Interview: How AI Makes Performance Management Strategic
For HRMorgen, the editorial team spoke with Niels Datema, CEO of Nela, about the impact of AI on performance management. How does AI make talent development more personal, effective, and strategic? And why is this the perfect moment for HR to strengthen its strategic relevance?
According to Niels, the opportunity is significant:
“Effective performance management contributes to retaining employees, but also to increasing customer value.”
Why performance management is now a strategic priority
Niels emphasizes that performance management is not just an HR process — it is a powerful lever for both organizational and customer outcomes:
“HR can show the business that talent development not only helps professionals grow but also increases customer value. That’s direct economic impact.”
Research from McKinsey shows that organizations with a mature performance management approach are four times more successful than those without one — a striking figure, especially in knowledge-driven companies where people are the most valuable asset.
The limits of classical performance cycles
Many organizations still rely on traditional cycles: annual reviews, forms, and fixed feedback moments. According to Niels, this approach falls short:
“Feedback is often requested just before a performance review. At that point, you’ve missed the opportunity to truly help someone grow.”
Because feedback arrives too late and lacks context, employees experience it as a formality rather than a tool for development.
How AI is transforming performance management
AI can fundamentally improve the traditional process. It makes performance management more continuous, contextual, personal, and strategic. In the conversation, Niels outlines five ways in which AI adds value:
1. Feedback at the right moments
Instead of a few fixed moments per year, AI gathers feedback exactly when it matters most:
- after a project,
- after a client presentation,
- after a collaboration,
- or when someone proactively asks for input.
This makes feedback more timely, concrete, and actionable.
2. From feedback to development
AI helps translate incoming feedback directly into development goals, actions, and insights. As a result, feedback doesn’t end up forgotten in a system — it becomes the starting point for growth.
3. Personalized development paths
AI incorporates a professional’s ambitions, values, and career goals. Development plans become more relevant and better aligned with what someone truly wants to achieve.
4. Human-centered interaction
AI makes it easier to give and receive feedback. Think of:
- spoken feedback via voice input,
- automatically refined feedback suggestions,
- reduced administrative burden.
This lowers the threshold for feedback givers and provides richer, more balanced insights for professionals.
5. Strategic insights for HR and leadership
By combining anonymized data, AI uncovers insights such as:
- skill gaps,
- attrition risks,
- team trends,
- developments in customer satisfaction.
Niels explains:
“It shows how the development of employees contributes to the organization’s core: the value delivered to customers.”
About Nela
Nela is an AI assistant for performance management, designed to continuously and proactively collect feedback, analyze trends, and automatically translate insights into development goals. This shifts performance management from an administrative process to a tool for talent development and customer value.