AI-Augmented HRM Practices as Mediators of Sustainable Performance in the IT Industry: The Role of Digital Culture, Organizational Strategy, and Digital Leadership

Abstract

The increased pace of Artificial Intelligence (AI) has reinvented human resource management (HRM) and made a difference in the approach organizations to gain, grow and sustain talents. This research study explores the relationship between Digital Culture (DC), Organizational Strategy (OS), and Digital Leadership (DL) on Sustainable Organizational Performance (SOP), with AI-Augmented HRM (AIHRM) as a moderating variable. Following a quantitative research approach, data were collected from employees of selected IT companies in Nepal using a questionnaire with predefined items. Furthermore, Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to evaluate both measurement and structural models for reliability, validity, and model fit. The findings reveal that DC, OS, and DL have significant and positive effect on AIHRM, collectively explaining 62.8% variance (R² = 0.628). Similarly, these predictors, along with AIHRM, account for 56.3% variance in SOP (R² = 0.563). Among all the predictors, OS has the strongest effect on SOP (β = 0.332, p < 0.001), which is followed by DC (β = 0.314, p < 0.001) and DL (β = 0.234, p < 0.001). AIHRM positively, though small, directly influences SOP (β = 0.122, p < 0.001) and is a good partial mediator between organizational variables and sustainability performances.