Through a variety of ways, artificial intelligence (AI) can help organizations enable and focus on better decision-making. AI could take over administrative roles and allow humans to prioritize more valuable things that require more time. The intelligent agent can take over manual tasks and enable process automation. AI can also plan decisions or predict results based on historical data.
That holds true even at the departmental level. Freeing managers from worries related to repetitive, administrative, and employee compliance tasks gives them more time for performance management activities. This is reflected in the use of AI as a behavioral assessment tool, data-driven processes where teams are coordinated through feedback, and more opportunities for meaningful human interaction.
AI in Performance Management
According to a study conducted by the University of Twente, there are two ways to implement AI in an organization. On a small scale, AI can assist a manager in improving small parts of the system, like inventory optimization. On a larger scale, AI could play a role in redesigning core processes at the organizational level.
One thing to pay attention to is knowing which type of implementation to choose. In an environment where human interaction and feedback are essential, it would not be the wisest choice to go for the second option as it could affect human connections.
The best-case scenario is to benefit from an assisting AI as it would help the manager make decisions while the assistant processes a vast amount of data. This will not only speed up the decision-making process but also guarantee the data veracity.
AI makes its mark on performance management systems through digitalization. Real-time feedback is important now more than ever due to the changes within performance management. The traditional yearly review is now being replaced by more frequent and informal check-ins as this would enable the shift from talking about people to talking with people. The 360-degree feedback practice focuses on asking colleagues for feedback on an employee’s performance.
Another strong point of AI is that it eliminates the biases toward individuals by assessing patterns and historical data with no opinion that might dilute decisions. While the line managers or HR may have their personal opinions about employees coincide with their responsibilities, AI supports decision-making by eliminating biases and diminishing the number of human errors.
At the HR department, the implementation of an AI system will not only process the data faster but will also deliver robust data collection, frequent fact-based performance, and improvement discussions. HR managers are responsible for their teams’ attitudes and behavior so that they can truly contribute to organizational goals.
In 2018, IBM realized the need for AI in mitigating biases and improving departmental performance. This is why IBM Smarter Workforce Institute wrote the paper “The role of AI in mitigating bias to enhance diversity and inclusion,” in which practical recommendations are offered for organizations that are looking to adopt AI in their HR daily activities.
Efficient and effective recruitment – A recruiter’s main challenges are prioritizing all the roles they are responsible for and finding a way to differentiate among candidates that applied for the same position. Deploying AI determines how long a job requisition will take to fill based on past data so that recruiters can prioritize the roles available.
Moreover, AI can predict future performance by determining the match between a resume and the job requisition and filtering candidates. The challenge in IBM regarding effective recruitment is to help HR managers surface the top candidates for the open positions and prioritize the most important requisitions. Their solution is IBM Watson Recruitment, an AI system that assesses information about the job market and past experiences of potential candidates in order to predict the necessary time to fill in positions and spot the most suitable candidates.
The huge advantage for recruiters is that they can focus on building and nurturing relationships with applicants. At the same time, AI collects the demanded skills from job requisitions and generates a score against skills mentioned in resumes. Finally, IWR watches over the hiring decisions to make sure they are free from bias and turns the candidate and recruiter’s experiences into better ones.
Enhancing motivation – At IBM, the individual needs of employees are essential, and managers get alerts about it. For example, the manager is alerted when there is an employee with years of experience in the company, has skills, and is ready for a promotion. The same applies to the case of employees with a higher propensity to leave or when employees from a specific department are at risk of missing their targets.
Through this alarm signal, managers are able to make decisions over the organization’s talent management approach. Another AI implication is the chatter analysis used to capture the top three internal issues from social media sources. Leaders can receive personalized recommendations to increase the team’s engagement. Other benefits brought by AI can be smarter compensation planning and career development.
