AI is rapidly becoming a reality — and is already shaping the design of work, how decisions are made, and how value is generated throughout an organization.
However, many organizations are developing technological agendas faster than they are developing people-related agendas — and this presents CHROs with a significant gap to fill between their organization’s desire to leverage AI and their organization’s ability to do so. The organizations that will thrive in the next ten years will not only utilize more AI than other organizations. They will be the ones that develop a people strategy that establishes expectations for employees’ behaviors, provides a level playing field for implementing AI across organizational departments, evolves performance management practices, and invests substantially in employee learning and development so that AI can become an organizational capability rather than isolated experiments.
Why CHROs Need to Take Leadership Roles
AI implementations are typically viewed as a technology-driven project initiated by IT, Digital, or Operations. However, in actuality, AI implementations affect all aspects of the employee experience including: employees’ roles and responsibilities; managers’ judgments and decision-making abilities; collaborative work practices among employees; accountability levels among employees; skill requirements among employees; and employee trust within organizations — all of which fall directly under the purview of CHROs.
As such, CHROs must transition from simply receiving direction from IT regarding the implementation of AI strategies to actively contributing to the creation of these strategies.
The primary question is no longer whether organizations will implement AI-based technologies; rather, the question is whether organizations have established clear guidelines regarding how employees are expected to utilize AI-based technologies; how employees’ performance will be assessed in an AI-assisted workplace; and whether organizations are providing equal opportunities for employees across all divisions to gain access to and build capabilities related to AI-based technologies.
Equity Across Divisions
One of the greatest challenges associated with successful implementation of AI-based technologies is inconsistent adoption. Some departments receive greater emphasis on receiving technology resources; earlier pilot programs for testing out technology; and greater levels of financial investment in technology than other departments. Conversely, other departments may experience difficulty accessing technology; limited support for utilizing technology; and/or uncertainty regarding the applicability of technology to their specific area of responsibility. When this occurs, organizations do not achieve true transformation; instead, they experience fragmentation.
From CHROs’ perspective, achieving equity across divisions does not necessarily mean that each division must engage in the same type of AI-based activities. Equity across divisions simply means that each division should have access to:
- AI-basedAI-based technologies relevant to their area of responsibility.
- Clearly defined behavioral expectations for appropriate utilization of AI-based technologies.
- Equal quality of enablement, training, and managerial support for utilizing AI-based technologies.
- Consistent standards for accountability and oversight relative to utilizing AI-based technologies.
If CHROs do not implement discipline in achieving equity across divisions, AI-based technologies will quickly evolve into a source of internal inequality.
Leaders who are able to accelerate their organization’s development using AI-based technologies will emerge as winners while leaders who are unable to do so will fall behind. Performance disparities will begin to reflect inequities in access to AI-based technologies rather than superior leadership skills or talent.
Expected Behavior Must Be Explicit
If AI is fundamentally altering how work is performed within organizations, then organizations must establish new definitions of “good performance.” Good performance begins with establishing explicit behavioral expectations for employees.
CHROs must establish explicit AI-era expectations within leadership frameworks; role profiles; and performance appraisal discussions with employees.
Examples of explicit AI-era expectations include:
- Curiosity and continuous learning as opposed to passive waiting.
- Responsible experimentation within established boundaries.
- Transparency when AI-based technologies are used to generate work products or inform decision-making processes.
- Human accountability for judgment; decisions; and outcomes.
- Sharing of best practices across organizational units as opposed to hoarding of knowledge.
- Awareness of potential biases; ethical considerations; and unintended consequences.
This represents the new performance contract. Employees should not be left wondering whether their employer desires them to utilize AI-based technologies; accepts them utilizing AI-based technologies; or views their utilization of AI-based technologies as potentially harmful. Mature organizations make their expectations visible and measurable.
Performance Management Must Evolve
Prior performance management systems were developed based on the assumption that there existed a relatively predictable relationship between effort; time spent; and output generated by employees.
AI-based technologies fundamentally alter this relationship. An employee possessing high levels of fluency with AI-based technologies can generate higher quality work products more quickly; assimilate information more efficiently; and enhance team productivity in ways that prior performance models could not accurately measure.
Consequently, CHROs must expand performance management in three ways:
- Measure not only employee output but also employee capability. Prior performance models focused exclusively on what employees produced. Organizations now must also evaluate employees’ abilities to effectively utilize new tools; make informed judgments; improve decision-making processes; and adapt to evolving work requirements.
