Page 170 - IMDR JOURNAL 2023-24

IMDR’s Journal of Management Development & Research 2023-24

take targeted action. AI-powered individualized employee recognition and engagement could increase
workers' contentment and engagement. However, organizations need to carefully balance putting in place

proper AI processes, preserving transparency and confidence in the process, and leveraging AI to keep
employees while also protecting their privacy.(Saraswati T, Karthikeyan M, C. Balakrishnan, Dr. T. Nithya,

B. Maheshwari, Siva Subramanian.R, 2023)

Role of AI in Performance Managements -

Traditional performance management involved supervisors communicating standards and key performance

indicators prior to the integration of artificial intelligence (AI). Work sampling techniques were used for data
collection on employee behaviour, leading to detailed written feedback and annual discussions. Emphasizing

past performance, the approach relied on single- rater appraisals, static rankings, and often tied rewards to
compensation or bonuses.

The Process of Performance Management: The continuous process of managing employee performance
includes an initial agreement, monitoring and evaluation, and a final review. Beginning with role definition

and establishing key performance requirements, the planning stage involves discussing expectations and

creating personal development plans. During performance management, employees execute plans while
supervisors provide feedback and coaching. Managers collect data through observations and assessments

against criteria. The performance review involves discussing achievements, progress, and problems, with
rewards introduced for meeting requirements

Developments in information technologies have led to a significant shift in performance management with

the inclusion of artificial intelligence (AI). AI, defined as machines executing cognitive functions traditionally
performed by humans, has witnessed a 70% adoption increase in business tasks over the past five years. This

adoption is reshaping workplaces by automating activities like data collection, interpretation, and feedback
generation. AI's application in performance management enables continuous monitoring of the workforce,

leveraging big data to provide customized feedback. This shift is expected to revolutionize performance

management processes, contingent on organizational adaptation to AI-generated feedback and managers
recognizing the full potential of new software features. The process, involves giving meaning to disruptive

events and influences whether individuals perceive AI-generated feedback as an opportunity or threat. This
perception, in term, affects the successful integration of this technology into performance management

practices. (Hanna Riecken, 2024)

Artificial intelligence (AI) in performance management, specifically focusing on Generative AI (GenAI).
GenAI is seen as a tool to streamline and enhance traditional performance management processes, offering

benefits such as unbiased performance reviews, improved feedback, and facilitating ongoing conversations
between managers and employees. The current state of AI in performance management reveals a significant

interest from HR leaders, with 81% considering or implementing AI solutions to enhance efficiency. AI-driven