The Effect of Digital Transformation and Sustainable Leadership on Sustainable Employee Performance through Human Capital Sustainability
DOI:
https://doi.org/10.70550/joseb.v3i3.717Keywords:
Digital Transformation, Sustainable Leadership, Human Capital Sustainability, Sustainable Employee Performance, PLS-SEMAbstract
Objectives: This study analyses the effect of Digital Transformation and Sustainable Leadership on Sustainable Employee Performance, with Human Capital Sustainability as a mediating variable, among employees of the Payment System Operations Department (DPSP) of Bank Indonesia. The study responds to a performance paradox in which annual KPI realisation consistently exceeds 90 per cent while employee burnout rose to 34.8 per cent in 2023.
Methodology: A quantitative survey design was applied. Data were collected through a structured questionnaire measured on a five-point Likert scale from 129 respondents drawn from a population of 328 DPSP employees, and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) with SmartPLS, covering the measurement model, the structural model, and indirect effects through bootstrapping.
Finding: Digital Transformation has a positive and significant effect on Sustainable Employee Performance and on Human Capital Sustainability. Sustainable Leadership also has a positive and significant effect on both variables, with the strongest path found in Sustainable Leadership on Human Capital Sustainability. Human Capital Sustainability significantly affects Sustainable Employee Performance and mediates the effects of both Digital Transformation and Sustainable Leadership. All seven hypotheses are supported.
Conclusion: The success of digital transformation depends not only on technology adoption but also on the organisation's capacity to sustain leadership quality and human capital. Human Capital Sustainability functions as the mechanism that translates digital transformation and sustainable leadership into sustainable employee performance.
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