The Effect of Algorithmic Performance Appraisal on Employee Trust in Digital and Technology-Based Companies
DOI:
https://doi.org/10.62504/jimr1491Keywords:
Algorithmic Performance Appraisal, Employee Trust, Procedural Fairness, HR Technology, Organizational Justice TheoryAbstract
This study examines how employees perceive and trust Algorithmic Performance Appraisal (APA) in digital-native and technology-driven companies. Adopting Organizational Justice Theory, the Trust in Technology Framework, and Cognitive Appraisal Theory, the research explores both the direct and indirect effects of APA on employee trust, with Perceived Procedural Fairness (PPF) as a mediating variable. The study uses a quantitative, cross-sectional approach, collecting data from 200 employees in technology-based organizations and analyzing the data with Partial Least Squares Structural Equation Modeling (PLS-SEM). Results show that APA significantly enhances both procedural fairness and employee trust, with PPF playing a partial mediating role in this relationship. These findings underscore the importance of transparency, procedural legitimacy, and avenues for employee voice in cultivating trust in algorithmic systems. The study’s theoretical contribution lies in its integration of multiple perspectives on trust and fairness within algorithmic HR management. The practical implication calls for the careful design and implementation of APA systems that employees perceive as fair and trustworthy. Future research should investigate these relationships in longitudinal and multi-contextual settings to deepen the understanding of trust dynamics in evolving AI-mediated work environments.
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Copyright (c) 2026 Rini Anisyahrini, Winne Wardiani, Azizun Kurnia Ilahi, Anita Asnawi, Mochammad Arfani (Author)
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