There are now vast numbers of technologies available to people professionals for use in performance management. This ranges from performance meeting scheduling, 360-degree feedback and performance dashboards, through to more sophisticated technologies that predict group performance and recommend personalised development plans. 

As metrics and measurement continue to drive business decisions, people analytics provide valuable insights to inform performance management practices. These insights can help people professionals respond to shortfalls in performance and the way it is managed in a timely way and identify successes to be celebrated.

A technology-driven performance management system can sit across all stages of the process. The CIPD’s factsheet outlines the main stages of performance management. Here are some examples of how technology is being used to inform, measure and manage performance:

Technology has the power to bring significant benefits to organisations. When it is used responsibly, it:  

1    Reduces human bias to deliver fair and effective performance management practices, supporting people professionals to:

• gather real-time performance data to improve the quality of appraisals
• collate and anonymise peer feedback where appropriate
• empower employees and managers to improve their performance with real- time performance feedback
• provide personalised development that helps increase employee contribution
• develop personalised incentives for employees.

2    Delivers cost efficiencies through automation, reduced error, and prompting a change in behaviour or practices following performance feedback, supporting people professionals to:

• reduce operational inefficiencies (eg identifying alternative routes to reduce travel time)
• prompt early action, reducing turnover costs (eg analytics to predict employee turnover intentions using various data sources including demographics, performance reviews, employee surveys).

3    Increases transparency in the performance management process by enabling employees to view and track their own performance review records online. Clarity created through access to real-time feedback and transparency in what performance indicators are being measured will allow employees to act as agents of their own careers.

4    Increases compliance and eases reporting through use of monitoring and wearable technologies, raising awareness of adherence, and providing feedback to employees and organisations. For example, in relation to health and safety practices where smart hardware and software tools have emerged to mitigate the risk of occupational hazards (eg safety wearables for safe lifting, safety compliance on speed or working hours).

When technology is not used responsibly, organisations and their people are exposed to risks. The most pervasive risks are: 

1    Breach of trust and dehumanisation caused by the introduction of technology to monitor employees. CIPD research found that 73% of employees reported monitoring was damaging to trust, and 43% said it made it easier to violate their personal privacy. Reasons a breach of trust can arise include: 

• no clear consent (eg The Telegraph introduced activity monitors that recorded how long employees spent at their desks without warning, resulting in a backlash and subsequent U-turn from management).

2    Lack of accountability for decision making, allowing decisions to be made by algorithms rather than human managers.

3    Data security and privacy risks, which can arise through the collection, storage and use of data and must be considered carefully. Discoverability of data, how decisions can be challenged and how confident employers are about the robustness of data are key. It is vital to ensure that all things are recorded appropriately and accurately. Employees must be trained on the appropriate use of data, not using it for unpermitted reasons (eg using shop CCTV to discipline employees, when its use is for customer security purposes).

4    Potential increased physical and psychosocial risks, for example through: 

• feedback fatigue, which can arise when employees receive too many notifications on their performance. Careful consideration should be given to the importance and impact of the feedback, particularly where automated feedback is frequent, as research has identified that it takes on average 64 seconds to recover from every email interruption
• disclosure of an employee’s location, either internally (ie to a manager) or externally (ie due to hacking) presenting threats to personal safety (eg delivery drivers being hijacked or an on-call firefighter’s exposure to harmful behaviour such as stalking)
• exposure to algorithmic-driven changes to the design and management of work that do not involve human intervention and ethical consideration, and therefore increase stress, drive presenteeism or cause physical or psychological harm (eg research has shown long-distance haulage drivers feeling pressured not to take their mandated rest breaks to achieve delivery targets)
• out-of-hours work engagement impacting on work–life balance, particularly where mobile technologies are used for work. For example, CIPD research has shown that 29% of employees say portable devices blur boundaries between work and home life, and 30% say portable devices make it difficult to switch off from work, with 24% reporting work has a negative impact on physical health and 26% reporting the same on mental health.

5    Becoming a barrier to equality, diversity, and inclusion: discrimination can arise because:  

• people are not being measured against the appropriate metrics or KPIs and do not feel as though they are able to question these metrics
• redacting information from datasets can make an artificial intelligence (AI) model less accurate or fair. 

There is a growing body of research that helps us understand how technology can be used responsibly and the possible negative outcomes when certain things are not considered. This research, and a series of stakeholder roundtables, have informed these guiding principles. 

Knowing why you want to use technology in performance management can help to define the scope of the development, the procurement, the implementation plan and how the technology and its impact should be monitored. 

Consider where technology could deliver gains. For example, could access to big and real-time data add more value to an appraisal? Or could adding wearable technologies encourage people to meet specific performance targets?

Our guide on responsible investment in technology provides examples of when professionals and leaders have invested in technology in ways that have benefitted people and the organisation.

