The Influence of Digital Human Resource Management Functions on Employee Retention: A Study of Digital Attendance, Online Performance Appraisal, and Electronic Payroll Systems

Didit Darmawan

Authors

Didit Darmawan Universitas Sunan Giri Surabaya

Keywords:

digital attendance, online performance appraisal, electronic payroll, employee retention, digital surveillance, service sector

Abstract

This study aims to examine the effect of digital attendance systems, online performance appraisal systems, and electronic payroll systems on employee retention in service sector companies in Surabaya. The study employed a quantitative approach with a cross-sectional design. The sample consisted of 154 employees from eight service sector companies in Surabaya selected using purposive sampling. Data were collected through an online Likert-scale questionnaire and analyzed using multiple linear regression. The results showed that all three digital HRM variables, partially and simultaneously, had a negative and significant effect on employee retention. The online performance appraisal system had the most dominant negative contribution, followed by digital attendance systems, and then electronic payroll systems. These findings indicate that excessive digitalization of HR functions without considering employees' psychological needs can become a double-edged sword that actually reduces employees' intention to stay. This study recommends that companies balance digital efficiency with humanistic values such as flexibility, personal dialogue, and humane treatment in talent management.

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