Telkom University, Indonesia1,2 Email: asraralkhairul@gmail.com1 Abstract This study aims to find out and analyze the conditions of the physical work environment and transformational leadership style in the Agriculture, Food and Fisheries Office of Pariaman City. Furthermore, to analyze the influence of the physical work environment on employee performance and the influence of transformational leadership style on the performance of employees of the Agriculture, Food and Fisheries Service of Pariaman City. This study uses descriptive and quantitative methods. The population in this study is 115 ASN employees at the Agriculture, Food and Fisheries Service of Pariaman City with a sample of 100 employees. The data analysis technique used is Structural Equation Modeling Partial Least Square (SEM-PLS). The results of the study show that the physical work environment has a positive and significant influence on employee performance and transformational leadership style has a positive and significant influence on employee performance. This result is a concern for organizations to be able to create a conducive physical work environment and a good leadership style in order to improve employee performance in the organization. Keywords: physical work environment, transformational leadership style, employee performance, descriptive, quantitative, SEM-PLS INTRODUCTION The performance of employees or employees of a company or organization greatly affects the success of the company or organization in achieving its goals. In order to achieve optimal, effective and efficient performance, companies and organizations will carry out various strategies and steps to optimize various factors that affect the performance of their employees. This is as conveyed which states that one of the factors that determine the progress of business and organization is the ability of the company or organization in managing the performance of its employees because if the organization can manage employee performance brilliantly, it will lead an organization to a path that spreads glory, on the contrary, if employee performance management is carried out falsely, it will bring the organization to the brink of misfortune. Then concluding that performance refers to the results that can be achieved based on the organization's goals, mailto:asraralkhairul@gmail.com Alkhairul Asrar, Ratna Komala Putri 508 implemented legally, complying with the law and in accordance with the moral standards and responsibilities given. Enny (2019) and Farida et al. (2024) explain several factors that affect employee performance including abilities and expertise, knowledge development, work design, personality, work motivation, leadership, leadership style, organizational culture, job satisfaction, work environment, loyalty, commitment, compensation, promotion, and work discipline.(Huseno, 2016)Diamantidis & Chatzoglou (2019) Several studies prove that both physical and non-physical work environments have a significant influence on the performance of an organization's employees such as research from Diamantidis & Chatzoglou (2019), Hurricanes (2020), Pramestiara & Princess (2022), and research. Princess & Priansa (2023)The results of other studies show that the work environment and management support have the strongest impact (direct and indirect) on job performance, while adaptability and intrinsic motivation directly affect job performance. (Chua et al., 2018) In addition to a conducive work environment, leadership style also has an important role in influencing employee performance in an organization or company. According to leadership style, motivation and work discipline have a positive and significant influence on employee performance where the leadership factor is the most dominant factor. Arta et al. (2023)Latifah et al. (2024) In his research, it was found that leadership style and organizational commitment have a positive effect on performance. Furthermore, the results of the study Sürücü et al. (2022) show that transformational leadership style has a significant positive influence on performance. However, research Ewaldy et al. (2022) shows that there is no significant partial influence of leadership style on employee performance. The purpose of this study is to find out and analyze the physical work environment, transformational leadership style, and employee performance at the Agriculture, Food and Fisheries Office of Pariaman City. Then also to find out. Furthermore, it is also to find out and analyze the influence of the physical work environment and transformational leadership style on the performance of employees at the Agriculture, Food and Fisheries Service of Pariaman City. METHOD This study uses descriptive and quantitative methods. Based