MIT Sloan Management Review Article on How Robots Can Enhance Performance Management for Humans

We are in the middle of a robot revolution. The past decade has seen dramatic growth in robot adoption across an increasing number of industries, and it shows no signs of slowing. In a recent McKinsey survey of companies worldwide, 88% of respondents said they plan to invest in robotics for their business. Our research has found an equally and perhaps more important transformation taking place: The adoption of robots is improving companies’ ability to recognize and reward good employee performance.

Within every organization, leaders face a fundamental question: How do we get the best from our people? One of the most common methods is offering monetary rewards — usually, periodic bonuses — that are linked to performance. This practice is grounded in the idea that better performance should be more highly rewarded. But that approach is rarely simple to implement in practice because it requires that performance be measured well enough to be evaluated effectively. This is challenging to accomplish for most roles and even more so for individual employees. Because so much work is done in teams and managers can’t monitor the specific activity of each employee or accurately measure individual performance, many organizations choose to pay bonuses based on team or company performance rather than on individual performance.

About the Author

Bryan Hong is associate professor of entrepreneurship and management at the Bloch School of Management at the University of Missouri-Kansas City. Lynn Wu is associate professor of operations, information, and decisions at the Wharton School at the University of Pennsylvania.

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