The Role of Digital Leadership in Improving Employee Performance through Digital Fluency as a Mediation Variable
Abstract
Digital transformation in the financial sector requires organizations to develop adaptive leadership while simultaneously improving employee digital fluency. This study aims to analyze the influence of digital leadership on employee performance, both directly and through digital fluency as a mediating variable, at the Bank Indonesia Representative Office in South Kalimantan Province. This study uses a quantitative approach with an explanatory design. Data were collected through a survey of 133 employees selected using a simple random sampling technique and analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) using SmartPLS 4. The results show that digital leadership has a positive and significant effect on digital fluency (β = 0.996; p < 0.001), while digital fluency has a positive and significant effect on employee performance (β = 0.860; p < 0.001). However, digital leadership does not have a significant direct effect on employee performance (β = 0.138; p = 0.505). The indirect effect test showed that digital fluency significantly mediated the effect of digital leadership on employee performance (β = 0.857; p < 0.001). This finding confirms the occurrence of full mediation, indicating that digital leadership can improve performance if it is able to build employee capabilities in adapting to technology, critically analyzing information, collaborating in digital environments, creating technology-based solutions, and maintaining digital security. Practically, organizations need to prioritize the development of digital fluency through continuous training, mentoring, and the establishment of a supportive digital work ecosystem so that the leadership's digital vision can be effectively translated into improved employee performance.
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