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AI Changing How Employers Manage, According to MIT Sloan Analysis

Predictive analytics is becoming a key tool for evaluating business’ underlying strategic assumptions, a new MIT Sloan Management Review article notes, enabling new metrics, new key performance indicators (KPIs), and new behaviors with potential positive secondary effects on company culture. 

“With new metrics and a deeper understanding of the factors driving performance, organizational behaviors align around these new insights, setting off a virtuous cycle of learning, KPI creation, organizational behavior shifts, increased learning, and so on,” writes David Kiron, MIT Sloan Management Review editorial director. 

Company culture improves with successful implementation of AI: In a separate study, 58% of teams surveyed reported improved efficiency and decision-making through implementing artificial intelligence. Of these, 87% saw improvement in collective learning, 65% in clarity of roles, 78% in collaboration, and 79% in morale.

Kiron identifies three significant implications for practice: 

  1. “Leaders should hold themselves accountable for developing strategic measurement systems that can deepen their understanding of factors driving KPI outcomes, generate new KPIs, and adapt to new KPIs.”

  2. “Just as traditional alignment approaches have focused on cascading and linking key metrics, predictive alignment encourages the distribution of analytical tools (and expertise) across organizational functions to measure progress toward (and reassess the utility of) these metrics.”

  3. “Leaders accustomed to sitting down with different levels of management to articulate metrics that advance a given set of goals should begin to include data specialists (such as chief data officers, business intelligence executives and analysts, or data scientists) in these conversations.” 

Yes, but: Kiron’s article also suggests managers may feel pressure to accepts the results of predictive analytics. According to one example, “Management might then be evaluated, in part, on whether they follow recommendations generated by machine learning about how to support… employees.” Another notes: “Most managers now choose to accept the algorithm’s recommendations, a dramatic change from when it was first introduced.” These observations raise the question: what processes need to be implemented to ensure appropriate oversight, especially where AI has proven to be effective? 

We will discuss these trends and more at our 2022 CHRO Summit in a session titled “Workplace Technology, HR Strategy, and the Talent Crunch.” You can register for the Summit here.

Published on: May 13, 2022

Authors: Daniel W. Chasen

Topics: Jobs, Skills and Training, Technology

Daniel W. Chasen

Vice President, Workplace Policy, HR Policy Association

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Contact Daniel W. Chasen LinkedIn

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