The drawbacks of AI systems can be avoided by making sure the data is never used as a sole determinator in decisions.AI initiatives can barely break organizational barriers, based on a survey conducted by Harvard Business Review in which only 8% of firms engage in core practices that support the adoption of Artificial Intelligence. The shift towards AI should start by aligning the organizational culture and the internal operating ways to support digital transformation. Here are the three main actions to scale up AI:
Replace siloed work with cross-functional teams collaboration. The mix of perspectives increases the impact AI has over the processes as it ensures that projects address broad organizational concerns and not just isolated ones. Moreover, if end users are required to test what development teams work on, the chances of adoption increase.
Abandon the top-down approach. Integrating AI into processes will increase the trust of employees in algorithms. They are the ones who will ultimately make a decision based on the algorithm result and their experience. Once they feel empowered to make decisions without having to consult a higher-up, they will get a taste of what AI can offer: freedom of action.
Embrace an agile, experimental, and adaptable mindset. The idea of having an idea baked before it is deployed must be replaced with a test and learn vision. This reduces the fear of failure and allows companies to correct minor mistakes before they become costly ones by receiving early feedback from users.
AI’s ability to promote automated processes, analyze data, predicts trends, and even build frameworks helps the organization in its strategy and business planning. In order to maximize the product and effects of AI, it is essential to establish a strong strategy mindset.
The KPI Institute offers a program that would help you design an organization’s strategy and plan your business using a strategic framework. Enroll now in the Certified Strategy and Business Planning Professional Live Online course! For more details, visit The KPI Institute’s website HERE.
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Editor’s Note: This piece was first published in the 22nd PERFORMANCE Magazine – Printed Edition. The KPI Institute’s Business Research Analyst Aida Manea discusses in this article how AI supports decision-making by eliminating biases and diminishing the number of human errors.
Nothing ever stops in the fast-changing world of business—a fact that is not lost on Meshari Alotaibi, a data and strategic initiatives manager with extensive expertise in management consultancy, data analysis, and leadership.
A Saudi MBA graduate and Doctoral candidate in Management, he recently completed the Executive Postgraduate Diploma in Strategy and Performance from the KPI Institute. Meshari excels in strategy development, performance management, and transformational projects. He currently contributes to strategic initiatives for the consumer protection department at NEOM. In this interview, he touches on the importance of continuous feedback to drive improvement.
Trends
In your opinion, what are the key trends in Organizational Performance Management in 2024?
In 2024, organizations are adopting AI to track performance, foster agility, and enhance employee experience. AI tools provide real-time insights, enabling quick strategy adjustments and continuous improvement.
Which of the existing trends, topics, or aspects within Performance Management have lost their relevance and/or importance in your opinion?
Traditional annual reviews and rigid goals are becoming obsolete. Shifting to continuous feedback has significantly increased employee satisfaction and adaptability to changing business needs.
What does the corporate performance management system of the future look like?
Tomorrow’s systems will be more human-centered, with AI providing real-time feedback and agile goal-setting. AI tools deliver personalized development plans, promoting continuous improvement and engagement.
What will be the major challenges in managing performance in the future, and how should organizations prepare for them?
Challenges include staying ahead of tech changes, ensuring data privacy, and fostering a growth culture. Investing in tech training and robust data protection measures helps organizations stay ahead.
How is technology impacting the way organizations conduct strategic planning and manage performance? Any specific tools you would like to mention?
AI analytics and collaborative platforms are reshaping planning and performance. AI analyzes large datasets, informing strategic decisions and enhancing performance management.
How is sustainability impacting the way organizations conduct strategic planning and manage performance? Any specific aspects you would like to mention?
Sustainability is integral to strategy, focusing on profits and social and environmental impacts. Projects incorporating sustainability metrics ensure that environmental and social factors are part of performance evaluations.
What should be improved in using strategy and performance management tools to make an organization even more resilient to future crises?
Enhancing resilience requires agile scenario planning and real-time monitoring. During the pandemic, agile performance management systems enabled quick adaptation to remote work environments.
While navigating these challenging times, what would you consider a best practice in performance management?
Effective performance management during crises involves clear communication, flexible goal setting, and adaptability. Regular virtual meetings and adaptable timelines were crucial during remote transitions.
