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How Companies are Embracing Performance Evaluation with AI

As more employers invest in artificial intelligence, the technology is expected to play a larger role in helping employers assess their workers, according to a report from Mercer.

As per Lori Holsinger, global performance management study leader at Mercer. “Performance reviews are too subjective, too tense and, frankly, have too much riding on them.” He does, however, advocate that business intelligence methods can greatly assist performance reviews. “Many quantitative performance evaluation metrics can be gathered and reported BI-style and AI can take these results and make the process highly interactive/intuitive,” he said.

AI-based performance evaluations can provide meaningful direction straight to the employees on a more frequent and consistent basis which is not practically implementable with a human manager. Companies like Accenture have taken a step back from the annual employee performance review in favor of a system of continuous performance feedback.

IBM, one of the pioneers in implementing AI in everyday processes claims that its Watson AI can easily predict future employee performance with almost 96% accuracy. It has been proven through several real-life examples that AI has a much better memory and ability to measure metrics against one another (like an employee’s goals/standards to their actual performance). With AI one can be sure that all crucial aspects are accounted for in performance evaluations and nothing is forgotten like say an employee’s strong first quarter. Furthermore, AI gives companies real-time feedback, negating the need for backdated chastising months after the incident.

Other global companies including Cargill and Adobe too have abandoned the old model of “pass or perish” yearly reviews. This cutting the yearly review in favor of continuous feedback has reportedly reduced turnover by 30% (which equals to millions of dollars in hiring and loss of productivity).

Companies, such as GE and Microsoft who followed the “stack and rank” approach are now exploring new ideas that give them continual feedback and coaching. Tech giant Google too has transformed the way it compensates high performing talent at every level. Digital entertainment giant, Netflix has stopped measuring its people against annual objectives, due to their fluidic and constantly changing nature. Some tech companies, such as Atlassian, have automated many evaluation activities with AI, that managers elsewhere still perform manually.

The industry leaders believe that AI will reach a point where it can independently write, or at least provide a framework for a performance review. A manager could use this framework to finalize a performance appraisal. The challenge will be to make sure that access is efficiently controlled and that there are policy controls on the sensitive HR data required to train the AI models.

  • Posted Date: 18-MAR-2020