AI has without a doubt been the hot topic of 2023 and businesses everywhere are beginning to implement this emerging technology into their day-to-day operations - with many organizations trialing AI as a tool to transform their approach to performance management.
This application has been made possible by a growth in computational power which allows AI systems to analyze vast amounts of data and make predictions with high accuracy. Machine learning processes have been central to this evolutionary process, and they are deeply rooted in pattern recognition and statistical analysis abilities. One example of this evolution is ChatGPT which is an advanced AI tool that when prompted can generate relevant responses. ChatGPT shows how AI can be used as a strategic ally to augment human capabilities, and reflects the benefits of treating this technology as an ally, rather than something to be feared altogether.
However, AI goes far beyond ChatGPT and when used in performance management practices, AI has the ability to offer continuous feedback, offer data-driven evaluations and make forward looking predictions.
Head of Product Development and Design at Columbus Tech.
How AI can transform performance management processes
AI brings heightened transparency to the performance management process by providing data-driven insights into employee performance metrics. This transparency promotes an objective evaluation process and also fosters accountability. This combination is the key component to building trust within an organization, as well as improving communications and driving efficiency.
This will have a domino effect throughout the organization - if employees feel seen and are given insight into the business and their performance, they will inevitably feel more valued and will be more likely to stay. Staff retention is crucial to growth and development. There are many reasons for this, including the fact that it costs less money to keep employees than it does to hire new employees and productive employees will greatly increase an organization's profitability. This culture will also help to attract new, top-tier talent, which will help to contribute to future growth and success.
Through the integration of AI into the performance management process, organizations will benefit from increased agility. As a result of AI’s ability to harvest and analyze vast amounts of data in real-time, businesses will be able to quickly adapt to evolving market trends, make important business decisions with heightened efficiency and identify any gaps in performance as soon as they emerge. In today’s dynamic environment, agility has never been more important, and without it, businesses will not be able to remain competitive. One example of this in action can be found in the finance industry where AI algorithms are being used to analyze market trends in real-time, allowing businesses to adapt swiftly to dynamic market conditions.
One step further: AI-enhanced OKRs
Senior executives are usually tasked with selecting the Objectives and Key Results (OKRs) that will drive their businesses towards its strategic objectives. However, this process can be extremely time consuming and resource intensive - and this is where AI comes in. AI has the ability to transform the standard decision-making process by providing senior executives with immense data processing power, pattern recognition and analytics capabilities. Through this integration, business leaders will be able to identify the synergy between OKRs, spot similarities and align OKRs with other parts of the business. By utilizing AI, business leaders will also be able to draft a set of OKRs based on past data and future predictability, making the OKR process faster and more effective.
However, it doesn’t stop there. By incorporating AI into the OKR process, businesses will be able to manage their resources more effectively. AI can automatically conduct an analysis into the set objective and check its alignment to a historical trend of resources to ensure that all resources are being used effectively. This integration will also ensure that all objectives throughout an organization are aligned to the business’ overall strategic goals to make sure that every task and initiative is helping drive the organization towards success. Finally, AI prediction engine features can be used to advise businesses on what their next set of OKRs should be and will show success and risk factors for each option.
Friend not foe: the future of AI in performance management
AI has evolved dramatically this year alone, and as it continues to develop, I expect that more businesses will be embracing the technology with open arms. These organizations will without-a-doubt reap the benefits of increased organizational agility, transparency and increased ownership - and these three factors will help them to remain competitive in our volatile market. For any businesses that go one step further and integrate AI into their strategy execution process, they will be rewarded with a full view into their organization while ensuring it remains on the path to success.
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Chris Keith is Head of Product Development and Design at Cronus.