How does benchmarking support improving performance management and target setting systems?
Benchmarking helps identify strengths and weaknesses to set realistic targets. Benchmarking against industry leaders helps set ambitious yet achievable goals, driving continuous improvement and innovation.
Research
Which organizations would you recommend being observed due to their approach to managing performance and its subsequent results? Why?
Google exemplifies innovative performance management that fosters employee growth. Their use of Objectives and Key Results (OKRs) effectively aligns team efforts with organizational goals.
Given their importance in practice, what aspects of Performance Management should be further explored through research?
Research should explore the impact of remote work on performance evaluation and enhancing diversity and inclusion metrics, which are crucial for navigating the post-pandemic work environment and striving for equitable workplaces.
What are the key competencies of a successful business leader (C-level executive)?
Visionary leadership, strategic thinking, and emotional intelligence are essential competencies for successful leaders. Leaders should exemplify these traits to drive ambitious projects with clear vision and adaptive strategies.
What are the key competencies of a strategy and performance manager that are necessary to succeed nowadays?
Successful managers need strong analytical skills, adaptability, and a deep understanding of performance metrics. Managers leverage data analytics to drive strategic decisions and continuously improve performance.
We are developing a database of subjects/degrees in Performance Management. What are your suggestions relevant to the database (i.e., subjects/degrees such as the Masters in Managing Organizational Performance)?
Consider offerings like “Advanced Performance Analytics” or “Strategic Performance Leadership” to deepen understanding. Incorporating real-world case studies enhances relevance.
What are the processes and tools you look at when differentiating a successful performance management system from a superficial one?
As a consultant, I focus on performance management systems that align with organizational goals and have clear metrics and robust feedback mechanisms. Ensuring integration with company culture and focusing on continuous improvement are crucial.
From new employee engagement to technology adoption, organizations must consider a variety of factors nowadays when conducting strategic planning and implementing performance management systems. In this interview, Yousef S. Aljomah, a program manager who works for a Saudi government entity, shares his insights on how organizations can navigate uncharted territories while getting results and staying true to their core values.
Yousef has over 15 years of experience leading high-impact strategic projects and programs in the public and private sectors. His expertise has allowed him to drive projects that align with organizational goals, improve efficiency, and promote innovation. He holds an impressive 20 certifications in strategic and project management and a Master of Science in Technology Management. Let’s find out what he thinks of today’s trends and practices in performance management.
Trends
In your opinion, what are the key trends in organizational performance management in 2024?
The path of organizational performance management in 2024 is significantly shaped by integrating AI tools. This strategic direction is in harmony with both public and private organizational development, harnessing AI-driven data analytics, integrated systems, real-time feedback mechanisms, personalized development plans, facilitation of remote work, DEI analysis, process automation, outcome-based metrics, agile methodologies, and sustainability tracking. These advancements are anticipated to drive efficiency and innovation, thereby making a meaningful contribution to the global transformation of organizational development.
Which of the existing trends, topics, or aspects within performance management have lost their relevance and/or importance in your opinion?
The outdated trends in performance management include annual performance reviews, rigid hierarchical structures, one-size-fits-all training programs, traditional office-bound work models, a sole focus on output metrics, top-down feedback mechanisms, and manual process management. On the other hand, AI tools prioritize flexibility, continuous improvement, and data-driven, inclusive approaches.
What does the corporate performance management system of the future look like?
AI will usher in the forthcoming corporate performance management system, which features integrated platforms, real-time feedback, personalized development, support for remote work, DEI emphasis, automated processes, outcome-based metrics, agile methodologies, and sustainability tracking. It will prioritize flexibility, continuous improvement, and data-driven, inclusive approaches.
What will be the major challenges in managing performance in the future, and how should organizations prepare for them?
In the future, managing performance will involve dealing with significant challenges such as adapting to rapid technological changes, ensuring data privacy and security, maintaining employee engagement in remote work, addressing skill gaps, fostering DEI, and managing continuous feedback. To tackle these challenges, organizations should invest in training, robust cybersecurity measures, flexible work policies, DEI initiatives, and advanced analytics tools.
