Digital HRM Practices and Employee Engagement: Examining the Direct and Indirect Effects of Technology-Enabled HR Practices

Abstract

Digital tools now touch nearly every stage of the employment relationship — recruitment, learning, performance management, workforce analytics, communication, self-service, and AI-driven HR assistants — reshaping human resource management into what is best described as a socio-technical system rather than a purely administrative function. Scholars, however, remain split on what this shift means for employees: some evidence points toward deeper engagement, while other findings suggest digital HR infrastructures can just as easily produce cognitive fatigue, technostress, and a sense of depersonalization. Drawing on Job Demands-Resources (JD-R) theory and Social Exchange Theory (SET), this study builds an empirical model of how a seven-dimensional Digital HRM bundle shapes employee engagement both directly and indirectly, through the broader construct of Employee Experience (EX).

Digital Literacy is added as a boundary condition that can strengthen or weaken both pathways. Data were collected from 428 employees at knowledge-intensive organizations using a cross-sectional survey design, and the structural model was tested with Partial Least Squares Structural Equation Modelling (PLS-SEM, 5,000 bootstrap resamples). Digital HRM practices showed a direct effect on engagement (β = 0.284, p < 0.001) and a stronger effect on employee experience (β = 0.642, p < 0.001). The indirect path through employee experience was substantial in its own right (β = 0.300, p < 0.001), accounting for just over half of the total effect. Digital literacy also moderated both the direct relationship (interaction β = 0.158, p < 0.001) and the conditional indirect effects. Taken together, the findings extend theory on digital organizational behaviour, offer HR leaders a diagnostic framework for prioritizing investment, raise questions of algorithmic governance, and point toward several directions for longitudinal research.