on the purpose of this study, it is known that in this study three variables are used, namely two independent variables (X) and one bound variable (Y). The independent variables used were physical work environment (X1) and transformational leadership style (X2) and the bound variable was performance (Y). The population determined in this study is all employees with ASN status (Civil Servants/Civil Servants and Government Employees with Employment Agreements/PPPK) at the Agriculture, Food and Fisheries Office of Pariaman City, West Sumatra Province. The total population in this study is 115 people consisting of 102 civil servants and 13 PPPK people. As for this study, the researcher will distribute a questionnaire to 100 respondents. This study uses SEM-PLS data analysis techniques with SmartPLS software version 3. Structural Equation Modeling Partial Least Square (SEM-PLS) is a data analysis method that can be used to measure the relationships between variables simultaneously. Alkhairul Asrar, Ratna Komala Putri 509 Figure 1. Research Framework of Thought H1: Physical work environment affects employee performance H2: Transformational leadership styles affect employee performance RESULT AND DISCUSSION Respondent Characteristics The characteristics of the respondents grouped in this study include gender, age, education and length of work. From the results of the questionnaire distributed to 100 respondents, it is known that the respondents are dominated by the male gender as much as 61% and women as much as 39%. Based on the age range, the most respondents were in the age range of more than 40 years with a percentage of 55%, followed by the age range of 26 to 30 years with a percentage of 21%, 36 to 40 years of age as much as 12%, 32-35 years as much as 11% and the least in the age range of 21 to 25 years as much as 1%. Furthermore, for the education level, the most respondents were undergraduates as much as 61% and the least were high schools as much as 7%. Then based on the working LMA, the majority of respondents have worked for more than 5 years, namely 75% and 25% have only worked for 2 to 5 years. Evaluation of the Outer Model Physical Work Environment (X1) 1. Color 2. Sanitation 3. Temperature 4. Air circulation 5. Lighting 6. Security 7. Peace Fithri et al. (2019) based on Sedarmayanti (2011) Transformational Leadership Style (X2) 1. Idealized influence 2. Inspirational Motivation 3. Intellectual Stimulation 4. Individualized Consideration Robbins and Judge (2024) based on Bass (1990) Employee Performance (Y) 1. Loyalty 2. Work Performance 3. Creativeness 4. Cooperation 5. Skills 6. Responsibility Hasibuan (2002), Astutik (2016),Khaeruman et al. (2021) Alkhairul Asrar, Ratna Komala Putri 510 Convergent Validity Ghozali (2020:71) states that individual indicators that are vaild are indicators with a correlation value above 0.7. Figure 2 shows that the results of the path analysis for the model have niai, most indicators have values above 0.7 except for indicators A4, A5, A7, and A16. Figure 2. Model Path Diagram Source: Author's Data Processing, 2025 Average Variance Extracted (AVE) AVE is the average percentage of the Extracted Variance (AVE) value across all questionnaire items or indicators of a variable which is the sum of converging indicators. Ghozali (2020:71) stated that a valid AVE value must be above 0.5. Table 1. Outer Loading Test Result Variable Dimension Indicators Outer Loading AVE Information Physical Work Environment (X1) Color Colors of the walls of the workspace 0,713 0,525 Valid Colors of objects at work 0,745 Valid Sanitation Workplace hygiene 0,727 Valid Alkhairul Asrar, Ratna Komala Putri 511 Variable Dimension Indicators Outer Loading AVE Information The presence of a cleaning staff who works well 0,659 Invalid Availability of cleaning facilities 0,655 Invalid Temperature Temperature in the workspace 0,714 Valid The air conditioner in the workspace works well 0,688 Valid Air circulation Air circulation in the workspace 0,758 Valid Comfort in breathing 0,838 Valid Lighting Lighting in the workspace 0,836 Valid Sufficient lighting facilities 0,708 Valid Security Warranty safe while working 0,758 Valid Warranty of safe items while working 0,707 Valid Warranty safe from external interference 0,718 Valid Peace Quiet conditions in the workspace 0,826 Valid Absence of noise interference from the outside 0,466 Valid Transformational Leadership Style (X2) Idealized influence Leaders are able to provide vision and mission 0,868 0,679 Valid Leaders are able to instill pride in their subordinates 0,870 Valid Leaders are able to be an inspiration to subordinates 0,847 Valid Leaders are able to earn the respect of subordinates 0,711 Valid Leaders are able to be