- Reward multiplier behaviors. Employees who elevate others — i.e., employees who document better workflows; employees who share prompts and methodologies with coworkers; employees who assist coworkers in building confidence utilizing new technologies; and employees who assist coworkers in adopting new technologies — are typically among the most valuable employees in an AI-enabled workplace.
- Differentiate clearly between inability; reluctance; and noncompliance. If an employee refuses to utilize AI-based technologies — particularly where utilization of AI-based technologies has become common practice — the reason(s) why may be due to a lack of skills necessary to utilize AI-based technologies; a lack of confidence utilizing AI-based technologies; inadequate support from their manager for utilizing AI-based technologies; or active opposition to utilizing AI-based technologies. Each scenario requires a different response from leadership.
A well-designed people strategy enables organizations to avoid confusing developmental needs with performance failures.
Learning and Development Is Key
Learning and development (L&D) is fundamental to developing an effective AI-based people strategy. Developing AI-based technologies without simultaneously developing employee skills creates inconsistency; anxiety; and disparate performance results among employees.
CHROs must consider AI-based L&D in three layers:
Foundational Literacy for All Employees: A practical baseline for all employees concerning what AI-based technologies are; what they are not; where they are being utilized within the organization; and what responsible utilization entails.
Role-Based Capability Building for Employees in Various Divisions/Functional Areas: Tailored learning experiences for employees in various divisions/functional areas so that they understand how AI-based technologies will impact their day-to-day responsibilities in finance; human resources; operations; sales; legal; marketing; etc.
Advanced Development for Internal Champions: Intensive training experiences for leaders and high-potential employees who will serve as models for appropriate utilization of AI-based technologies; support their peers in utilizing AI-based technologies; and facilitate accelerated adoption of AI-based technologies within their respective divisions/functional areas.
Equally important as curriculum content is delivery.
AI-based L&D should not occur annually as part of a compliance module. AI-based L&D should be integrated into employees’ daily routines through discussions with managers; peer-to-peer learning opportunities; real-world examples/applications; internal communities dedicated to promoting knowledge-sharing related to AI-based technologies; and frequent updates regarding advancements in AI-based technologies/regulatory requirements related to AI-based technologies.
The German and European Context
The German and European regulatory context adds urgency to CHROs’ responsibilities in this area. The European Union’s proposed AI Act utilizes a risk-based approach; prohibits certain applications of AI-based technologies; and designates certain employment-related AI-based systems as “high-risk.” Specifically, the European Commission identifies AI-based technologies used for employment purposes (i.e., recruitment, promotion, termination, assignment of tasks, evaluation of performance) as potentially high-risk use cases for employers . The German and European regulatory frameworks have direct implications for HR and people management functions. Specifically, the proposed EU rules would prohibit certain practices — such as emotion recognition in workplaces — and employers utilizing high-risk AI-based systems would be subject to additional requirements related to risk management; data quality; documentation; human oversight; monitoring; and accountability.
Additionally, the European Commission has indicated that AI literacy obligations came into effect on February 2, 2025 — meaning that organizations must implement more than technical controls; they must also develop a workforce that understands how AI-based technologies are being utilized within their organizations and what constitutes responsible utilization of those technologies [EEI Institute].
For German employers, this goes beyond mere legal compliance in the narrowest sense. German workplace culture and co-determination norms emphasize transparency; fairness; consultation; and explainability. Therefore, CHROs must anticipate scrutiny from not only regulators but also from works councils; employees; and leadership stakeholders [LinkedIn]. The practical implication is clear: AI-based technologies cannot be implemented as a black box efficiency tool within people-related processes.
Strategic Role of the CHRO
This is why AI must occupy a prominent position on CHROs’ agendas as a core enterprise issue rather than a peripheral HR initiative. The challenge is much larger than training employees on new tools. It is about defining expected employee behavior; embedding fairness and accountability into performance systems; redesigning performance systems; and ensuring that every division has equal access to participate in AI-enabled work.
CHROs who are most successful will assist their organizations in establishing a culture where AI is neither feared nor idealized. Rather, AI is managed responsibly; utilized responsibly; learned responsibly; and aligned with business objectives.
In such an environment, people strategy emerges as the vehicle through which scattered experiments in utilizing AI-based technologies transform into sustainable enterprise performance.
About WiseForce Advisors
WFA is pioneering a new standard in peer-to-peer strategic transition advisory for senior executives through bridging the gap between lived executive experience and discreet strategic guidance. The firm’s unique approach is powered by a collective of former C-suite executives who have navigated these complex transitions themselves. WFA is the partner of choice for leaders strategically shaping their next chapter. www.wiseforceadvisors.com
