AI Now Deciding Raises, Promotions, and Layoffs While Managers Skip Training

How AI is Changing Managerial Decisions on Raises, Promotions, and Layoffs

Artificial intelligence is no longer just a tool for streamlining workflows—it’s increasingly influencing critical management decisions. A recent survey of 1,342 U.S. managers found that 60% use AI tools to guide choices about their direct reports. These decisions include raises, promotions, and even layoffs, highlighting AI’s growing role in personnel management.

AI’s Role in High-Stakes Employment Decisions

While AI can offer useful data-driven insights, most managers using these tools haven’t received formal training on how to integrate AI into people management effectively. The survey revealed that ChatGPT is the preferred AI assistant for 53% of these managers, with Microsoft’s Copilot and Google’s Gemini also popular choices.

However, relying on AI for sensitive decisions raises concerns. AI lacks empathy and contextual understanding, which are vital when managing human talent. It also reflects the biases and limitations of the data it processes, which can lead to unfair outcomes.

Human Oversight Remains Essential

Experts warn against letting AI replace human judgment in management. Stacie Haller, a career advisor, emphasizes that the “people” in people management should never be lost. This caution is echoed by lawmakers who have introduced legislation to regulate AI’s role in employment decisions. For example, California’s proposed “No Robo Bosses Act” aims to ensure AI does not make hiring, firing, or promotion decisions without human review.

Impact on Entry-Level Jobs and Hiring Practices

Generative AI tools like ChatGPT and Google Gemini have emerged quickly, changing how companies hire and promote employees. Entry-level roles for recent college graduates are particularly affected, as AI can automate many tasks previously done by humans. This shift contributes to a tougher job market and a surge in AI-generated resumes.

LinkedIn reports a 45% increase in applications over the past year, with an average of 11,000 submissions per minute. This volume makes it harder for managers to sift through resumes manually, which may explain the growing reliance on AI tools for initial screening and evaluation.

Balancing AI Assistance with Managerial Judgment

Despite AI’s increasing role, there’s a clear difference between using it to organize performance data and entrusting it with final decisions about employees’ futures. Managers should view AI as a support tool—not a decision-maker.

For managers looking to understand AI’s capabilities and limitations better, exploring targeted AI training can be valuable. Resources like Complete AI Training offer courses that help leaders use AI responsibly and effectively in their roles.

• Use AI to gather and organize relevant employee data.
• Apply human judgment to interpret AI insights with empathy.
• Stay informed about legal regulations regarding AI in employment.
• Seek training to improve AI literacy and management skills.

AI tools can improve efficiency, but successful people management requires balancing data with human understanding. Managers who embrace this balance will be better equipped to lead teams fairly and effectively.