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Transparency, Algorithmic Fairness, and Employee Performance in AI-Based HR: The Moderating Role of Trust in Management

Muhammad Irvan, Bachrudin Syahroni, Moh. Yudi Mahadianto

View Author Affiliations
  • Muhammad Irvan: Universitas Swadaya Gunung Jati, Indonesia
  • Bachrudin Syahroni: Universitas Swadaya Gunung Jati, Indonesia
  • Moh. Yudi Mahadianto: Universitas Swadaya Gunung Jati, Indonesia
DOI:
https://doi.org/10.59431/ijer.v6i1.729
Published:
March 28, 2026
Pages:
101-115

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Abstract

This study examines how perceived transparency and algorithmic fairness in AI-based human resource (HR) practices relate to employee performance, and whether trust in management moderates these relationships. Data were collected through a quantitative cross-sectional survey of 152 employees from Indonesian service organizations using AI-enabled tools in HR decision processes, and analyzed using partial least squares structural equation modeling (PLS-SEM) with bootstrapping. The results show that perceived algorithmic fairness and trust in management have positive and significant relationships with employee performance, whereas perceived transparency does not have a significant direct effect. Trust in management also strengthens the positive relationship between perceived algorithmic fairness and employee performance, but does not significantly moderate the relationship between perceived transparency and employee performance. These findings suggest that organizations seeking performance benefits from AI-based HR should prioritize fairness governance and trust-building managerial practices, while designing transparency as meaningful, employee-relevant explanations rather than merely technical disclosure.

Keywords

Algorithmic Fairness; AI-Based HRM; Transparency; Trust In Management; Employee Performance; PLS-SEM
Author Biographies
Muhammad Irvan

Universitas Swadaya Gunung Jati

Google Scholar ResearchGate ORCID

Management Study Program, The Faculty of Economics and Business, Universitas Swadaya Gunung Jati, Cirebon City, West Java Province, Indonesia., Indonesia.

Bachrudin Syahroni

Universitas Swadaya Gunung Jati

Google Scholar ResearchGate ORCID

Management Study Program, The Faculty of Economics and Business, Universitas Swadaya Gunung Jati, Cirebon City, West Java Province, Indonesia., Indonesia.

Moh. Yudi Mahadianto

Universitas Swadaya Gunung Jati

Google Scholar ResearchGate ORCID

Management Study Program, The Faculty of Economics and Business, Universitas Swadaya Gunung Jati, Cirebon City, West Java Province, Indonesia., Indonesia.

Article Identifiers
  • Article Title: Transparency, Algorithmic Fairness, and Employee Performance in AI-Based HR: The Moderating Role of Trust in Management
  • DOI: 10.59431/ijer.v6i1.729
  • Publication Date: 2026-03-28
  • Journal: Indonesian Journal Economic Review (IJER)
  • Volume: 6
  • Issue: 1
  • Pages: 101-115
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Issue Information

Article Details

Volume: 6
Issue: 1
Year: 2026
Published: 2026-03-28
Pages: 101-115
Section: Articles
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Irvan, M., Syahroni, B., & Mahadianto, M. Y. (2026). Transparency, Algorithmic Fairness, and Employee Performance in AI-Based HR: The Moderating Role of Trust in Management. Indonesian Journal Economic Review (IJER), 6(1), 101-115. https://doi.org/10.59431/ijer.v6i1.729
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