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At Tailor Brands, a platform that helps entrepreneurs launch and manage their businesses, managers hold weekly meetings with customer support employees to evaluate their performance, as well as more in-depth annual reviews.
Part of that evaluation involves examining the records of how these employees interact with customers, which the company refers to as “tickets,” said cofounder and chief design officer Tom Lahat.
Previously, managers manually reviewed a portion of the dozens of tickets created each week to provide feedback, which was a time-consuming process.
The company now uses artificial intelligence to analyze every ticket every day and score employees’ customer support interactions, Lahat said.
“The review itself is basically that the AI is giving us a summary of the actions,” he added, so managers provide accurate feedback quickly.
Companies such as JPMorganChase and SAP are increasingly using AI in employee evaluations, whether it’s to analyze data or develop employee improvement plans.
As a result, AI may play a role in promotions, pay raises and other important employee decisions. Human resources experts say this has implications for both employees and employers.
How Companies Use AI in Performance Reviews
In a 2025 survey of more than 1,300 managers by Resume Builder, 94% said they use AI to create employee development plans, 91% use it to assess performance and 88% use it to write performance improvement plans.
A majority of managers also said they use AI to decide pay raises, promotions, layoffs and terminations. And 71% said they were confident in AI’s ability to make “fair and unbiased decisions about employees.”
“AI has permeated throughout the whole process of performance evaluations at this point,” said Tiffany Keller Hansbrough, an associate professor of leadership and organizational behavior at Binghamton University.
Companies also use AI to draft questions for employee reviews, analyze performance data and write feedback, Hansbrough added.
However, “This is still very new, and people are still developing ways to use it,” she said.
The Implications of AI in Performance Reviews
“As with any decision aid that’s used in a complex decision or judgment, there’s going to be scrutiny,” said Ashley Sauciuc, an assistant professor of accounting at Indiana University.
When AI is used for performance reviews, companies should scrutinize the “accuracy, precision and reliability of the tool,” Sauciuc added. They also need safeguards and processes so data used to train an AI tool is unbiased and properly weighted to align with an organization’s performance goals and metrics.
Bias is an ongoing concern for AI's use in HR functions. The U.S. Equal Employment Opportunity Commission has said that any software, including AI, used to make hiring or other employment decisions must adhere to federal civil rights laws.
Companies must develop clear policies on how AI is used to evaluate employees and communicate that to them, Hansbrough said. Reviews must also remain confidential, especially if they’ll be uploaded to an AI tool.
One benefit of using AI to evaluate employees is that it could “level the playing field,” according to a study published in SSRN and co-authored by Sauciuc. The research found that after negative performance evaluations, employees from underrepresented minority groups put in more effort at work when their employer used AI for evaluations instead of traditional human managers, while the opposite was true for white males.
“Overall, we find that people generally see AI as less biased and more objective, which can actually make a firm more attractive to some prospective employees and help improve their responses to negative feedback,” Sauciuc said.
Employees also have positive views around the use of AI in pay decisions. In a 2026 Resume Now survey, 67% of employees said they’re more likely to accept a job when the company uses AI in pay decisions. Most were also comfortable with AI making pay-based decisions, as long as it guaranteed “competitive, market-based pay.”
Tips for Using AI in Employee Reviews
Two factors companies should consider when using AI in performance reviews are:
1. Develop a Standardized Process
This should be the case for any performance review, whether it’s AI- or human-based, Hansbrough said. All reviews should include the same criteria and questions for every employee in the same role.
“That process needs to ensure that the evaluations are free from bias, and they’re properly aligning employees’ incentives with the goals of the organization,” Sauciuc added. “That’s really key.”
Companies should offer assurances that they’ve made an effort to keep the process as unbiased as possible, she added.
Organizations must also be transparent, and communicate with employees, about how they’re using AI to evaluate performance, including which tool will be used and how it will be applied, as well as the human managers’ roles, Hansbrough said.
2. Keep Human Managers Involved
AI is useful for analyzing and compiling data for performance reviews, and potentially suggesting ideas for employee development, Hansbrough said.
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But human managers should evaluate everything, including checking the technology’s analysis and interpretation of the data, she said. They should also be the ones writing employee feedback.
“I don't think AI should be used to write comments about a person's performance,” Hansbrough said. “Not only does this raise fairness concerns, AI didn't see the performance.”
However, AI could edit employee feedback to improve the tone, she said.
At Tailor Brands, managers review the AI analysis of customer support interactions and provide feedback to employees, Lahat said. Managers typically review an employee’s highest- and lowest-scoring tickets to understand employee behavior in different situations.
“I want to know that my managers did review it and gave actual feedback,” Lahat said.
Ultimately, it’s important for humans to remain involved in evaluating employees and making important decisions, such as promotions, pay raises and educational opportunities, Sauciuc said.
“AI can be a great tool,” Sauciuc said. “But ultimately, that's what it is. It's a tool, and one that has to be used with care and discretion. So, I don't think that we can ever assume that humans should be removed from the process entirely.”
Editor's Note: What else should HR leaders consider around AI's use in workflows?
- How Managers Weigh Employee AI Use in Performance Reviews — AI is reshaping performance reviews — but measuring usage alone isn't enough. Experts say the real measure is judgment, not frequency.
- Start With the System, Not With the Task: A Lean Framework for HR AI Implementation — When you automate drudgery, you optimize the past. Start with purpose and system design to create space for reinvention.
- Why AI Hiring Discrimination Lawsuits Are About to Explode — AI is reshaping hiring — and the courtroom. Job seekers are suing over biased screening tools, and experts say a wave of lawsuits is just beginning.