In the New Normal, AI and Data Analytics May Play an Even Bigger Role in Performance Management

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Performance management tools have proven extremely helpful for many organizations throughout the pandemic, giving employers a way to track performance and collect important data while staff members worked remotely. Now, as companies think about returning to the office in some capacity, it’s worth exploring how performance management tools might help us navigate the new normal.

As with many enterprise tech tools, data analytics and artificial intelligence (AI) have been playing an increasingly important role in performance management systems and strategies in recent times. Leveraged properly, these analytics and AI capabilities could have a powerful impact on employee performance in your organization.

How Does Artificial Intelligence Impact Data Analytics?

To understand how AI factors into data analytics, we must first consider two key technologies: machine learning and predictive modeling.

Machine learning is a process in which a technology analyzes data sets to find patterns that teach it how the data will perform in certain scenarios. As more and more data is collected, the machine learning algorithm analyzes that data and continues to adapt. Predictive modeling is driven by machine learning, and it helps create real-time predictions using the data collected by the machine learning algorithm. The more information your machine learning algorithm takes in, the better your predictive models and data analysis will be. The system is constantly evolving and improving.

In short, when AI is driving your data analytics, you can learn more from your data, make key decisions based on it, and predict what is likely to happen in the future. For instance, let’s say you lead a business that recommends items to shoppers. Instead of spending time sending out surveys and tracking shoppers’ search histories to understand what they like, you can let AI take in all of that data and use it to produce highly personalized suggestions.

Applying These Concepts to Performance Management

So, what does all of that have to do with performance management? To answer that question, let’s first look at some of the typical tasks company leaders and managers handle:

• Reviewing employee performance
• Defining employee roles
• Determining fair compensation
• Making promotion decisions
• Setting business goals

Many of these responsibilities have been digitalized through performance management software. For example, instead of manually organizing notes for performance reviews, many managers now rely on the employee overviews provided by their performance management solutions. Instead of making gut decisions about who is best for a promotion, managers can use employee data as a solid basis for key personnel decisions.

With AI, performance management tools gain additional functionality. It’s nice to have all of your important employee data in one place, but it’s even nicer when the system uses that data to help make suggestions for you.

Here are some of the ways AI can support performance management:

Facilitating performance reviews:AI can mitigate biases when it comes to making promotion decisions or evaluating a staff member’s performance. Using the data it collects on employee performance, AI can quantify how well an employee is doing, what they can improve on, and opportunities they can take advantage of. Then, these AI-assisted ratings can be used as a basis for more objective employee evaluations.

Monitoring objectives in real-time: Every business sets objectives and a timeline for achieving them. AI-driven tools can help track progress toward these objectives and, through analysis of performance, possibly even suggest activities necessary to ensure the objectives are reached.

Steering employee development: If an employee is going above and beyond, your AI-driven system can flag this, letting managers know an employee should be rewarded for their efforts. On the flip side, if an individual is falling behind, AI tools can also suggest ways to increase productivity and offer learning opportunities.

Predicting employee potential:Using data about an employee’s past performance, AI tools can make informed predictions about how that employee might fare in future roles, thereby guiding decisions about promotions and the distribution of responsibilities.

Determining fair compensation:AI tools can gather data about market salary rates, compensation at other companies, and your own internal payroll information and use it to determine fair compensation for a role.

Using AI to analyze performance management data is a relatively new frontier, but it’s worth exploring in the post-pandemic economy. Digitalizing key processes is a must for any business looking to scale today, and AI and machine learning can often make those processes smarter while you’re at it. Plus, using a data-driven system to engage and manage your employees is a great way to maintain transparency and mitigate bias as you grow your business.

Jennifer C. Loftus is a founding partner of and national director for Astron Solutions.

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By Jennifer C. Loftus