Reflection on hypothesis

48

5. Discussion

The main objective of this study was to investigate how AI capabilities affect employee performance as well as the function of employee engagement as a mediating factor. Leading AI adoption businesses underline that enterprises require a unique combination of tangible, human, and intangible resources to build an AI capacity that adds value by distinguishing itself from their competitors. However, obtaining value from AI investments is more difficult than anticipated due to the paradox that people whose tasks are replaced by AI applications have either a negative or positive attitude toward AI (Mikalef & Gupta, 2021). This study hypothesized that if employees are engaged, this will positively mediate the relationship between AI capabilities and employee performance. Employee engagement might give management guidance on how to effectively enhance an organization's capacity to engage employees with emerging technologies like AI and turn that engagement into employee performance. In the previous chapter, the collected data was used to accept or reject the proposed hypotheses. The results will now be interpreted and compared with prior literature in order to verify if the findings are as expected.

49

finding confirms H1 and is in line with the expectations of Borges et al. (2021), who hypothesized that by strategically implementing AI technology to boost employee engagement, businesses may gain a competitive advantage. Other studies on corporate culture, such as Candelon et al. (2021) and Ransbotham et al. (2021), have shown a substantial association. As a result, this research shows that strategic AI adoption enhances employee engagement through improved AI capabilities. The importance of this notion to employee engagement should not be overlooked by those attempting to properly implement AI. Improving AI capabilities requires investments, but if companies succeed in making these investments, employees will be happier, with teamwork and trust more prevalent. It is important to invest in large amounts of high-quality data that can be stored flexibly, in systems for analyzing data and complex algorithms, as well as in time and financial resources. Additionally, invest in employees with technical AI capabilities, as well as leaders who are knowledgeable and committed to AI and who can launch and organize AI initiatives. Finally, invest in cross-functional teams and the ability to change by being more agile, exploratory, and adaptive. Employees will have a sense of pride that their company and their operations have high-quality AI capabilities. As a result, employees will be more likely to stay with the organization longer (Catteeuw et al., 2007). There will be less resistance to the use of AI if there is a high level of commitment because the capabilities already exist. As a result of AI, the experience of working for a company could change dramatically. People will be proud and happy to work for the company. The paradox that employees whose jobs are taken over by AI applications have a negative attitude towards AI (Mikalef & Gupta, 2021), as well as the manager's concern about cultural resistance, must be overcome.

50

5.1.2 Employee engagement positively associated with employee performance

Employee engagement was thought to have a direct relationship to employee performance.

Employee engagement was found to have a direct and substantial association with employee performance, confirming recent findings by Bailey et al. (2017) that high employee engagement leads to greater individual and organizational performance. According to the conclusions of this study, H2 is therefore supported. Therefore, according to Cook (2008), higher levels of employee engagement result in outperforming rivals in today's ever-competitive market. As a result of their active management and absorption in their job, engaged employees deliver superior results, according to this study (Reijseger et al., 2017). Employees are continually looking for better, more effective methods to contribute value (Catteeuw et al., 2007). Having a committed team is an essential asset for growth; high employee morale leads to higher productivity and better results for all staff members. Committed employees are those who believe in the goals and objectives of their company. Therefore, they are more likely to make the necessary efforts to achieve them, even if it takes extra time. It says that happy employees are more productive employees. Everything about work, such as interactions, the environment, and relationships, can affect employees' happiness.

To maintain this high level of performance, management must ensure that job quality, quantity, and timeliness are clear and appropriate for the personnel. According to AI, these discoveries are also important. If management wants to get the most out of the use of technology, they must implement steps to enhance work quality, quantity, and timeliness in order to promote engagement and hence performance.

5.1.3 AI capabilities positively associated with employee performance

It is hypothesized that AI capabilities will have a direct impact on employee performance. There was a direct and significant relationship between AI capabilities and employee performance,

51

validating Wiljer & Hakim's recent findings (2019). According to the study's findings, H3 is supported since a higher level of AI capabilities really signals improved staff performance.

Wamba-Taguimdje et al. (2020) made a similar argument, stating that AI offers benefits in organizations, particularly in terms of its capacity to improve performance at both the organizational (financial, marketing, and administrative) and process levels. Employees in a company with stronger AI capabilities may focus on higher-value tasks, provide new insights, make more accountable decisions, and so increase employee productivity and efficiency (Jain et al., 2017). As mentioned earlier, increasing AI capabilities requires investment. However, if companies manage to make these specific investments, employees will have more time to focus on higher-level tasks and strategies so that they can improve their performance and make it easier for the company to get the work done. Employees will not only be more engaged, but they will also be more productive, satisfied with the standards of their tasks, more decisive, and provide goods or services on time, all of which will contribute to the organization's intended goals (Nan-Nan et al., 2018). Furthermore, work-related flexibility and autonomy, as well as creativity and innovation, will be fostered, with improved employee performance as a result (Malik et al., 2021).

People will have to do less boring and mind-numbing work. In doing so, employees will be able to do what they are good at, for example, contacting customers or consulting with colleagues. They will have more room to develop within their jobs. The work that has to be done will become human again, and the emphasis will be on creativity, unpredictability, and communication.

5.1.4 The mediating effect of employee engagement

The impact of AI capabilities on employee performance is mediated by employee engagement.

Employee engagement has also been investigated as a mediator in other studies, including perceived organizational support and work satisfaction (Bailey et al., 2017) and

person-52

organization fit and turnover intention (Memon et al., 2014). The results of the study confirm the argument that AI improves employees’ performance (Wiljer and Hakim 2019). This statement brings up the question of whether value is created only through the development of AI capabilities or through the impact that employee engagement may have on those capabilities. After all, engaged employees produce better results for any company because they demonstrate active commitment and absorption in their work (Reijseger et al., 2017). In order to act rapidly and extract benefit from AI, engagement is more likely to be required, especially in a constantly changing competitive AI field. An organization that focuses exclusively on AI development but has no engaged employees would be unable to exploit the benefits of the technology. Employees are usually not the ones who choose a particular AI solution, but they are ultimately the ones who have to work with it. End users can only start using a new way of working once they have familiarized themselves with the technology and fully embraced it. Employees who are engaged are more likely to embrace it because they understand why it can help the business grow and what impact it will have on their jobs and, therefore, how it can improve their performance. If management is aware of this phenomenon, it can increase the profitability of AI deployment by driving employee engagement.

5.1.5 The moderating effect of AI relation

A moderating effect of the AI relationship was also examined, in addition to the mediating impact of employee engagement. Since there is a variation in how AI is employed, either directly or indirectly, the moderating influence between AI capabilities and employee engagement and AI capabilities and employee performance was investigated. H5 was rejected since no significant relationship was discovered, contrary to the prediction. This requires more investigation into the

53

specifics of this relationship. Clarity on the AI relationship may provide management with a better understanding of the differences between different jobs within the organization, allowing them to better target and improve employee performance using AI capabilities.