trusted by subordinates 0,860 Valid Inspirational motivation Leaders are able to motivate subordinates 0,853 Valid Leaders can be a symbol of success for subordinates 0,810 Valid Leaders can express important goals in a simple way 0,847 Valid Alkhairul Asrar, Ratna Komala Putri 512 Variable Dimension Indicators Outer Loading AVE Information Intellectual stimulation Leaders encourage subordinates to continuously improve their abilities 0,903 Valid Leaders encourage subordinates to continue to think rationally in dealing with problems 0,947 Valid Leaders encourage subordinates to be thorough in solving problems 0,792 Valid Individualized consideration Leaders give personal attention to subordinates 0,759 Valid Leaders give personal treatment to subordinates 0,713 Valid Leaders always give directions to each subordinate in completing tasks 0,745 Valid Leaders always give advice to each subordinate in completing tasks 0,796 Valid Employee Performance (Y) Loyalty Employees have a strong determination to be loyal to the organization 0,761 0,675 Valid Officers are willing to be loyal to the organization 0,752 Valid Work Highlights The quality of the work results according to the standards that have been set 0,851 Valid Able to complete all assigned tasks 0,869 Valid Creativeness Able to design a work plan to work more effectively 0,852 Valid Able to create new innovations so that work can be completed more effectively 0,729 Valid Cooperation Always participate in completing group tasks 0,724 Valid Love to work together 0,792 Valid Skills Employees are quick to understand the tasks assigned 0,896 Valid Alkhairul Asrar, Ratna Komala Putri 513 Variable Dimension Indicators Outer Loading AVE Information Employees like to learn new things in order to be better at completing tasks 0,837 Valid Responsibility Always complete tasks and work as well as possible 0,882 Valid Be responsible for the work generated 0,866 Valid Always be on time to complete tasks 0,842 Valid Source: Data Processing by the Author, 2025 Table 1 shows that all indicators have an AVE value above 0.5 so that it can be concluded that each indicator that has a loading factor value above 0.7 and AVE above 0.5 on the variables of physical work environment, transformational leadership style and employee performance are valid and can reflect each variable. Discriminant Validity Discriminant validity can be measured through heterotrait-monotrait (HTMT) and cross loading. Ghozali (2020:71) explained that the cross loading value for each variable must be below 0.9 so that the data can be said to be valid. The results of the processing using the SEM-PLS test show that all variables have an HTMT value below 0.9 so that all variables in this study can be concluded to be valid as shown in table 2. Table 2. HTMT Discriminant Validity Test Result Transformational Leadership Style Employee Performance Physical Work Environment Transformational Leadership Style Employee Performance 0,510 Physical Work Environment 0,394 0,467 Source: Data Processing by the Author, 2025 Cross loading tests were carried out to determine the correlation of each indicator to its construct. Ghozali (2020:71) explained that the value of the indicator coefficient above 0.70 indicates that each indicator has a higher correlation to its construct than other constructs. So that indicators other than A4, A5, A7 and A16 can be accepted based on the results of the discriminant validity test using cross loading as shown in table 3. Table 3. Cross Loading Discriminant Validity Test Result Indicators Transformational Leadership Style Employee Performance Physical Work Environment A1 0.303 0.330 0.713 A2 0.155 0.283 0.745 A3 0.190 0.248 0.727 A4 0.289 0.318 0.659 A5 0.253 0.255 0.655 A6 0.284 0.276 0.714 Alkhairul Asrar, Ratna Komala Putri 514 Indicators Transformational Leadership Style Employee Performance Physical Work Environment A7 0.213 0.235 0.688 A8 0.379 0.421 0.758 A9 0.299 0.351 0.838 A10 0.307 0.415 0.836 A11 0.325 0.421 0.708 A12 0.246 0.354 0.758 A13 0.233 0.338 0.707 A14 0.199 0.241 0.718 A15 0.310 0.371 0.826 A16 0.388 0.276 0.466 B1 0.868 0.528 0.425 B2 0.870 0.399 0.351 B3 0.847 0.376 0.326 B4 0.711 0.432 0.262 B5 0.860 0.500 0.296 B6 0.853 0.432 0.277 B7 0.810 0.456 0.354 B8 0.847 0.346 0.238 B9 0.903 0.505 0.382 B10 0.947 0.507 0.307 B11 0.792 0.599 0.321 B12 0.759 0.263 0.279 B13 0.713 0.240 0.220 B14 0.745 0.276 0.351 B15 0.796 0.265 0.330 C1 0.458 0.761 0.357 C2 0.426 0.752 0.359 C3 0.451 0.851 0.342 C4 0.424 0.869 0.414 C5 0.457 0.852 0.391 C6 0.480 0.729 0.340 C7 0.509 0.724 0.257 C8 0.460 0.792 0.447 C9 0.402 0.896 0.374 C10 0.425 0.837 0.376 C11 0.320 0.882 0.393 C12 0.402 0.866 0.444 C13 0.336 0.842 0.359 Source: Data Processing by the Author, 2025 