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This study investigates the impact of digital transformation in Human Resource Management Systems (HRMS) on employee performance in Libya’s banking sector, focusing on Al-Wahda Bank in Benghazi. Digital transformation is recognized as a strategic tool to address administrative challenges, improve operational efficiency, and support decision-making through effective information management. Using a descriptive-analytical method, data was collected through questionnaires distributed to 94 randomly selected employees across five bank branches. The questionnaire assessed five key dimensions: employment, evaluation, training and development, reduction of customer issues, and job performance. Results showed that digital transformation in all dimensions had a statistically significant positive effect on employee performance. No significant differences were found in perceptions of digital transformation based on gender, age, education, job type, or years of experience except for job performance, where male employees reported higher outcomes. The findings emphasize the need for ongoing investment in digital technologies, employee training, and infrastructure development to ensure the successful implementation of digital transformation strategies in the banking sector.