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AI has become one of the fastest evolving technologies in present era. In 2024, the AI market was estimated to have reached over $184 billion globally. In the face of this AI boom, businesses worldwide are experimenting with AI in performance management and other core operational processes. It is already shaping UAE’s workforce through HR transformation.
Performance Management Practices in the UAE
In the UAE, the AI market is expected to reach a significant $1.9 billion by 2026, projecting an almost 36.2% growth from its present numbers. This rise is attributed to a combination of global AI trends and government policies like the Centennial 2071.
However, despite the growing AI market, its potential for HR processes like performance management has somehow been overlooked. Most performance management practices in the UAE presently depend on traditional methods like Excel sheets.
These ways are inefficient and time-consuming and don’t guarantee accuracy. However, with the increasing trends veering towards a digitized economy, businesses in the UAE are bound to catch up to the global trends of automation and AI.
Implementing AI in Performance Management in the UAE
The UAE’s labour market is not only diverse, but also rapidly evolving. That’s why HR teams can find it difficult to meet the needs and challenges of a unique workforce without proper tools. Using AI to simplify HR processes like performance management is a more effective alternative to inefficient traditional methods.
Here’s some of the best ways HR Professionals in the UAE can implement AI in performance management:
1. Continuous performance assessment
AI driven software can be implemented into various operational and project management tools for better visibility into employee performance. This can help in collecting first-hand data like communication patterns and task completion rates that can later be used to generate concise performance repots and provide prompt feedback. That way tracking KPIs become much easier while reducing chances of errors.
The use of AI in performance management, particularly generative AI, has been a game changer for appraisals and employee reports. With Gen AI, annual performance summaries can be generated in an impactful and actionable manner.
These summaries can compile the data for an entire review cycle regardless of how long they are. That way continuous assessments can not only play out a role in immediate feedback but also yearly or bi-yearly reviews.
2. Identifying skill gaps
In the face of Emiratization policies, the demand for skilled workers have increased over the recent years. However, owing to a mismatch of education and skills, it has become difficult for organizations to meet these requirements. Plus, there are other factors that affect the talented workforce in the UAE. By implementing AI in performance management, businesses can take steps to bridge the gap through training programs.
Since employee performance can be monitored in real time, addressing areas of improvement becomes a straightforward process. Performance analytics reports can help managers understand where their employees are lacking and provide accurate and effective reviews. That way employees can improve consistently with continuous learning playing an important role in performance evaluation cycles.
Ensuring employee skills are aligned with organizational goals is a necessity for all companies. With AI driven performance analytics, not only does it become easier to spot skill gaps, but it also helps to create tailored upskilling programs for each employee. When performance management systems are integrated with learning management system, AI can also help in keeping track of learning progress.
3. Workforce development
Tracking employee performance metrics can help managers understand employee potential and spot any mismatch between their potential and performance. This will also help managers identify which employees are valuable to the team and have higher potential to do better in roles with more responsibilities.
For instance, performance management software like the one by Akrivia HCM offers features like n-box matrix to measure behavioural competencies. The information can help managers make strategic decisions when it comes to succession planning and internal mobility.
AI analytics can also help in understanding industry trends and forecast future organizational needs. For instance, if employers are operating in a rapidly evolving niche industry, it becomes important to maintain an adaptive workforce. By implementing AI in performance management, business leaders can forecast the needs of their business and ensure employee development according to organizational needs.
4. Automated performance reviews
With the use of AI in performance management, managers no longer have to sit through hours of work to provide relevant and effective feedback. Performance reviews can be automated and, therefore, more effective, as employees can implement it promptly.
Compared to traditional performance reviews which were spaced out quarterly, half-yearly or yearly, continuous performance assessment can instead be better suited for employee development in the competitive and diverse UAE labour market.
5. Bias-free evaluations
Since traditional performance evaluations are usually spaced out in yearly cycles, there’s chances that they can reflect managerial favouritism instead of proper performance feedback. These evaluations also run the risk of being arbitrary instead of targeted to specific improvements that can help employees improve genuinely.
But with AI in performance management, evaluations can be done automatically. The reports are based on data-backed analytics, and therefore are bias-free. They’ll be more likely to be accurate and actionable, making it much simpler for employees to act upon them.
6. Effortless conflict resolution
When integrating AI in performance management, understanding employee sentiments can become a more straightforward process. By analysing communication patterns, underlying sentiments can be estimated. That way, any conflicts can be resolved in the early stages, before they escalate.
Features like chatbots can be used to redirect and guide employees to act in accordance with HR policies, if they’re in the midst of a conflict. They can also suggest communication strategies to prompt employees to resolve conflicts on their own in an amicable manner.
7. Data-driven decisions
For traditional performance management, managers are responsible for collecting and interpreting data, for performance evaluations. But with AI in performance management, the entire data collection process can be automated.
Besides, since AI-based performance management system gather the data from various sources, the data collected is usually accurate and comprehensive, making reports more effective and detailed. This also helps managers and HR leaders make important workforce decisions.
Benefits of Using AI in Performance Management
By implementing AI in performance management, companies can ensure operational efficiency and contribute towards their employees’ professional development. Businesses can greatly benefit from AI-based performance management practices owing to the following factors:
1. Employee productivity
A Gallup report estimates that the UAE economy loses anywhere between $8.6 and $10.3 billion owing to lost productivity.
But with continuous performance management, employees would be more engaged and motivated to improve. Targeted reviews can contribute to their professional development, which in turn, adds to employee satisfaction.
2. Retention rates
Employee turnover rates in the UAE are significantly higher than the global average at 56%.
The UAE offers incentives like tax-free salaries and labour-friendly employment laws that allow workers to move freely from one company to the other. This attracts expatriate workers who work for brief periods. Some even change employers during their stay for better compensation and benefits.
But when employers show significant interest in their employees’ professional development, employees are more likely to stay loyal. Through performance feedback and upskilling opportunities and incentives, employers can convey an active interest in their employees’ professional growth. This can, in turn, hike retention rates.
3. Organizational success
With evidence-based performance metrics, business leaders can have clear picture of their talent skills. This information can not only help them set clear business goals, but also adjust and align employee skills for future business needs.
Implementing AI in performance management makes the entire process more effective and straightforward. So, by investing in their employees, they also invest in the success of their organization.
Summing Up
While HR departments in the UAE are largely dependent on traditional methods, the rapid technological development in the region emphasize the need to seek innovative alternatives. Businesses like IBM, Apple, have already implemented AI in their HR processes.
By opting for comprehensive Performance Management Solution like Akrivia HCM, that can be easily integrated with learning management systems, HR teams can have a holistic view of employee performance and growth. Thus, by embracing AI in performance management, HR professionals in the UAE can ensure business growth in a constantly evolving labour market. In what other ways AI can help improve the HR tech? Let us know in the comment section!
