EXPLORING THE IMPACT OF DIGITAL EMPLOYEE ENGAGEMENT PRACTICES ON ORGANISATIONAL PERFORMANCE IN SMES: AN EMPIRICAL STUDY

Abstract

The current research examines the influence of digital HRM practices on employee engagement and organizational performance within SMEs operating in the IT industry in Bangalore. A well-structured questionnaire was distributed among 300 respondents with the following factors: requesting leaves, recruitment and induction, recognition, and administrative efficiency. From the descriptive statistics, it is evident that most of the respondents had positive attitudes towards digital HRM, as more than 75% agreed or strongly agreed that digital HRM made the HR processes simpler. The reliability test showed high consistency in the survey (Cronbach’s alpha = 0.953). The correlation analysis shows a significant relationship between digital HRM and employee engagement (r = 0.853, p < .001), as well as between engagement and organizational performance (r = 0.816, p < .001). The regression analysis results reveal that digital HRM, engagement, and effectiveness account for 76.5% of the variation in organizational performance; all independent variables are significant. The results show that digital HR processes do not only make things more accessible and communicative but also encourage employee recognition and efficiency, leading to better organizational performance. Nonetheless, the existence of a large neutral zone indicates the need for increased awareness and training for maximum utilization of the potential of adopting digital HR practices. This study illustrates the strategic significance of digital HRM in engaging, being productive, and being successful in organizations.