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Optimizing Performance Management with AI

Chris Wollerman

March 27, 2024

Optimizing Performance Management with AI

Over the past year, there has been an explosion of tools using AI to help businesses in many areas, including performance management, with the promise of increasing productivity and saving costs. At Inspire Software, we recently completed our own end-of-strategy-year performance cycle over the past few weeks, utilizing the Inspire AI assistant tools at all levels, including goal generation, performance agreements, 1-1 conversations, self-assessments, 360 feedback, and performance appraisals. The feedback from our employees and managers has been extremely positive. Not only has AI been a huge time saver for everyone involved in performance activities, but the quality of the data created, as well as the overall performance of the people and organization, has improved dramatically. This blog touches on several examples of how AI is being utilized within the various performance activities. 

Goal Generation
For goal generation, Inspire’s AI assistant is utilized at the corporate strategy, individual, and team leader level to help users brainstorm objectives that solve specific challenges, help users align to corporate goals based on their role, or select goals from examples. The AI assistant takes some basic user information and then builds a prompt behind the scenes that combines expert guidance from leaders in the field of SMART goals and OKRs to formulate a high-quality goal or OKR using best practices in the industry. The results are better goals that are more specific, measurable, motivating, and attainable at all levels.

1-1 Meetings 

For 1-1 meetings, Inspire can help individuals and managers improve the quality of their regular performance conversations around goals to increase progress and focus on the balance of direction and support users need to execute. Managers are provided AI-generated coaching advice based on their direct reports’ development level on their goals, along with their personality types based on the DISC model. Individuals are also given tips on how to prepare for their 1-1 meetings, how to communicate their achievements and challenges, and how to ask for feedback and support. The AI assistant also helps users document their 1-1 meetings and track their action items and follow-ups that can be easily referenced and incorporated during the end-of-cycle performance activities. 

For self-assessments, Inspire leverages AI to help users reflect on their performance by summarizing their goal accomplishment and recognition data. The AI assistant guides users through a series of short prompts that help them evaluate their strengths and areas for improvement, based on their goals, competencies and adherence to company values. The feedback from users has been extremely positive with comments that indicate many people actually enjoy writing their performance assessments now with the valuable help from AI, who dreaded doing it manually  in the past. 

360 Feedback 
The Inspire AI assistant helps users write fast and effective 360-degree feedback statements that are specific, actionable, and respectful, using natural language processing and sentiment analysis. The AI assistant also helps users request feedback from others, such as peers, managers, direct reports, or external stakeholders, and aggregates the feedback data into a comprehensive report that highlights the user's performance and development needs. 

Performance Appraisals
For performance appraisals, Inspire uses AI to help managers and employees have meaningful and fair performance reviews. The AI assistant helps managers synthesize the data from the self-assessments, 360 feedback, recognition awards, and 1-1 meetings, as well as contribution and progress data from their goals during check-ins throughout the full performance period and generate a performance rating and a summary of the employee's achievements with areas for improvement. This helps eliminate the common problem of recency bias where manual appraisals usually only reflect the most recent performance while contributions throughout the full cycle are forgotten, or de-emphasized.

The AI assistant also helps managers prepare for the performance appraisal meeting, by providing them with tips on how to communicate the ratings, how to recognize the employee's contributions, how to address any performance gaps, and how to set development goals for the next cycle.  Similar to the expert guided prompts used in the 1-1 conversations, the AI assistant utilizes the employees’ personality types to assure that the appraisal is written in a style that is most preferred by the employee. 

As summarized here, AI is a powerful tool that can help optimize our performance management processes and outcomes. A recent CEB survey found that managers spend an average of 210 hours a year in performance management activities. Managers said their employees, in turn, each spend 40 hours a year. We estimate that with AI in Inspire, managers and employees can save 50% of the average time spent.

At Inspire Software, we are proud to be at the forefront of this innovation and to share our learnings and best practices with our clients and partners. If you are interested in learning more about how Inspire can help you transform your performance management with AI, please check out my upcoming webinar on 4/24 by registering here, and visit our website here to contact us for a demo.