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8 Min Read

Using AI in Performance Management: The Keys for HR Success

Genevieve Michaels

AI isn’t coming for your job, but it might help tons of people at your organization do better at theirs.


As more and more HR tools adopt this technology, AI-powered performance management will soon become the norm.

In a nutshell, performance management covers the practices and processes you use to track each employee’s performance, build realistic goals for them, and help them along their journey as they grow with your organization. It’s an essential part of managing your workforce, but it’s also labor-intensive.

Here’s where AI comes in.

What is AI-powered performance management?

AI-powered performance management uses AI to enhance the way you empower employees to hit their goals. In some cases, that’ll mean using specialized tools that add AI functionality to processes you’re already using, like 15Five’s Spark AI assistant for HR leaders. In others, it’ll mean using AI tools that aren’t necessarily linked to HR processes (e.g. a chatbot like ChatGPT) in ways that support your performance management efforts.

If some part of your performance management process is automated, you’re likely using AI, even if you don’t realize it.

Let’s explore that further.

Performance management using AI: key applications

While there are some obvious applications of HR tools in performance management—like asking ChatGPT to write parts of your performance reviews—there are a lot of other ways they can be used.

  • Finding top performers and struggling employees: As they work, your employees create tons of data. Data about how they meet their deadlines, who they’re collaborating with, and how much time they put towards specific tasks. AI tools can crawl through all of that data, turning it into insights managers can use to identify their top performers and help those who need it most.
  • Analyzing employee strengths and weaknesses: Beyond just finding your top performers, AI can also figure out what makes them top performers. AI-powered performance management tools use robust metrics to help managers identify strengths and weaknesses for everyone on their team, giving them the info they need for performance reviews and similar conversations.
  • KPI recommendations and tracking: Key performance indexes (KPIs) allow employees and managers to quantify performance, devising and tracking metrics that chart progress month to month, quarter to quarter, or year to year. AI can help recommend the right KPIs (by analyzing performance data) and automatically track the right activities to reveal how well your employees are doing.
  • Analyzing past performance data: If you’ve used mostly manual processes to manage performance in the past, you probably have a ton of data you don’t know what to do with. An AI tool trained on this data can run a thorough analysis that would take humans weeks to do and produce recommendations on the fly.
  • Automating the employee review process: While you don’t want to hand off the entire employee review process to an AI (otherwise what’s the point?) there are steps you can automate or even enhance with the right tool. Sentiment analysis, for example, allows AI models to analyze your writing to help you determine how it’s likely to come across. This can help you refine your performance reviews so they communicate exactly what you’re trying to say.
  • AI-powered coaching: Having a human coach is the best way to grow as an employee. They can help you spot your weaknesses, work on your strengths, and find the resources you need to keep moving forward. But these coaches aren’t always available for one-on-one support, especially when organizations are short-staffed. An AI coach can answer some of the most common questions from employees, guide them through self-assessments, and even provide necessary resources for growth conversations.

These are just a few of the essential applications for AI-powered tools in your performance management process. There are countless ways you can use AI tools to streamline, automate, and enhance the way you help your employees grow.

The benefits of merging AI and performance management

No matter which facet of this important process you apply AI to, you’ll see some serious benefits. After all, there’s a reason these tools have become incredibly popular in the past few years, even after the initial hype died down. Here are just some ways using AI in performance management can transform the way you work:

  • More time for everyone: At the very least, even just using a tool like ChatGPT to handle some of the brainstorming and writing tasks involved in performance management will save your team a ton of time. Specialized, AI-enhanced performance management platforms can save you even more on tasks like data collection, analysis, and progress tracking.
  • Less human error: We’re all human, and every so often we make mistakes. Whether it’s as simple as a typo when entering data or a complex analysis error, these mistakes can have serious repercussions when potential promotions are on the line. AI can eliminate many of these errors, which means less time spent reviewing performance management tasks, too.
  • More accurate performance reviews: The amount of prep work involved in the average performance review can be a serious challenge. Managers comb through a ton of data to get the insights needed to get an accurate view of an employee’s performance. AI can gather that data automatically and translate it into information managers can use without manually flipping through it all. That creates better performance reviews for everyone.
  • More real-time feedback: As much as a manager might love to give feedback as soon as their team needs it, that isn’t a particularly realistic expectation. The average manager just has too much on their plate. AI tools, however, have nothing but time. AI-powered metrics and dashboards can tell employees exactly where they’re at growth-wise, meaning there are no surprises when it’s time for their annual review.
  • Increased productivity: Implementing AI tools in your performance management processes doesn’t just make your HR team and managers more productive, it can lead to productivity gains with employees, too. Copilots and similar chatbots can help employees find the resources they need when they run into issues, meaning less time spent in back-and-forths with managers.
  • Increased employee engagement: A performance management process that feels more personal and gives more actionable feedback can significantly contribute to increased employee engagement. Managers working with large teams face an uphill battle when trying to make everyone feel heard and supported. AI gives them the leg-up needed to make it happen.
  • Better employee retention: When your performance management process is consistently providing employees with the next step they need to take to grow, they’re more likely to stick with your organization. Many organizations struggle to give employees clear growth plans that combine personal goals with the company’s broader objectives. AI can crunch through all sorts of data to find those natural places where employee and organizational priorities meet.

How to responsibly implement AI technology

There’s no talking about AI without addressing the elephant in the room. AI is an emerging industry, which means there are ethical and moral considerations involved that haven’t always been addressed by the companies producing these tools. That means any leader looking to implement AI in any process has to research these tools first. Once an AI tool has been implemented, its impacts have to be reviewed regularly to avoid any potential problems.

Here are some things to watch out for.

  • Data privacy: AI models crunch through a ton of data to learn what to do, how to improve, and how to give you a better result. But do you know where that data comes from? Or how it’s used? More important, how do these models treat your data? When managing employee data, it becomes even more important to ensure your AI tools only have access to what they need.
  • Transparency: Many of your employees will likely have some reservations about having AI play a hand in their performance reviews. That’s understandable. Be completely transparent about the tools you’ll be using, how you’ll use them, and what employees can expect. This will help alleviate their fears.
  • Replace vs. enhance: Tons of folks are worried about AI coming for their jobs, and it’s hard to do your best work with that fear hanging over your head. When implementing AI, the goal should always be to enhance what human workers are already doing, not to try and replace them. But while your leaders know that, your workforce might not necessarily realize it. It’s important to not just follow this principle but to communicate it, too.

Where 15Five + AI Meet

AI isn’t a savior, come to deliver us from all the admin work taking up our days. But when you implement AI in these processes, you will save your teams a ton of time while giving them access to more accurate data from multiple sources, giving leaders a better view of how each collaborator is performing. Employees win, too, since they can get better feedback more often, even when their managers are super busy.

That’s where Spark AI comes in. This first-of-its-kind AI assistant available within 15Five is designed to streamline administrative tasks and drive measurable improvement in engagement, performance, retention, and manager effectiveness.

Spark AI helps you close the measurement-to-action loop even faster by supporting HR and Managers with things such as:

  • AI synthesized feedback insights from engagement surveys, reading through thousands of open-text comments and providing themes, insights, and next steps
  • Reduce bias and save time writing manager reviews with AI-assisted Reviews
  • Providing managers with an AI Manager Copilot for real-time assistance within the flow of work so they can support their teams with things like creating more effective 1-on-1s

Learn more, or book a demo with the 15Five team.