Reliability Test The reliability test is useful to determine the level of consistency of the data obtained from respondents. The test in this study used Cronbach's alpha and composite reliability tests. The coefficient value of each variable must be above 0.7 for both Cronbach's alpha and composite reliability (Ghozali, 2020). Alkhairul Asrar, Ratna Komala Putri 515 Table 4. Cronbach's Alpha and Composite Reliability Test Results Cronbach's Alpha Composite Reliability (Rho_A) Composite Reliability (Rho_C) Average Variance Extracted (AVE) Conclusion Transformational Leadership Style 0.966 0.978 0.969 0.679 Reliable Employee Performance 0.959 0.960 0.964 0.675 Reliable Physical Work Environment 0.938 0.945 0.946 0.525 Reliable Source: Data Processing by the Author, 2025 The results of Cronbach's alpha and composite reliability tests show that all variables have values above 0.7 as can be seen in table 4 so that it can be concluded that all variables can meet the criteria of high reliability or that the data obtained has high consistency. Inner Model Evaluation R-Square A determination indicator used to find out and evaluate the extent to which dependent variables are influenced by independent variables through R-square values. The higher the R- square value indicates that the prediction model used is getting better.(Iba & Wardhana, 2023:509) Table 5. R Square Test Result R-square R-square adjusted Employee Performance 0.352 0.339 Source: Data Processing by the Author, 2025 Ghozali (2021) explained the criteria of R-squre that have a value above 0.67 means strong, 0.33 to 0.67 in the moderate category and below 0.33 are categorized as weak. The results of the R-Square test of the performance variable as shown in table 5 showed a value of 0.352 (moderate). A value of 0.352 means that 35.2% of employee performance is influenced by the physical work environment and transformational leadership style, while 64.8% of employee performance is influenced by other factors outside of the research variables. Effect Size (F square) This test is used to determine the quality of the model made. The f-square value is used to see the influence of independent variables on dependent variables substantially. Table 6. F-Square Test Result Variable Employee Performance Transformational Leadership Style 0.220 Physical Work Environment 0.118 Source: Data Processing by the Author, 2025 It can be seen in table 6 that the f-square value of transformational leadership style on employee performance is 0.22 (moderate influence). Furthermore, the physical work environment variable also has a low influence on employee performance with a value of 0.118. Alkhairul Asrar, Ratna Komala Putri 516 Prediction relevance (Q square) This test is used to find out how much the model can predict the value produced. The Q- square value above 0.35 is categorized as large, 0.15 to 0.35 is categorized as medium and below 0.15 is categorized as low. Table 7. F-Square Test Result Dependent Variable Q²predict Employee Performance 0.277 Source: Data Processing by the Author, 2025 The test results can be seen in table 7 showing that the q-square value is as high as 0.277 which can be categorized as moderate. So it can be concluded that the model created has a moderate predictive level, which means that 27.7% of variations in employee performance can be predicted by the model and the other 72.3% cannot be predicted by the model. Hypothesis Testing Ghozali (2021) explained that a hypothesis is acceptable if the T value ≥ 1.96 with a p value < 0.05. Through bootstrapping on smartPLS4, the results of the hypothesis test as shown in table 8 were obtained. Table 8. Hypothesis Test Result Original sample (O) T statistics (|O/STDEV|) P values Result Conclusion Physical Work Environment - > Employee Performance 0.300 3.039 0.002 Significant Accepted hypotheses Transformational Leadership Style -> Employee Performance 0.410 4.075 0.000 Significant Accepted hypotheses Source: Data Processing by the Author, 2025 The results of the hypothesis test show that: a. Hypothesis 1 (H1): The physical work environment has an influence on employee performance because it has a statistical t-value of 3.039 (>1.96) and a p value of 0.002 (<0.05) with a coefficient value of 0.30 (positive) so that it can be concluded that the physical work environment has a positive and significant influence on employee performance. b. Hypothesis 2 (H2): The transformational leadership style has an influence on employee performance because it has a statistical t-value of 4.075 (>1.96) and a p value of 0.000 (<0.05) with a coefficient value of 0.41 (positive) so it can be concluded that the transformational leadership style has a positive and significant influence on employee performance. The