The Impact of Digital Ethics and Data Privacy Practices on Employee Trust in E-HRM Systems

Abstract

This study investigates the complex relationship between an organization's adherence to Digital Ethics and Data Privacy Practices and the resulting level of Employee Trust in E-HRM Systems (Electronic Human Resource Management). As organizations increasingly migrate sensitive personnel data and critical HR functions onto digital platforms, concerns surrounding data security, algorithmic bias, and the ethical use of employee information have become paramount. Drawing on Social Exchange Theory and the Technology Acceptance Model (TAM), this research proposes a conceptual framework where robust Digital Ethics policies and transparent Data Privacy Practices act as critical antecedents to foster employee trust, which, in turn, influences the perceived usefulness and adoption of E-HRM systems. A quantitative research design was employed, collecting data from a sample of 785 employees across diverse industries in Pakistan and the UAE who regularly interact with E-HRM systems between 2022 and 2023. Structural Equation Modelling (SEM) was utilized, leveraging SPSS (Statistical Package for the Social Sciences) for initial data screening and descriptive statistics, and AMOS (Analysis of Moment Structures) for confirmatory factor analysis and path analysis. Key findings indicate a significant positive impact of both Digital Ethics and Data Privacy Practices on Employee Trust. Furthermore, the analysis reveals that perceived organizational fairness in the use of E-HRM data acts as a crucial mediator in this relationship. The study provides actionable insights for HR professionals, policymakers, and system developers seeking to enhance the ethical governance of E-HRM systems and build a foundation of trust essential for successful digital transformation in human resources.