The Effect of Digital Transformation on Employee Performance at Perumda Tirtanadi of North Sumatra Province

Abstract

This study aims to examine the effect of Digital Transformation on Employee Performance at Perumda Tirtanadi of North Sumatra Province, Indonesia. In the context of public sector governance, improving employee performance is essential to support the successful implementation of digital transformation and enhance overall organizational effectiveness. Employee performance reflects employees’ ability in terms of work quality, timeliness, responsibility, and consistency, which are crucial in adapting to digital changes within the organization. A quantitative approach was employed using survey data collected from 54 respondents through a structured questionnaire. The validity and reliability of the research instrument were tested using Pearson’s correlation and Cronbach’s Alpha, confirming that all items were valid and reliable. Descriptive statistical analysis indicated that both Digital Transformation and Employee Performance were perceived at a moderate level, with mean scores of 20.1852 and 20.4074, respectively, and relatively consistent responses among participants. Furthermore, simple linear regression analysis and a t-test were conducted to test the research hypothesis. The results revealed that Employee Performance has a positive and statistically significant effect on Digital Transformation, with a significance value of 0.000 and a regression coefficient of 1.033. The coefficient of determination (R² = 0.951) indicates that 95.1% of the variance in Employee Performance can be explained by Digital Transformation. In addition, the high t-value (31.613 and 73.553) confirms a very strong relationship between the variables. These findings highlight the importance of improving digital transformation as a strategic approach to supporting and accelerating employee performance within the organization.