Employers Start Using AI To Set Raises Based On “Predicted” Performance

Welcome to the future, citizen, where employees not replaced by robots will be granted raises based on their predicted performance by a computer.

And no, this is not some dystopian vision of the future: IBM is already doing just that – using their “Watson” artificial intelligence to look at an employee’s “experiences and projects” and integrating data from their internal training system to assess whether an employee has gained new skills. 

According to Bloomberg, when performance review time rolls around at IBM, employees get judged not only on their past accomplishments (and failures) but also on how they will perform in the future.

How can IBM predict the future? In a word: Watson.

Managers then incorporate Watson’s assessment into account when they make bonus, pay and promotion decisions. 

“Traditional models said if you were a strong performer in your current job that was the singular way that you got a promotion,” said the IBM vice president for compensation and benefits, Nickle LaMoreaux, adding: “Well, we certainly still care about performance”… but there’s a catch:

That now includes hypothetical future performance, too. IBM claims Watson has a 96 percent accuracy rate, as compared to IBM’s internal analysis with HR experts. The company spot-checks employee performance against its predictions.

Employers have traditionally relied on past accomplishments, performance improvements and other hindsight metrics to make compensation decisions. As LaMoreaux explains, “the half-life of skills is getting shorter and shorter,” meaning that things employees could do yesterday doesn’t matter as much compared to what they are predicted to do tomorrow. 

A survey of over 2,000 organizations by Willis Towers Watson found that over 40% of people are planning or considering changing the primary focus of performance management to include future potential and new skillsets. 

The shift to skills-based performance management is motivated, in part, by employers that say they’re struggling with a skills gap. A National Federation of Independent Business survey from June found that more than one-third of small businesses have open positions. The existence of a worker shortage is debatable. Employers claim they can’t find the right people, but they also haven’t raised wages much, indicating they’re not trying very hard. -Bloomberg

IBM says it can’t find enough candidates with the right skills to fill seats – particularly in technology positions. In order to adapt to changing needs, IBM shows current employees what skills they require so that they can undertake corresponding training in order to “level up.” As a result, IBM says their employees take an average of almost 60 hours of education per year.

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Author: Tyler Durden

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