The Application of AI-Based Technology and Psychological Contract in Improving Employee Performance in the Hotel Industry

Abstract

Background: Digital transformation has accelerated the adoption of Artificial Intelligence (AI) in the hospitality industry; however, research integrating AI with Psychological Contract (PC) and Innovative Work Behavior (IWB) to explain Employee Performance (EP) remains limited, particularly in Indonesia. Objective: This study examines the relationships among AI, PC, IWB, and EP and assesses the mediating role of IWB among employees of four-star hotels in Yogyakarta. Methods: A quantitative cross-sectional survey was conducted involving 90 respondents selected through purposive sampling. The data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). Results: All seven hypotheses were supported. AI was positively associated with EP (β = 0.345; p < 0.001) and IWB (β = 0.397; p < 0.001), while PC was positively associated with EP (β = 0.416; p < 0.001) and exhibited the strongest association with IWB (β = 0.526; p < 0.001). IWB was positively associated with EP (β = 0.352; p < 0.001) and partially mediated both the AI–EP (β = 0.140; p < 0.001) and PC–EP (β = 0.185; p < 0.001) relationships. The model explained 68.2% of the variance in EP and 44.7% of the variance in IWB. Conclusion: The findings extend hospitality research by integrating technological and psychological perspectives within a single model and indicate that AI utilization and PC fulfillment are associated with employee performance both directly and through innovative work behavior.