Involving a broad range of stakeholders in discussions about what technology to use, how it is introduced and how it will be used can improve the likelihood of achieving desired outcomes. For example, when sourcing new wearable technology in managing employee performance, consulting with line managers from different departments and locations can ensure that key data fields are included and that the format of outputs meets the needs of end users. 

The introduction of any technology may lead to job losses, changes to established processes, or at least training needs in your team and other parts of the organisation (such as line managers). People professional involvement early in decision-making can allow the organisation to plan accordingly and manage risks to job insecurity, anxiety around change and learning needs. 

CIPD research suggests that technology is most effective when there is a clear plan for ‘people impact’ and when the approach adopted is the least intrusive and least resource intensive. Conduct a risk assessment to identify potential benefits for employees and any negative effects monitoring may have on them. Any adverse impacts on individuals should be justified by the benefits to the employer and others, and consideration should be given to whether less intrusive alternatives are available. 

People professionals have a role in ensuring that any technology implementation supports and enhances productivity and employee job quality. Job complexity, skills utilisation and workers' autonomy all influence the likely success of technology in supporting strategic objectives.

Considering the impact of introducing the new technology, and specifically the person specification for the new role, will help identify potential risks to the individual (such as anxiety) and organisation (such as a skills gap) and allow early action to be taken (such as through training or job crafting).

Those directly affected by technology, who are in the role that the technological solution seeks to change, will have valuable insights into design requirements and potential risks of an automated solution. CIPD research found that employees who were consulted were more likely to have a positive view of the technology’s impact on the business than those who weren’t. 

Consultation on technology for performance management could usefully include: 

• clearly explaining what you will be monitoring and why
• being explicit on how the information generated will be used
• reviewing the utility of each individual measure, spelling out the benefits to employees including how it can support compliance and job performance, to help mitigate problems with engagement and uptake
• establishing informed consent from employees, with care taken  to ensure it is freely given, as employees may feel pressured to participate.

Discussions around the introduction of new technology can bring uncertainties that may present a risk to people engaging in consultation openly and honestly if not managed carefully. For example, employees may be concerned that some roles in their team may be reduced when technology is introduced to monitor performance and identify efficiencies, or those responsible for providing feedback on performance may be concerned that the data omits key data points or lacks a personal approach. 

CIPD research shows that employees are more positive about technological changes when they are consulted about the process, with 70% reporting they felt positive about the likely impact on their job quality, compared with 20% who had not been consulted. 

Find out more about our guide on change management to make sure you have the right processes and policies in place when implementing new technology. Our guide on employee consultation provides a range of tips and strategies to help make sure consultation is done effectively.

Promoting and delivering EDI is an essential part of people management. Read our guide on EDI to find out more about how an effective EDI strategy is essential to an organisation’s business objectives. While technology offers a route to monitor progress and control for human bias in decision-making, there are several hidden barriers to EDI. When managing performance, it is vital to consider the algorithms used to monitor employee performance, and monitor them for discriminatory behaviours (eg working more slowly due to a disability). It is important to be mindful of cultural differences and monitor your system to ensure it does not discriminate against minority groups.

To counter some of the issues raised with the potential bias, organisations can: 

• use inclusive datasets for programming, as biased data will train AI to be biased (or, to use the old maxim, ‘garbage in, garbage out’); using appropriate datasets can enable inclusive practices and fair decision-making
• create diverse teams to consult and review the use of technological solutions, ensuring that employees involved in the design and monitoring of tech are diverse; this will help to identify and rectify issues of bias, including unconscious bias, and is of particular importance in the context of performance appraisal reviews
• actively monitor data to ensure that there are not any unintended impacts of the use of technology, whereby an attempt to remove bias leads to a different bias (such as when the software may omit terms or place an overreliance on experiences that are not accessed by all socioeconomic groups) 
• report on EDI metrics (such as performance ratings for minority groups, gender pay gap) and include relevant algorithms in decisions on grading, incentives and rewards, and how they are programmed to minimise biases; this transparency and critical review should minimise bias through open scrutiny
• consider evidence critically to ensure that qualitative and quantitative data is interrogated fully (eg look beyond mean scores to examine the spread of data points or means for different groups and use external benchmarking data). 

