The rise of Artificial Intelligence (AI) is already offering benefits for a range of industries. Medicine, eCommerce, and even education are starting to adopt methods that are supported by Machine Learning. But there are also tools that help boost company success regardless of the sector.


All businesses with employees require effective human resources (HR) departments. Naturally, professionals in this field apply valuable interpersonal skills to address the needs and challenges related to the workforce. However, AI tools can be particularly impactful in HR activities that rely on assessing data efficiently. A key example of this is employee performance management.


Let’s look a little closer at how HR departments can use AI for effective performance management strategies.


Why Performance Management is Important

Running a successful business can gain from strategic analysis in a variety of areas. Among the most important are those related to the key contributors to your business’ success: your employees. Adopting strong performance management practices enables HR professionals to collaborate with workers on understanding performance metrics and working toward mutually beneficial improvements. In essence, this process focuses on the individual actions and needs of workers, rather than making sweeping assumptions and adjustments. The result is a more relevant and effective improvement.


Effective performance management requires planning, energy, and commitment from everyone involved. HR personnel and managers need to collect and review reliable data on each employee. Leaders and employees need to communicate with one another about why management strategies make a difference in everybody’s success. Specific goals need to be set both with a view to improving productivity and also supporting each worker’s unique career development plans.


Given that this can result in positive outcomes for businesses, it’s important to adopt reliable tools to make performance management more efficient. This is where AI fits into the equation. This isn’t just helpful from the perspective of providing time-saving automated tech to assist in reviews. It can also reduce unconscious human biases that may taint performance reviews, as the recommendations and outcomes are based purely on data-backed evidence.


Automated Performance Reviews

Performance reviews are the key point at which HR and employees analyze and seek to understand workplace metrics. They’re also the time at which goals and forward actions are agreed upon. These are, therefore, vital elements of effective performance management.  Nevertheless, this process can take up a significant amount of time, especially for larger organizations. AI can streamline this process to save time and resources.


One approach to this is using Natural Language Processing (NLP) technology. NLP focuses on enabling machines to understand and interpret human language. Such platforms can review employee feedback, comments, surveys, and other communications prior to reviews to identify patterns and trends. HR can use this information to gain insights into the needs of workers, concerns, and areas workers want to improve even before the review begins.


Another way AI can automate performance reviews is through the use of chatbots. Chatbots can simulate human conversations and be programmed to provide feedback or answer questions related to performance reviews. However, it’s important not to rely on this tool for the entire review process, as workers may feel it lacks the human connection they value.


Predictive Analytics

One of the mistakes some HR departments can make is treating performance management as a reactionary task. They might only respond to issues when they’ve already occurred. Yet, it is important to also take a preparatory approach. By understanding what the challenges or needs may be ahead of time, business leaders can better help employees address these.


AI Predictive analytics can be a valuable tool here. It uses historical business data from both inside the company and the wider industry to predict future outcomes. In the context of employee performance management, HR personnel can use predictive analytics to identify patterns and trends in employee behavior. This can then help to predict future performance.


For example, AI can analyze an employee’s past performance data, such as their attendance, productivity, and engagement, to predict components of their future performance and their retention potential. This information can be used to identify areas where an employee may struggle and to provide targeted development opportunities to help them improve.


Performance-Enhancing Tools

An important component of employee performance management is establishing tools that best support workers’ productivity. The rise of the digital landscape in line with the fourth industrial revolution (industry 4.0) offers solutions here. Indeed, one of the features of Industry 4.0 is a cyber-physical approach to operations. This includes the use of robots to perform repetitive manual tasks while workers focus on elements that require their unique perspectives and skill sets. Primarily, though, digital technology driven by AI platforms in the connected ecosystem of devices known as the Internet of Things (IoT) can combine with workers’ skills to boost performance.


Some of the key AI-driven IoT tools HR departments can bolster and assess performance include:

Smart Sensors

Smart sensors can be installed in workspaces to track employee movement, measure temperature, and monitor environmental factors such as lighting and noise levels. AI analytics platforms can review the information and establish how to both optimize the work environment to suit employees’ performance needs.


Wearable devices such as smartwatches or fitness trackers can monitor an employee’s physical activity, sleep patterns, and heart rate. This data can be automatically collected by AI-driven data analytics platforms. The system can then provide insights and recommendations to HR personnel, managers, and employees on where wellness improvements can be made that result in improved performance.

Smart Cameras

Cameras in the IoT can monitor worker activity and log data with AI performance management platforms. For instance, they can track how long workers spend on a particular task and identify inefficiencies in the workflow. The system can then provide real-time recommendations for improvements to workers and to data to HR professionals for future reviews.




HR teams are starting to utilize a range of AI tools to support effective performance management strategies. This includes automating elements of reviews, analyzing data to predict future needs and challenges, and for collaborating with workers to enhance performance efficiency.


As the AI landscape develops, we’re likely to see this technology capable of taking on more of the repetitive and data-rich tasks of professionals. Nevertheless, it is vital for HR departments to be mindful of relying too heavily on these elements. HR professionals and employees have insights and skills that computer systems don’t.


Therefore, it can be wise to consider how performance management can keep benefitting from humans and AI collaborations, rather than being entirely driven by machines.


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