Is the future of performance reviews now intrinsically tied to AI? That could just be the case. With the widespread adoption of AI tools, there is a growing desire to utilize them for HR-based applications, whether for hiring or simply communicating with employees. There is currently a lack of clarity on where the technology is best optimized, but businesses have turned their attention to time-consuming tasks, hoping to find improvements via artificial intelligence. As a result, bosses are now using AI for performance reviews, putting the fate of employees in the hands of technology. While some degree of efficiency can indeed be achieved by this strategy, it’s essential to consider what a business might be giving up in the process.
The use of AI in performance reviews is a controversial topic, but it must be discussed to prepare for the future of management and HR. (Image: Pexels)
AI Performance Reviews: Is This the Future of HR?
IBM has a suite of tools for HR management, and Microsoft has another for the deployment of AI agents. Human Resource Information Systems (HRIS) like BambooHR and Paylocity have also integrated AI technology to simplify their use, with tailor-made insights serving as their primary attraction.
Citi’s internal Performance Assist tool is offering its managers a way to draft their evaluation reports to ensure that the grueling task of reviewing employees can be simplified by AI. Across operations, HR-related technology is being optimized by AI, offering a more enhanced perspective for users to draw from.
Using AI for performance reviews can be helpful in many ways, pulling data from different systems and feedback from across the workplace to proffer one consolidated report. The most challenging aspect of a performance review is ensuring all information is fairly considered, and AI-driven reviews help achieve that to a degree. With organizations looking to replace their HR department entirely and flatten the managerial segment of their workforce, a rise of companies using AI reviews appears to be inevitable.
Should Bosses Use AI Reviews to Evaluate Performance?
The question of whether organizations should use AI in their performance reviews is a complex one. The technology exists to make the lives of employees easier, and choosing to shun it entirely could see companies miss out on key data and efficiency gains. What looks like a marginal difference on paper adds up to a substantial difference in practice. It is also true that, regardless of whether AI use is permitted by employers, the rise of shadow AI implies that curious employees might be inclined to try it out independently.
Critics of AI technology frequently remind users that an over-reliance on such technology can dumb workers down, discouraging them from improving their shortcomings. Instead, they can rely on the technology as a crutch to do it for them. Managers and HR leaders who no longer have to understand data or use their critical thinking to assess employees risk losing out on any development in the skills necessary to perform their jobs.
AI Is Not Infallible: Acknowledging Its Limitations Is Part of the Process of Adoption
Despite the inevitability of AI, it is important to employ caution in all interactions with this technology. AI relies on data for training, and the release of employee information into these systems does not bode well for employers. These tools are far from infallible, and Deloitte’s recent failings with AI-based reporting suggest that there are high risks of errors and bias that are shared by these systems.
Using AI tools in hiring is a controversial subject for a reason, opening companies up to allegations of bias and discrimination through their usage. Relying on AI for performance evaluations can have similar consequences, leaving the organization with an enraged workforce, confused about why their evaluations don’t reflect their actual contributions to the organization.
As a topical example, like the data collected and annually presented by the Spotify Wrapped music streaming reports, there is great potential to consolidate information in a more consumable format. Similar to the listening reports provided by Spotify Wrapped, it is also easy to find inaccuracies and flaws in these assessments. While errors in a fun end-of-the-year report are easier to forgive, those that may surface in reports from companies using AI reviews for employees have more severe consequences.
AI May Be Used for Performance Evaluations, but Human Supervision Remains Essential
Can a manager truly be good at their job if they struggle to accurately assess the employees they supervise or provide feedback in their own words? The problem lies in treating AI as an infallible tool that gets the final say in all things. Companies that reject the use of AI in their performance reviews risk becoming stuck in their ways, limiting their understanding of the technology enveloping their industry. At the same time, treating the technology as the one-stop solution to all business challenges is risky.
If AI is indeed utilized for performance reviews in 2025 and beyond, it is important to adopt such technology slowly to understand its operations and limitations. It is equally important to ensure that managers and HR teams are trained to understand the consolidated data they are presented with to make their own review of the employee’s performance. Betterworks found that 75% of employees are supportive of AI-generated performance reviews as long as a human supervisor gets the final say, making the conclusive report on their own.
This supervision is an essential part of adopting AI technology, but it is important to provide concurrent training as well. Studies have shown that recruiters relying on AI are susceptible to accommodating its biases without question, which could severely affect any workforce. Reducing some of the workload of managers who have to create performance reviews is a considerate gesture, but considering the importance of these evaluations for the future of these employees, it is also important to ensure the technology is adopted carefully.
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