Today’s organizations increasingly implement enterprise social media platforms to provide a digital work environment. Hereby, organizations expect various benefits, such as improved employee performance. In our research, we aim at uncovering how the introduction of enterprise social media platforms can support creating a digital work environment and how this digital work environment can influence an employee’s performance. To answer these research questions, we perform a survey-based investigation among 247 employees of an international financial corporation headquartered in Germany. For our investigation, we conceptualize that a digital work environment must consist of a task and a social dimension. Our findings show that enterprise social media platforms address both work environment dimensions by enabling collaboration, as well as networking among employees. We also find that employees who collaborate and network via enterprise social media platforms, increase their work performance by becoming more efficient and also more innovative. We find that networking's impact on an employee’s innovativeness is significantly stronger than that of collaboration. Finally, we show that our research contributes to the literature by, for example, shedding light to the relationship between ESM use and employee performance. Furthermore, by showcasing the relevant ESM platform functionalities that influence the collaboration and networking impacts, we provide insights to the actual IT artifact. Building on this, our study also yields various practical implications, such as proving which of the ESM functionalities are essential when increasing the employees' collaboration and networking, and ultimately increasing their performance.