The Influence of Digital Leadership and Compensation on Employee Performance at Direct Selling Company

Abstract

Digital transformation has driven significant changes in the operational models of Multilevel Marketing (MLM) companies, particularly in leadership and human resource management. Leaders are required to integrate technology into coaching, communication, and decision-making processes, while compensation systems must remain relevant and competitive to keep employees and their support networks motivated. This study aims to analyze the influence of digital leadership and compensation on employee performance at PT. Milagros Indonesia Megah, an MLM company that markets energy boosting drinking water and technology-based skincare products in Bandung. The research approach used a qualitative method with a case study, involving 40 informants consisting of leaders, administrative staff, and support employees directly involved in digital operations and sales processes. The research results show that effective digital leadership is characterized by clear virtual communication, technology-based emotional support, and the leader's ability to direct the use of digital platforms, thus positively contributing to improved employee performance and adaptation to change. Furthermore, a fair, transparent, and performance-based compensation system has been shown to strengthen motivation, loyalty, and a sense of belonging to the company. These findings imply that technology-based MLM companies need to strengthen their leaders' digital competencies and improve their compensation structures to achieve optimal performance.