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This study aims to determine the direct and indirect effect of a hospital quality standard system of the Indonesian Commission for Hospital Accreditation (KARS) on the performance of dr. Zainoel Abidin Regional Public Hospital (RSUZA) through the mediating role of employee competence. The population of this study is 1,161employees. The number of research sample is 298 employees. Sampling in this study is conducted with a minimum sample formulation using the Slovinformula. Data is collected by distributing closed question sheets (questionnaires) to all employees. The data is analyzed using SEM (Structural Equation Modeling) analysis techniques with the help of the AMOS 22 program. The result shows that KARS standard system has a significant effect on employee competence, KARS standard systemhas a significant effect on the performance, employee competence has a significant effect on performance, and employee competence has a mediation role in increasing the effect of KARS standard systemon the performance of RSUZA. These results contribute to the update the causality theories especially in management field, and also can be a reference for the practical persons especially the managers in RSUZA in developing their strategy. The limitation resides in the amount of variables that are only three, and also with the one object only. The originality lies in the model that combines several models from the previous ones, and uses SEM as the analysis method. Keyword: KARS standard system, employee competence, performance.

THE EFFECT OF KARS STANDARD SYSTEM ON EMPLOYEE COMPETENCE AND ITS IMPACT ON PERFORMANCE : STUDY IN RSUZA