How is technology impacting the way organizations conduct strategic planning and manage performance? Any specific tools you would like to mention?
Technology is revolutionizing strategic planning and performance management by improving data analysis, real-time monitoring, and decision-making. AI and machine learning (ML) offer predictive insights, while cloud-based platforms facilitate collaboration and scalability. Notable tools include Microsoft Power BI for data visualization, OKR software such as BetterWorks for goal alignment, and AI-driven HR platforms like Workday for comprehensive performance management.
How is sustainability impacting the way organizations conduct strategic planning and manage performance? Any specific aspects you would like to mention?
Sustainability is reshaping strategic planning and performance management by integrating ESG criteria into business objectives. Organizations are setting measurable sustainability goals, such as promoting sustainable project management practices, enhancing resource efficiency, and advancing social responsibility. Specific aspects include incorporating green project management principles, efficient resource allocation, and fair labor practices, using tools like the Project Management Institute’s (PMI) Code of Ethics and Professional Conduct and ethical decision-making frameworks.
What should be improved in the use of strategy and performance management tools to make an organization even more resilient to future crises?
To enhance organizational resilience, strategy and performance management tools should improve real-time data collection and analytics for faster, data-driven decision-making. Tools should support agile methodologies, integrate robust risk assessment and mitigation features, and foster cross-functional collaboration. Additionally, incorporating advanced scenario planning, employee well-being monitoring, AI, automation, and sustainability metrics will help organizations better navigate uncertainties and maintain performance during crises.
While navigating through these challenging times, what would you consider a best practice in performance management?
During challenging periods, it is advisable to incorporate real-time feedback mechanisms and continuous performance evaluations. These approaches promote agility, maintain employee alignment with evolving objectives, cultivate continuous development, and facilitate prompt adaptation to strategies. Consequently, they also strengthen resilience and sustain productivity.
How does benchmarking support the improvement of performance management and target-setting systems?
Benchmarking helps improve performance management and target-setting systems by comparing them to industry standards and best practices. It identifies performance gaps, sets realistic and competitive targets, fosters continuous improvement, and encourages the adoption of proven strategies. Ultimately, it enhances overall organizational efficiency and effectiveness.
Research
Which organizations would you recommend being observed due to their approach to managing performance and its subsequent results? Why?
In Saudi Arabia, several organizations—namely Elm, Saudi Arabian Military Industries (SAMI), and NUPCO—are Public Investment Fund (PIF) entities known for their exceptional performance management approaches. These organizations have significantly improved their service quality and customer satisfaction through digital transformation efforts and data analytics. Their emphasis on innovation and continuous improvement demonstrates best practices, resulting in enhanced operational efficiency and alignment with the objectives of Saudi Vision 2030.
Given their importance in practice, what aspects of performance management should be further explored through research?
Some key areas for further research in performance management include the impact of AI and ML on performance outcomes, the effectiveness of real-time feedback systems, strategies for enhancing employee engagement and motivation, the role of agile methodologies in performance management, and the integration of sustainability metrics. Understanding these areas is crucial to improve organizational efficiency and achieve strategic goals.
What are the key competencies of a successful business leader (C-level executive)?
The key competencies of a successful C-level executive include a strategic vision, strong decision-making and leadership skills, excellent communication, financial acumen, the ability to drive innovation, and adaptability. They also need to possess ethical judgment, resilience, customer focus, and a global perspective. These skills enable effective interaction with stakeholders, adaptation to market changes, and successful organizational leadership.
What are the key competencies of a strategy and performance manager that are necessary to succeed nowadays?
The key competencies of a successful strategy and performance manager include strong analytical skills for data-driven decision-making, excellent communication and leadership abilities, strategic thinking, and the ability to drive continuous improvement. Proficiency in performance management tools, knowledge of AI, adaptability to change, and a focus on achieving organizational goals are also essential.
What processes and tools do you look at when differentiating a successful performance management system from a superficial one?
