Artificial Intelligence in Employee Performance Reviews

Category: Performance Management.

Data collection is an essential part of a performance appraisal. The very purpose of an employment performance review is to understand people and their performance at a personal level – what they have achieved, what they are capable of achieving, the way they contribute to the organization and behaviors that lead to success or failures – not just in their goals and objectives, but also in terms of their cohesiveness with the team and their alignment with the organizational goals.

Alexander

In business, the idea of measuring what you are doing, picking the measurements that count like customer satisfaction and performance… you thrive on that.

Bill Gates

Understanding all those aspects of performance necessitates collection of vast amounts of data. But data collection is only a small part of the review. The key to effective performance management and engagement with employees is seeing things from their perspective, and anticipating what they would want out of a review process. If you have a workforce made up of individuals from the millennial generation, chances are they have different priorities and ambitions than their Generation X counterparts. You can understand the traits of millennials and how you can design reviews to fulfill their expectations and retain them

Without analyzing the data and building meaningful conclusions, data neither helps to hone the performance of the employees, nor does it have any use for the organization in making management decisions, creating a positive performance culture and setting objectives for the future based on the current performance. So, organizations have to spend resources and time to design performance reviews, collect data using employee evaluation forms, analyze the data and build an action plan based on the findings. What if there is some technology that can help the organization at every level of this process?

AI-powered performance management

Companies have started using Artificial Intelligence for conducting performance reviews and performance management in general. During the time of pandemic, it has become more important to find efficiencies through innovations like AI and make the right data-driven decisions to strengthen the organization and prepare for the future.

In an AI-powered performance management model, data collection is continuous and automated. As a result, the performance reviews can also be continuous. AI goes beyond just the collected data; it goes through a central repository of data from previous reviews and other multiple sources of data. This eliminates the errors in judgement and makes the employee performance review more meaningful.

Advantage of using AI

The advantages of using AI in performance reviews

The use of AI in performance reviews has the following advantages:

1. No human errors

In a conventional performance review, the managers are entrusted with the feedback on the employees, which can make or break their career. The managers have a lot to do – from rating the performance to identifying suitable training courses, understanding their contribution to the team, providing feedback regarding the performance, setting goals for the future, and more. When managers have to do all this for a large group of employees, it can be taxing and can result in human errors like personal biases, conclusions based on incomplete data, and favouritism.

AI-powered performance management is completely data driven. It has no personal likes or dislikes. It collects information from multiple sources, eliminating the room for error in the data itself. So, AI can help managers provide objective feedback that can benefit the employees as well as the organization.

2. Projections based on more comprehensive data

Conventional performance appraisals are based on the limited data and the performance indicators defined in the evaluation form.

AI-powered performance reviews scrape through vast amounts of data and create projections based on not just the current review, but also taking into account the progression of the employee in performance as well as career since the beginning. This plays a crucial role in identifying the potential of the employee and setting the most appropriate goals. It can help the manager identify promotions and calculate incentives better.

3. Continuous assessment and real-time analysis

The move from periodical performance appraisals to the continuous reviews has many advantages. Performance can be continuously honed and improvements and course-corrections can be done continuously; as a result, the organization becomes agile and flexible.

AI gives you the power to continuously capture data from multiple sources including written communication amongst employees, calendars, etc. As a result, the system can show real-time insights on the performance of individuals and help the managers make decisions quickly and give feedback instantly. It also saves an enormous amount of time involved in preparing for a periodic performance review, where employees have to recall information and verify them with relevant sources.

4. Better managers

AI helps managers to cross-check their judgement and verify if the feedback they provide is accurate. It will help the managers to improve, and get a wider array of data and information on the employees they are reviewing.

In traditional performance appraisals, managers are forced to rely on an employee’s perspective and their own view of an individual’s performance. With AI-powered performance reviews, there is simply more data to draw from. This can also improve the way in which managers give feedback, because they can point to concrete metrics to either support their encouragement of an employee, or to demonstrate where exactly an employee can improve their output and job performance.

