The (possibly horrifying) killer app for AI

The original (and so far only) "killer app" was the spreadsheet. The specific spreadsheet was VisiCalc (or Lotus 1-2-3, depending on who you ask) and it was the compelling reason to get a personal computer.

We may see a killer app for AI, and from a completely unexpected direction: performance reviews.

Employee performance reviews, in large companies, often work as follows: each employee is rated on a number of items, frequently from 1 to 5 and sometimes as "meets expectations" or "needs improvement". Items range from meeting budgets and delivery dates to soft skills such as communication and leadership.

HR works to ensure that performance reviews are administered fairly, which means as consistently as possible, which often means "one size fits all". Everyone in the organization, from the entry-level developer to the vice president of accounting, all have the same performance review form and topics. It leads to developers being rated on "meeting budgets" and vice presidents of accounting being rated on "meeting delivery dates".

Just about everyone fears and dislikes the process. Employees dread the annual (or semiannual) review. Managers have no joy for it either.

This is where AI may be attractive.

Instead of a human-driven process, a company may look for an AI-driven process. The human-administered process is rife with potential for inconsistencies (including favoritism) and opens the company to lawsuits. Instead of expending effort to enforce consistent criteria, HR may choose to implement AI for performance reviews. (Managers may have little say in the decision, and many may be secretly relieved at such a change.)

This is a possibly horrifying concept. The mere idea of a computer (which is what AI is, at bottom) rating and ranking employees may be unwelcome among the ranks. The fear of "computer overlords" from the 1960s is still with us, and I suspect few companies would want to be the first to implement such a system.

I recognize that such a system cannot work in a vacuum. It would need input, starting with a list of job responsibilities, assigned tasks and deadlines, and status reports. Early versions will most likely get many things wrong. Over time, I expect they will improve.

Should we move to AI for performance reviews, I have some observations.

First, AI performance review systems may move outside of companies. Just as payroll processing is often outsourced, performance review systems might be outsourced too. The driver is risk avoidance, and companies that build their own performance review AI systems may build in subtle discrimination against women or minorities. An external supplier would have to warrant their system conforms to anti-discrimination laws -- a benefit to the client company.

Second, automating performance reviews could mean more frequent reviews, and more frequent feedback to employees. The choice of annual as a frequency for performance reviews is driven, I suspect, by two factors. First, they are needed to justify changes in compensation. Second, they are expensive to administer. The former mandates at least one per year, the second discourages anything more frequent.

But automating performance reviews should reduce effort and cost. Or at least reduce the marginal cost for reviews beyond the annual review.

Another result of more frequent performance reviews? More frequent information to management about the state of their workforce.

In sum, AI offers a way to reduce cost and risk in performance reviews. It also offers more frequent feedback to employees and more frequent information to management. I see advantages to the use of AI for this despised task.

Now all we need to do is bell the cat.