When distinguishing between a successful performance management system and a superficial one, it is important to consider the following key processes and tools: goal-setting tools, data-driven decision-making tools, and agile practices.
Performance Magazine is your source of strategy and performance management perspectives from practitioners and professionals around the world. For more interviews, click here.
Nawaf Al Omari boasts over a decade of experience in optimizing teams and driving project management success. He excels at forecasting staffing needs, resource management, and fostering collaborations, with a 40% increase in stakeholder satisfaction. Prioritizing data-driven decision-making, he is adept at mitigating risks, tracking KPIs, and achieving cost reductions. Nawaf is strongly committed to delivering results and operational excellence.
In this interview with Performance Magazine, he explores how establishing strategy and performance management systems can improve the resilience of organizations to future crises. He also shares his perspectives on cultivating best practices in employee engagement that highlight professional development, well-being and flexibility.
Trends
In your opinion, what are the key trends in organizational performance management in 2024?
Employee alignment with corporate objectives is essential to the success of a corporation. By ensuring that everyone is working toward the same goals, productivity and efficiency are maximized.Some crucial techniques involved in this approach are clear communication, goal setting, performance management, rewards and recognition, and training and development.
Which of the existing trends, topics, or aspects within performance management have lost their relevance and/or importance in your opinion?
While performance management is continuously evolving, it’s important to understand that a few aspects have lost their relevance, such as limited employee involvement. Traditional performance management systems frequently did not involve employees in setting goals or providing feedback. The current trend emphasizes collaborative goal-setting, self-assessment, and two-way communication to create a more engaged and ownership-driven approach.
What does the corporate performance management system of the future look like?
Gamificationis a cutting-edge strategy that may successfully bring employees on board with company objectives. This technique can improve employee engagement, motivation, and performance in the workplace by introducing game-like features, including competition, incentives, and feedback.
What will be the major challenges in managing performance in the future, and how should organizations prepare for them?
Leading a globally distributed workforce has distinct difficulties, particularly considering the growing popularity of remote and hybrid work arrangements. The reason is because it might be difficult to manage and assess performance in many places effectively due to the issues that come with collaboration, communication, performance evaluation, and engagement, as well as the new approaches required in these areas.
How is technology impacting the way organizations conduct strategic planning and manage performance? Any specific tools you would like to mention?
With the use of big data and analytics technologies, companies today can collect and examine enormous volumes of internal and external data to gain a greater understanding of consumer behavior, market trends, and rival performance.In addition, businesses can use sophisticated software to simulate several strategy alternatives and assess possible outcomes while reducing risks.
In terms of performance management,technologies can help organizations facilitate regular feedback and provide data-driven performance evaluation. This approach can help assess outcomes objectively, track progress, and define SMART targets.
How is sustainability impacting the way organizations conduct strategic planning and manage performance? Any specific aspects you would like to mention?
Sustainability is essential, not simply a trend. Enterprises that adopt and incorporate sustainability into their fundamental approach will be in a favorable position for long-term success. Organizations can create long-term value, enhance their reputation, and contribute to a more sustainable future. It’s a win-win for the environment, society, and the organization’s bottom line.
What should be improved in using strategy and performance management tools to make an organization even more resilient to future crises?
Organizations must take into consideration enhanced risk management, data-driven decision-making, and employee development and well-being to enhance performance management and strategy tools for greater organizational resilience to upcoming crises.
While navigating these challenging times, what would you consider a best practice in performance management?
Organizations must develop a performance management system that, even in times of difficulty, encourages engagement, resilience, and a workforce prepared for the future by using these best practices. During these difficult times, there can be a shift from passively assessing performance to actively assisting and growing staff members. Emphasizing employee development, well-being, open communication, flexibility, and adaptation during challenging circumstances can help businesses overcome obstacles and build a resilient and engaged workforce that is ready for the future.
How does benchmarking support the improvement of performance management and target-setting systems?
