Digital technology brings opportunities and challenges for human resource management (HRM). However, little is understood about how the compatibility between employees’ needed and organizations’ supplied digitalization of HRM (DHRM) is associated with employee outcomes. In this study, we drew on the person-environment (P-E) fit theory and utilized a manager-employee paired sample from 205 firms to explore the relationship between fit in employees’ needed and organizations’ supplied DHRM (i.e., algorithmic recording and automatic analysis) and employees’ cognitive responses. Results indicate that fit in DHRM is a double-edged sword. While fit in the algorithmic recording is positively related to perceived insider status, fit in the automatic analysis is negatively related to competence mobilization. Furthermore, the relationship between misfit in DHRM and employees’ cognitive responses is moderated by leaders’ influence tactics in terms of leader empathy and coalition influence tactics. This study enriches research on DHRM by examining fit from a dyadic perspective.