Integration AI in E-HRM and Organizational Performance: The Roles of Effectiveness of HR Decisions and Organizational Culture

Abstract

Objective: This study aims to analyze the influence of Integration AI in e-HRM on Organization Performance through the mediating role of Effectiveness of HR Decisions and examine the role of Organizational Culture moderation in strengthening the relationship between Integration AI in e-HRM and Effectiveness of HR Decisions. This research was developed to explain the mechanism of organizational value creation using Artificial Intelligence (AI) in the practice of electronic Human Resource Management (e-HRM).
Design/Methodology/Approach: This study uses a quantitative approach with a cross-sectional survey design. Data was collected from 200 managers and Human Resource professionals at multinational manufacturing companies in the Riau Islands, Indonesia, who have implemented AI in e-HRM practices. The research model was developed based on the integration of the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) and the Technology–Organization–Environment (TOE) Framework. Hypothesis testing was carried out using Covariance-Based Structural Equation Modeling (CB-SEM) with the help of AMOS.
Results: The results of the study show that the Integration of AI in e-HRM has a positive and significant effect on the Effectiveness of HR Decisions and Organization Performance. The effectiveness of HR Decisions has been shown to have a positive effect on Organization Performance and partially mediates the relationship between Integration AI in e-HRM and Organization Performance. In addition, Organizational Culture has been proven to strengthen the influence of AI Integration in e-HRM on the Effectiveness of HR Decisions. These findings show that AI creates organizational value through direct operational channels and strategic channels that occur through improving the quality of HR decisions.
Theoretical Implications: This study expands the application of UTAUT2 and the TOE Framework in the context of AI-enabled Human Resource Management by explaining the Effectiveness of HR Decisions as the main mechanism linking AI integration with improved organizational performance as well as identifying Organizational Culture as an organizational condition that influences the effectiveness of AI utilization.
Practical Implications: The research findings provide implications for organizations in designing HR digital transformation strategies that not only focus on the adoption of AI technology, but also on improving the quality of HR decisions and strengthening organizational cultures that support innovation, collaboration, and data utilization in decision-making.
Originality: This research offers an empirical model that explains the mechanisms of AI value creation in e-HRM through a combination of direct relationships, mediation, and moderation in one integrated conceptual framework. The study also provides empirical evidence from multinational manufacturing companies in Indonesia, which is still relatively limited in the literature on AI and Human Resource Management.