The variety of technological solutions available on the market to support managing employee performance can feel overwhelming. Ensuring that providers demonstrate a commitment to the responsible use of technology in their design, implementation support and ongoing management process can help you in your efforts. This could include: 

• examining the evidence-based principles used to inform design; for example, when selecting a performance management tool, ask yourself the same questions about the tool that you would ask if you were designing a manual process. Considering the CIPD’s principles of performance management could provide a helpful steer.  
• checking for inclusivity at all stages of design and implementation – carefully consider and question vendors about usability and data capture to avoid any discriminatory practices. Questions could include: 
  • To what extent has the technology been user-tested by diverse groups of people, including different demographic groups, disabled and neurodivergent groups?
  • How will your organisation be assured that diversity metrics are monitored on an ongoing basis and what action will be taken to address any bias identified?
  • To what extent can metrics and KPIs be adapted by managers and employees? 
• starting small and piloting the approach when using AI – by taking this approach and focusing on AI adoption in low-risk, low-complexity tasks, organisations can build trust and experience with AI before deciding whether to invest in larger-scale projects. This could include running AI-driven assessments and manager-driven processes in parallel to provide a more accurate picture of an individual’s performance 
• adopting an agile approach – allowing for testing, learning and refinement in the early stages of procurement can build confidence in the approach and ensure organisational and people needs are met. For example, discussing with employees and other stakeholders whether the default metrics that the solution provides are the right KPIs to focus on and testing it.

Our guide on responsible investment in technology has been designed to help people professionals and leaders invest in technology in ways that benefit people and the organisation.

Technology can be used to help organisations stay up to date and comply with employment law; however, it is also important that people professionals are principles-led and look beyond the rules to do what is right. It is important that organisations: 

• follow relevant employment legislation – and keep proper evidence to back up performance appraisals to avoid legal pitfalls of monitoring performance
• follow relevant data security legislation – the Information Commissioner’s Office (ICO) in the UK states that before deciding to introduce monitoring arrangements, employers should:
  • be clear about the reason for monitoring employees and the use of data
  • carry out a risk assessment to identify any potential benefits for employees and identify any negative effects monitoring may have on them. Any adverse impact of monitoring on individuals should be justified by the benefits to the employer and others 
  • ensure that employees are aware of any monitoring, the reasons for using it and how information can be used 
• use expertise to inform your practice and be aware of your own level of data literacy – include experienced professionals to ensure their knowledge and expertise of the tasks being created, automated or augmented are used to shape the technology being developed and ensure compliance with the organisation’s practices. Consider getting an external consultant to advise if you do not have internal expertise.   

Communicate to employees how technology is used to manage and enhance employee performance. Respect privacy and confidentiality, be transparent, and provide opportunities for employees to opt-out where reasonable. 

Managers contribute to an organisation’s responsible use of technology. When managers manage well and build trust-based relationships with their team, they help to create an environment that is open and respectful, in which people feel ‘psychologically safe’. This means individuals feel able to speak up about concerns regarding the use of technology in the knowledge they will be listened to as well as receive support and understanding. This can help to identify hidden issues not otherwise identified by technological solutions, such as in performance metrics, or unintended risks to performance due to feedback fatigue.

Find out more about how line managers can support the people profession in delivering impact for the organisation and its people.

The rapid socialisation and advancement of AI has the potential to influence all aspects of performance management. Yet the speed at which the technology has developed has meant that research, practices, and policy are lagging. There is still much we need to learn about the impact of AI in managing performance, with concerns for large-scale misinformation, discrimination and unintended consequences dominating recent discussions. Organisational policies regarding acceptable and ethical use of AI are not well developed yet, with clear guidelines for good practice also still in their infancy. With data more readily available, there's potential to lean on AI to analyse and report on performance for lots more tasks. The tension lies in the 'balancing test' of data protection – do the boundaries for an individual's need for freedom and privacy need to be redrawn? 

Applying an evidence-based practice approach to decision-making will help people professionals draw on the best available evidence and consider new knowledge. Specifically, it is important for people professionals to remain alert to: 

• new evidence as it develops
• emerging AI regulations and guidelines to ensure compliance and ethical decision-making
• ongoing discussions regarding acceptable and ethical use of AI
• the changing needs and concerns of the diverse stakeholders impacted by decisions to employ AI tools.

Staying up to date with new developments will allow people professionals to embrace the opportunities and address the challenges presented by AI.

This checklist can be used to help you consider the responsible use of technology in your organisation. While many decisions may fall outside your remit, for example by a central team or within the IT department, having oversight of these issues will allow you to consider the people impact of technology use and to take timely and appropriate action. 

Responsible use of technology

CIPD Guide: Responsible investment in technology 

CIPD Article: Making reward more accessible and performance management fairer.

For further information on research and thought leadership on technology, the workplace and people management, the CIPD’s research series explores technology use and its impact on people practice in the physical and digital workplace. 

For more detail on the case for adopting technology responsibly, and its impact on good work, see the Institute for the Future of Work’s (IFOW) Case for importance: Understanding the impacts of technology adoption on good work. 

Performance Management

CIPD guide: Performance management: an introduction 

CIPD case study: Evolving a new approach to performance management, Novartis

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CIPD. (2020) Employee monitoring: what’s acceptable? London: Chartered Institute of Personnel and Development . 

CIPD. (2020) Workplace technology: the employee experience. London: Chartered Institute of Personnel and Development. 

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