This study examines the impact of AI on employee and organizational performance, focusing on four employee factors (AI awareness, evaluation, usage, ethics) and four organizational factors (business spanning, infrastructure, proactive stance, ethical considerations) that drive overall performance in today's business environment.

The research uses a two-wave study design, collecting data from businesses using purposive sampling technique. Study 1 focuses on AI at the employee level, with 222 matched data points to examine how AI literacy affects employee performance. Study 2 examines organizational AI competency, with 179 matched data points assessing impact on organizational performance. Data gathered was analyzed using PLS-SEM for explanatory and predictive purposes.

At the employee level, the results indicate that AI literacy enhances employee performance, with IPMA and NCA highlighting AI usage, awareness, and evaluation as key drivers. At the organizational level, proactive stance, infrastructure, and business spanning are essential for performance, while AI ethics matters primarily at peak performance. The two-wave study is supported by robust analyses, including endogeneity tests, IPMA, and NCA.

This study is limited by its purposive sampling technique, the absence of comparison groups and control variables.

This two-wave study develops a multi-level framework linking employee and organizational AI capabilities to improve organizational performance.