Redefining Performance Management in the age of AI

By Aditya Mishra | February 15, 2020

AI has been touching our lives in the form of voice assistants, spam filters, schedulers, parsers, chatbots and many more. We see them in action at our homes, workplaces and the places we visit. We interact with them in order to make our lives easier. Every now and then, we see new launches of AI-powered tools which promise to help human beings perform routine tasks with greater accuracy and higher safety.
Humans are expected to perform tasks which involve creativity, judgement, emotions and human connect. People management is one such function that front-line supervisors to senior-most managers in a company perform. They need to see the company’s vision, delegate tasks, set targets, monitor progress, coach people and make course-corrections. Broadly, this is how they manage performance. Over the last ten years, many organisations around the world have made major changes in the way they manage performance of their employees. In the age of AI, there are more changes imminent.

Annual budgeting is passé

Well-run organisations have established processes to review their strategic plans, develop annual operating plans and break these annual targets to each employee there. With the advent of the technology tools available, speed of business has been on the rise; as a result, organisations have to be more agile. They have started planning on a quarterly basis alongside the annual exercise.
Going forward, more and more companies will adopt this new way of doing things; however, they will need to put substantial efforts of dipping into the performance data, studying market trends, connecting the dots and finally projecting various possibilities into the future. We think, with the advent of AI, we will need much lesser time and efforts to draw insights from the past and simulate various scenarios for the future.

Performance tracking gets real-time

As AI helps us crunch the time, planning cycles would come down from annual to quarterly. In some cases, this planning cycle could get down to weekly, daily and hourly as if the business follows game theory. Systems could monitor progress on a real-time basis. Employees and their managers can track the performance of each process and make changes. We say, means are more important than the ends. However, it is not very easy in most businesses to track the performance of each process and the employees carrying them out on a real-time basis.
Most organisations ask their employees to report their performance on certain intervals of time. Their managers spend time reviewing the reports, validate the data and discuss the performance versus the target assigned. If we have an AI-powered system, organisations would save 2-5% of their productive hours and managers could invest their time in more meaningful ways in coaching their team members than collating, validating and analysing the data.

Feedback will give way to feedforward

Traditionally we are all told about the importance of giving feedback and receiving them. It has been increasingly noticed that most of us do not receive critical feedback even if it is delivered with the highest earnestness and care. Unless one accepts a piece of feedback, the corrective action doesn’t take place.
So, thinkers have come up with the idea of feedforward which is a suggestion to make things better in future. This suggestion does not relate to the past and hence, in order to offer a feedforward comment, one does not need to know about the past behaviour or performance of the person. Secondly, the recipient is likely to accept the suggestion, comment or input rather than defending about the past behaviours.
With AI-powered performance tools, all aspects of performance (key performance indicators or KPIs) are likely to be continuously tracked on real-time, targets will be periodically revised and stakeholder feedback will be continually aggregated. Hence, the manager doesn’t really need to present all these to the team member. Rather the manager will invest efforts in feedforward conversations which are likely to make the employee get better at the role, grow in career and chart potential future paths.
As we embrace AI in our day to day life, it is important that we do the same while managing the performance of our teams and organisations.