The use of artificial intelligence in performance management continues to be debated, but studies show that demand for AI in this area is coming from an unexpected place: employees.
Emily Rose McRae, senior director analyst at Gartner, says HR leaders need to recognize that the “performance of performance management is low.” An October 2024 Gartner survey of nearly 3,500 employees found that 87% of employees think that algorithms could give fairer feedback than their managers. An earlier Gartner survey of more than 3,300 employees revealed that 57% believe humans are more biased than AI when it comes to making compensation decisions.
McRae calls this a “damning indictment of how employees feel about managers.” However, this isn’t necessarily the fault of managers, according to McRae. “We don’t set managers up for success to give in-the-moment feedback regularly,” which she says isn’t intuitive for most individuals, even though frequent feedback is proven to be more meaningful than delayed feedback. In fact, research from Gallup shows that employees are 3.6 times more likely to strongly agree that they feel motivated to do outstanding work when their manager provides daily feedback rather than annual feedback.
Too busy for performance management?
The lack of in-the-moment feedback may be due to managers feeling overwhelmed. A Gartner survey of more than 6,000 employees found that, as of December 2022, managers were twice as likely as individual contributors to report an increase in responsibilities compared to before the pandemic.
McRae suggests AI can help take some performance management “off their plates.” Performance touchpoints would ideally pop up throughout the day through nudges and resources such as coaching and microlearning. She says managers will still finalize major decisions, as the human in the loop verifies and validates the bots’ recommendations.
But in practice and reality, says McRae, these tools simply aren’t used in many organizations. She says plenty of HR leaders are concerned about bias and the quality of in-the-flow, tech-driven performance management, even if employees say that’s what they want.
Employees see bots as more objective
Though McRae says the preference for what Gartner calls bots over bosses “threw her,” there is further evidence that this inclination is on the rise. Research from the University of New Hampshire in 2024 found that employees perceive AI evaluations as more trustworthy than those from human supervisors when they anticipate bias or unfair treatment, such as favoritism or personal disapproval. The study also noted that biased human evaluations could increase employee turnover, while AI’s perceived fairness might reduce it.
A 2022 report from Münster University of Applied Sciences compared fairness perceptions between human and AI decision-making tools and highlighted concerns about bias in human-led processes like hiring and compensation. Employees generally viewed AI-driven systems as fairer due to their reliance on objective criteria, though apprehensions about ethical implications remained.
Read more | EEOC commissioner advises CHROs: Don’t let AI ‘scale discrimination’
Pitfalls of using AI for performance management
Researchers at Münster University suggest that incorporating human traits—such as bots or conversational designs with visual, auditory and behavioral cues that mimic real people—could enhance AI’s effectiveness. However, it may also create unrealistic expectations.
There is a paradox in making AI decision tools more human-like to build trust while also managing expectations of fairness. People may be more accepting of AI when it appears to learn or act like a human, but this doesn’t guarantee fair decision-making, especially in HR. Also, the report warns that over-anthropomorphizing AI could be unsettling or cause employees to resist it.
Though research indicates that employees often see AI as a more impartial alternative to human supervisors, legal and ethical challenges remain under EEOC regulations. HR professionals must take full responsibility for employment decisions, even when AI is involved.
Keith Sonderling, new U.S. Deputy Secretary of Labor, cautions HR leaders to balance technological advancements with employee rights under existing laws. Speaking to an HR Executive audience last year in his role as an EEOC commissioner, he emphasized that AI must be “carefully designed and properly used.”
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