Digital Capabilities, Organizational Culture, and Employee Well-Being on Employee Performance Through Employee Engagement at Startups Under the Guidance of a Business Incubator

Zainuddin Mustapa (Universitas Bosowa, Makassar, Indonesia)
Andi Muhammad Fara Kessi (Universitas Wira Bhakti, Makassar, Indonesia)
Muchlis Abbas (Universitas Lamappapoleonro, Soppeng, Indonesia)
Arnida Arnida (Universitas Handayani, Makassar, Indonesia)

Advances in Human Resource Management Research
Vol. 3 No. 2 (2025): February - May

Purpose: This study examines the effects of digital capabilities, organizational culture, and employee well-being on employee performance, with employee engagement as a mediating variable. Research Design and Methodology: Using a quantitative explanatory design, data were collected through questionnaires from 180 respondents and analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The measurement model was assessed through outer loadings, composite reliability, and average variance extracted, while the structural model was evaluated using path coefficients, coefficient of determination, and bootstrapping. Findings and Discussion: The results show that digital capabilities, organizational culture, and employee well-being positively and significantly influence employee engagement. Employee engagement has a positive and significant effect on employee performance and represents the strongest direct predictor. Employee well-being also directly improves employee performance, whereas digital capabilities have no significant direct effect, indicating that their contribution to performance operates primarily through employee engagement. Implications: Organizations should integrate digital capability development, a supportive organizational culture, employee well-being initiatives, and engagement strategies to improve employee performance during digital transformation sustainably. Future research may test this model across industries and broader organizational contexts.