The manager is someone who is in charge of and responsible for making, managing, leading, and handling the implementation of the plans to achieve a particular target. On the other side, competency is a capability and characteristic owned by the employee, in form of knowledge, skills, and attitudes, and required for completing the duties professionally, effectively, and efficiently. Nowadays, ‘Aisyiyah Islamic Hospital (RSIA) Klaten faces some obstacles due to its slow development and has not pursued any accreditation processes. This study aimed to analyze the factors affecting the performance of manager in RSIA Klaten, Central Java, Indonesia. The investigated parameters were including problems, managerial challenges, and managerial competencies related to leadership skills, financial management, human resource management, equipment and drug management, as well as information system management. The analysis in this study was performed using SEM analysis to test the performance model of hospital managers and hypothetical relationships existed in the model. This study found that the performance of hospital managers was influenced by motivation, commitment, and leadership. Two other factors were proved to have no significant effect, i.e. job satisfaction and organizational culture. Motivation was proved to give the strongest influence on the manager performance, commitment, and leadership skill. commitment, leadership, and motivation, job satisfaction and organizational culture, and competence effect on manager performance. Keywords: Leadership; Motivation; Performance manager.