Impact of Artificial Intelligence (AI) Adoption on Employee Competence and Organizational Performance: The Moderating Role of Digital Leadership

Abstract

This study examines the impact of artificial intelligence (AI) adoption on employee competence and organizational performance, with digital leadership as a moderating variable. Using a quantitative approach with hierarchical moderation regression method, data were collected through structured questionnaires distributed to 210 employees across technology and banking companies in Indonesia. The results indicate that AI adoption significantly and positively affects both employee competence (β = 0.423, p < 0.01) and organizational performance (β = 0.381, p < 0.01). Furthermore, digital leadership significantly moderates the relationship between AI adoption and organizational performance (β = 0.267, p < 0.05), demonstrating that strong digital leadership amplifies the positive effect of AI adoption on performance outcomes. The findings contribute to the human resource management literature by highlighting the strategic importance of cultivating digital leadership capabilities when implementing AI-driven transformations. Organizations are recommended to invest concurrently in AI infrastructure and digital leadership development programs.