Enhancing Organizational Performance through AI-Driven HRM Practices and Performance Metrics: Evidence from European Multinational Enterprises
DOI:
https://doi.org/10.24425/mper.2025.156147Abstract
This paper aims to assess the impact of Artificial Intelligence (AI) in the Human Resource Management (HRM) process, particularly in recruitment, retention of employees, and measurement of organizational performance in organizations operating in Multinational Establishments in Europe and listed in the Fortune Global 500. The goals of the study are to explore four propositions: AI-based HRM practices and organizational outcomes, AI-based performance metrics and organizational outcomes, the moderation effect of artificial intelligence on HRM practices and performance metrics on organizational outcomes, and the mediating effect of artificial intelligence as a mediator between HRM practices and performance metrics on organizational outcomes. The research shows that 72% of organizations have sought to implement AI tools for HR operations, which has cut processing time by 40% and boosted employee retention by 18%. Performance metrics linked to artificial intelligence thereby increased productivity by 21.4%, completion rates of projects by 20%, and overall employee engagement by 30.8%. Multinational enterprises can leverage AI-driven recruitment, retention, and performance metrics to boost productivity, reduce employee turnover, and align workforce strategies with organizational goals, fostering sustainable growth and competitive advantage in rapidly evolving business environments.References
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