Digitalizing HR factors: a mediated model of employee psychological wellbeing for employee engagement

Abstract

Digitalization has a significant impact on all areas of life. Similarly, digitization has compelled human resource management to shift from conventional practices to modern information technology management. Therefore, the current research aimed to examine the impact of digital HRM practices on employee engagement, both directly and indirectly through employees' psychological well-being. Data were collected from 401 HR professionals working across various service-sector firms using purposive sampling. The hypotheses were tested using a quantitative, covariance-based approach in IBM SPSS AMOS version 22.0. The study conducted an explanatory factor analysis and found five sub-constructs (higher-order) for “digital HRM”. In contrast, the remaining factors were found in the first order. The hypotheses were significant and positively influenced employee engagement. Likewise, employee psychological well-being partially mediates the relationship between digital HRM and employee engagement. This study extends the HRM and employee engagement literature by examining digital HRM as a higher-order organizational capability and by explaining how employee psychological well-being mediates the relationship between digital HRM and employee engagement. Unlike prior studies that primarily focused on traditional HR practices, the study demonstrates how digitally enabled HR systems influence employee engagement through psychological mechanisms.