5. Employee engagement

As a part of the continuous performance review, AI can conduct frequent intelligent surveys and gather feedback in real-time; it can also share personalized insights to the employees based on those surveys or even self- evaluations.

This will help the management engage with the employees better and paint a more accurate picture of the day-to-day achievements and the challenges the employees face at individual level and also as an organization.

6. Training and development improvements

AI can help managers to better identify the gaps in the talent pool and give personalized training suggestions for individuals by analyzing their career progression through data from past performance reviews, interests and skill sets. Identifying employee competencies and seeing where employees can improve is a big part of performance management.

Having AI help power this aspect of employee performance can make for a more accurate performance appraisal. AI technology baked into learning programs can help employees learn better and faster.

However, it’s important to remember that AI has major limitations and potential problems that can disrupt an organization. Let’s take a look at some of those disadvantages:

Disadvantages:

1. Cost

AI is emerging technology and creating a customized, foolproof AI for performance reviews in your organization can cost a lot.

If it breaks down, it can take valuable time and resources to fix it. Organizations need to decide whether the benefits would outweigh the costs involved.

2. Lack of human element

When AI is employed, the role of manager is reduced from being the one responsible for performance reviews to being a moderator of facilitator. If the employees have grievances about their evaluation, the loss of human element in the review process creates a disconnect between the employee and the organization.

Also, the AI can learn and function only in the way it is coded. Whether it can match the versatility of human intelligence remains to be seen. The real world impact of the lack of human intelligence can have a negative impact on the employees in the long run.

3. Loss of crucial human potential

AI cannot work perfectly in all situations. There will be times when AI-based performance reviews cannot take into account certain factors. During such times, human intelligence is needed to make decisions.

Relying on AI and connected technology too much can blunt the human potential and decision making abilities. For instance, we have discussed how organisations need to show empathy to what the employees are going through and modify the performance reviews accordingly. AI lacks this emotional intelligence to deal with these situations. If the human potential fails to rise up to such crisis situations due to reliance on AI, it can cause a lot of damage to the organization.

4. The Ethical side of AI

The most important disadvantage of AI is the questionable ethical standards. When organizations look for more and more data and personal data, AI designed to collect personal data can become extremely intrusive. For instance, if the AI is designed to track the work behaviours of the employee using the connected devices, such as the amount of time he or she spends away from their work desk. Then, the performance reviews tied to the data can reflect negatively on the employee. This can lead to the erosion of employees’ trust in the organization.

Where should you draw the line?

So, it is extremely important for the organizations to carefully consider how and where they want to incorporate AI in the process of performance review. They have to carefully draw a line where AI merely complements human intelligence and helps managers to do their job better and make better decisions, rather than taking over their roles and becoming intrusive while collecting data.

Performance Management with Profit.co

Profit.co’s performance module perfectly blends the convenience and capabilities of AI-powered performance reviews with the vital human and management element necessary for an amazing employee performance appraisal.

Managers, HR administrators, and other designated performance review members never leave the appraisal process during Profit.co’s performance review. Reviews can be customized and initiated completely at will, meaning that every appraisal can be tailored to a specific employee seniority, department, or even an employee, depending on what the company needs to know.

Managers, peer reviews, and reviewed employees can use rating scales to give insight to certain performance competencies or skills, and individuals included in the review process can answer open-ended questions that offer the opportunity to delve deeper into the important aspects of a job. Profit.co also has a potential rating scale that offers HR Administrators and managers the opportunity to see performance and potential averaged on a 9-Box Matrix, compared with other employees in the review.

All reviews are stored virtually and can be referenced at any time. This blend of the convenience and quantifiability of AI-driven data combined with the necessary human input makes for an engaging employee review experience for everyone involved.

For more on Profit.co performance management, visit our product page, or book a demo with our team!


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