Influence of the Physical Work Environment on Employee Performance The results of the study show that the physical work environment at the Agriculture, Food and Fisheries Office of Pariaman City has a positive and significant influence on employee performance. This can be seen in the results of the hypothesis test where the statistical t-value is 3.039 (>1.96) and the p value is 0.002 (<0.05) with a coefficient value of 0.30 (positive). This Alkhairul Asrar, Ratna Komala Putri 517 means that 30% of the performance of employees at the Agriculture, Food and Fisheries Office of Pariaman City is influenced by their physical work environment such as air circulation, room temperature, cleanliness or sanitation and others according to the dimensions and variables used in this study. The results of the study Hurricanes (2020) show that factors such as the work environment and work placement have a positive effect on the performance of employees or employees of the company. Pramestiara & Princess (2022) stating that there is an influence between the work environment on performance, then there is an influence between work motivation on employee performance and there is a joint influence between the work environment and work motivation on employee performance. Furthermore, the research obtained results that the influence of the work environment and work motivation on employee performance and these influences are also reciprocal. In addition, it was found that the physical work environment had no significant effect on performance.Princess & Priansa (2023)Febriyani & Putri (2024) The Influence of Transformational Leadership Style on Employee Performance The results of the study show that the transformational leadership style at the Agriculture, Food and Fisheries Office of Pariaman City has a positive and significant influence on employee performance. This can be seen in the results of the hypothesis test where the statistical t-value is 4.075 (>1.96) and the p value is 0.000 (<0.05) with a coefficient value of 0.41 (positive). From these results, it can also be interpreted that 41% of employee performance at the Pariaman City Agriculture, Food and Fisheries Office is influenced by transformational leadership styles such as leaders are able to provide vision and mission, leaders are able to motivate subordinates, leaders encourage subordinates to continue to improve their abilities, and leaders pay personal attention to subordinates and others according to the dimensions and variables used in this study. The results of Sinaga et al.'s (2018) research show that change management, organizational culture, transformational leadership style have the most influence on employee performance and transformational leadership style. Furthermore, Latifah et al. (2024) in their research found that leadership style and organizational commitment have a positive effect on performance. Furthermore, the results of the study from Sürücü et al. (2022) show that transformational leadership styles have a significant positive influence on performance. CONCLUSION This researcher shows that the physical work environment has a positive and significant influence on employee performance. Furthermore, transformational leadership styles also have a positive and significant influence on employee performance. Based on these results in good human resource management, it can be recommended to organizations to be able to create a cohesive physical work environment and apply a strong transformational leadership style. The physical work environment includes improvements related to room color, sanitation, room temperature, air circulation, lighting, safety and tranquility of the work environment. In addition to the physical work environment, organizations also need to strengthen the application of transformational leadership styles including the dimensions of idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. The author admits that there are still many shortcomings and limitations in this study, including the factors discussed and considered in this study are only limited to physical work environment factors as well as transformational leadership styles and SEM PLS analysis methods only. There are still other factors that have an Alkhairul Asrar, Ratna Komala Putri 518 influence on performance such as individual ability, organizational culture, compensation and others and can use other relevant analysis methods. 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BPRS Bangun Drajat Warga (BDW) Yogyakarta. Universitas Pembangunan Nasional “Veteran.” Copyright holders: Alkhairul Asrar, Ratna Komala Putri (2025) First publication right: AJEMB – American Journal of Economic and Management Business https://doi.org/10.32479/irmm.7081