Should you be using AI for performance reviews?

AI is increasingly used in recruitment and performance management, often preceding human interaction. The adoption of AI in the workplace has become widespread, with many employees regularly using it. This shift raises concerns about fairness, potentially leading to surveillance and eroded trust. AI can create four scenarios: win-win, company-wins-employee-loses, employee-wins-company-loses, or nobody wins. Ideally, AI can provide objective feedback and coaching, making workplaces more meritocratic. However, AI can also be used to monitor employees, creating a digital "panopticon," which could erode trust in the workplace. Employees may learn to game the AI system if they realize it helps them more than the company. In the worst case, AI can lead to mistrust, disengagement, and a lack of accountability from managers. To avoid negative outcomes, leaders should validate metrics, be transparent, and keep humans involved. Effective performance appraisals should also include clear goals, timely feedback, and development plans. When used thoughtfully, AI can enhance existing human-centered practices.