How AI-Enabled HRM Practices Enhance Employee Sustainable Performance: The Roles of Trust in AI and Technology Readiness

Abstract

Objective: This study investigates the influence of artificial intelligence (AI)-enabled human resource management (HRM) practices on employee sustainable performance, while examining the mediating role of trust in AI and the moderating role of technology readiness. Drawing upon the technology acceptance model and the unified theory of acceptance and use of technology (UTAUT), this research explores how employees’ psychological trust in AI-driven HRM systems and their predisposition toward technology collectively shape the relationship between AI-enabled HRM practices and sustainable employee outcomes across diverse industries in Pakistan.

Design/methodology/approach: The study included a cross-sectional quantitative survey of 310 employees from Pakistan's manufacturing, supply chain, healthcare, technology, and finance sectors. The data was analyzed using PLS-SEM with Smart PLS 4.8.0, and predefined measurement criteria were utilized to assess validity and reliability. The structural model investigated direct, mediating, and moderating effects using bootstrapping techniques.

Findings: The AI-enabled HRM practices considerably boost employee consistent and sustainable performance (β = 0.498, p < 0.001), and faith in AI strongly mediates this relationship (β = 0.134, p < 0.01). where, technology readiness does not strongly mitigate the connect (β = −0.025, p > 0.05). Hence, the employee trust—rather than technological prowess is the key to having long-term performance advantages from AI-enabled HRM.

Practical implications: By include trust as a mediator and technical preparedness as a moderator in the relationship between employee sustainable performance and AI-enabled HRM practices, this study contributes. It provides scholarly and useful guidance on implementing AI-driven HRM in developing countries.

Originality/value: This study offers new insights for implementing AI-driven HRM in underdeveloped economies by incorporating technology readiness as a moderator and trust as a mediator between AI-enabled HRM practices and employee sustainable performance.

Keywords: AI-enabled HRM, Employee Sustainable Performance, Trust in AI, Technology Readiness, PLS-SEM, Pakistan