The Effects of Digital Technology Adoption, Data and Information Quality, and KPI Utilization on Employee Performance

Abstract

Digital transformation is reshaping performance management by enabling organizations to integrate technology, reliable data, and Key Performance Indicators (KPI) into more objective and data-driven employee performance assessment. However, the extent to which digital technology adoption, data and information quality, and KPI utilization contribute to employee performance requires empirical examination. This study examines the effects of digital technology adoption, data and information quality, and KPI utilization on employee performance among employees of Rural Banks that use digital-based KPI systems. Data were collected from 400 respondents using a structured questionnaire and analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The results indicate that digital technology adoption has a positive and significant effect on employee performance, while data and information quality also has a positive and significant effect on employee performance. KPI utilization likewise has a positive and significant effect on employee performance. The three independent variables jointly explain 80.1% of the variance in employee performance (R² = 0.801; adjusted R² = 0.799). These findings demonstrate that integrating digital technology, high-quality data and information, and effective KPI utilization can strengthen data-driven performance management and support improved employee performance.