Artificial Intelligence Adoption in Human Resource Management: Implications for Employee Trust and Organizational Effectiveness

Abstract

Artificial Intelligence (AI) is increasingly transforming Human Resource Management (HRM) by changing the recruitment, employee measurement, workforce planning, performance management and decision-making processes. While AI HR systems have several benefits, such as improving process automation, consistency, and data-driven decision-making, there are also some considerations to keep in mind regarding employee trust in the system and its performance within the organization. This research examines the implications of the use of AI in HRM, particularly employees' perceptions regarding algorithmic decision making, transparency, fairness, privacy and human oversight. In sum, the study indicates that employee trust plays a pivotal role as an intermediary between the adoption of AI in HR and organizational effectiveness. When staff members trust that AI systems are accurate, reliable, fair, and can help them make HR-related decisions, they will be more confident in using AI for HR-related decisions and have positive attitudes toward organizational changes. However, there could be problems with surveillance, replacement of jobs, privacy, algorithmic bias, and human touch that may make citizens wary of accepting AI. This study adopts a conceptual research method, building on literature previously published, regarding the topic of AI, Strategic HRM, organizational trust, technology acceptance, and employee behaviours. Its focus is on the responsible governance of AI, the role of employees, explainability, data protection, and human–AI collaboration, as keys to successful AI implementation. The research shows that there is more to it than technology to make an organization effective; it needs to build a reliable and people-centric AI environment. Building trust among employees can help with technology adoption, enhance engagement, aid in decision-making, and help organizations achieve strategic benefits from AI-powered HRM.