The Influence of Artificial Intelligence (AI) on Work Engagement and Employee Performance with Digital Leadership as Mediator

The study investigates the influence of Artificial Intelligence (AI) on work engagement and employee performance, emphasizing the mediating role of digital leadership. A quantitative research approach was employed through a survey of 218 employees from digital companies in Indonesia. The sampling method was purposive, targeting individuals with at least one year of experience in AI-utilizing firms. Data were analyzed using Structural Equation Modeling (SEM) via the LISREL application to examine relationships among variables. The results indicate that AI significantly enhances both work engagement and employee performance. Furthermore, digital leadership serves as a significant mediator, amplifying the positive effects of AI. This finding underscores the importance of technology-driven leadership in translating AI capabilities into practical organizational outcomes. This study contributes to the literature on Artificial Intelligence (AI), work engagement, and employee performance by incorporating digital leadership as a mediating variable, addressing a gap in understanding how leadership strengthens the impact of AI utilization. Unlike prior studies that focus primarily on direct effects, this research highlights the pivotal role of leadership in linking AI’s technological potential with tangible outcomes, offering a novel perspective within the Job Demands–Resources (JD–R) theory framework. Based on these findings, managers should prioritize developing digital leadership capabilities and aligning technological advancements with leadership strategies to foster a more engaged and high-performing workforce.