Enhancing performance management and target-setting systems may be achieved by benchmarking, i.e. the method of evaluating an organization’s performance against competitors in the same industry or against industry best practices. Organizations may discover areas for development, obtain important insights, and eventually create and execute a more flexible and effective performance management and target-setting system by utilizing benchmarking successfully.
Research
Which organizations would you recommend being observed due to their approach to managing performance and its subsequent results? Why?
Several firms are noteworthy for the way they handle performance management and the outcomes they produce. Here are a few companies known for their innovative performance management approaches:
Adobe removed annual reviews for frequent check-ins to foster continuous development.
Netflix applies 360-degree feedback for a more well-rounded perspective on employee performance.
Microsoft moved away from annual reviews to focus on goals and development through regular feedback.
Given their importance in practice, what aspects of performance management should be further explored through research?
Several performance management aspects require more investigation because of their increasing significance and dynamic character in the workplace. Some of these are the relationships between the well-being of employees and performance management as well as the analytics and data used in performance management.
What are the key competencies of a successful business leader (C-level executive)?
They should possess fundamental abilities in the areas of strategic vision and thinking, innovation, and adaptability to handle difficult issues and guide their enterprises toward prosperity.
What are the key competencies of a strategy and performance manager that are necessary to succeed nowadays?
In today’s fast-paced corporate world, a strategy and performance manager’s ability to succeed depends on a special combination of hard and soft skills. They should have strategic thinking and planning abilities and knowledge of performance management and change management.
What processes and tools do you look at when differentiating a successful performance management system from a superficial one?
It takes more than simply looking at processes and resources to recognize the effectiveness of a performance management system. The effect on employees and the broader culture of the company are important factors to consider. Businesses might develop systems for performance management that go beyond employee evaluations. They may promote a culture of ongoing education, growth, and involvement, making the workplace better for everybody.
What are the recent achievements in generating value from performance management in your organization?
Several noteworthy successes in deriving value from performance management can be attributed to recent technological advancements and changing work environments, such as continuous performance management, personalized development, and employee engagement.
For more in-depth interviews with world-class professionals, visit Performance Magazine’s Interview section here.
No matter where an organization stands on its journey, ensuring that its performance management practices are up to par can influence its progress. Done correctly, this could be the edge that sets it apart from the competition.
The KPI Institute (TKI), through the efforts of the dedicated members of The Global Performance Audit (GPA) Unit, has successfully collaborated with the Talent and Performance Management Department of the Tourism Development Fund (TDF) to evaluate the performance management practices of the organization. This evaluation encompasses various areas, such as strategic planning, corporate performance management, employee performance management, and organizational culture.
The TDF is a young organization established in Saudi Arabia in 2020 with the mandate of driving growth in the national tourism sector by enabling private investments. With nearly 200 employees, the TDF has set up a formal division dedicated to managing strategy and performance. It comes with specialized departments responsible for handling key processes like strategic planning, corporate performance management, strategic initiatives portfolio, organizational excellence, research, and insights. Similarly, people’s performance and organizational culture are guided by specialized teams.
The KPI Institute’s maturity assessment for the division adhered to a holistic approach in both project coverage and methodology. In terms of coverage, the following organizational capabilities were evaluated: strategic planning, performance measurement, performance improvement, employee performance culture, and organizational culture.
Figure 1. Integrated Performance Management Maturity Model | Source: The KPI Institute
Regarding the methodology, TKI’s Integrated Performance Maturity Model includes a review of formal procedures and other official documentation (outputs) and insights from employees in the organization obtained through surveys and interviews with key internal stakeholders. All findings were rated against best practices using a scoring methodology, and the final score positioned the TDF on maturity level IV out of V (see Figure 2).
Figure 2. Performance Management Maturity Level | Source: The KPI Institute
To read the full article and know more about the stages of a performance management system maturity assessment, download the PERFORMANCE Magazine Issue No. 27, 2023 – Government Edition now through TKI Marketplace.
Unlock best practices that drive success in the government sector with insights from the Tourism Development Fund’s performance management practices evaluation. Get your hands on the physical copy of the magazine via Amazon.
