Linking <scp>HRM</scp> Digitalization to Employee Thriving at Work: A Signaling Theory Perspective

ABSTRACT The insufficient exploration of the effects of HRM digitalization has led to a concern that digitalization costs employees' growth and development to improve their performance. To address this concern, this study, based on signaling theory, discloses the positive mechanism underlying the relationship between HRM digitalization and employee thriving at work. Specifically, we explored how HRM digitalization enhances HRM system strength, which in turn plays the role of a positive HRM process signal promoting employee thriving at work. Besides, we propose employee participation in goal setting, as an HRM content factor, could amplify the positive influence of the HRM process signal on employee thriving at work. Through multi‐wave and multi‐source data across 2077 employees and 128 HR directors from 128 organizations, results showed that HRM system strength plays a positive mediating effect in the relationship between HRM digitalization and employee thriving at work; employee participation in goal setting could augment the positive effect of HRM system strength on employee thriving at work as well as its mediating effect. Based on these findings, we discuss underlying theoretical and practical implications and outline future research directions.