The Impact of AI-Driven HR Practices on Employees' Trust and Engagement

Abstract

This study explores the rapid transformation of Artificial Intelligence (AI) in Human Resource Management (HRM). The changes have enabled data-driven recruitment, personalized training, predictive workforce analytics, and the transformation of organizational processes. This study aims to examine how AI advancements enhance efficiency and decision-making, while raising concerns about fairness and employees’ well-being. It investigates the impact of AI-driven HR practices on employees’ trust and engagement, while linking Social Exchange and Self-Determination theories as guiding frameworks. Data were collected from 230 respondents of various organizations autonomous in HR, across several countries worldwide, including KSA, UAE, Pakistan, China, and others (Qatar, Afghanistan, Kuwait, Iran, Bahrain, and Taiwan). The study's findings reveal that Employees respond positively to AI-enabled HR, likely due to its personalization, efficiency, and reduced prejudice. Trust is typically positive in organizational research; however, it produced an adverse indirect effect. The findings of this study suggest that employees may “trust the system” yet feel separated, underscoring the importance of balancing efficiency with human connection. AI-driven HR strongly develops Employee Trust; however, its direct impact on engagement is negative.