From Monitoring to Meaningful Performance: A Systematic Review of AI-Enabled Performance Management, Employee Agency and Organizational Effectiveness.

Abstract Through algorithmic monitoring, people analytics, automated evaluation, predictive systems, and AI-assisted managerial decision-making, artificial intelligence (AI) is being increasingly integrated into performance management. While often associated with effectiveness, consistency, and evidence-based management, these impacts are nuanced, with implications for both employees and organizational efficacy. With a focus on fairness, transparency, explainability, trust, autonomy, wellbeing, human oversight, contextual sensitivity, and reasonable adjustment, this systematic literature review explores how AI-enabled performance management transforms organizational control, employee agency, and performance outcomes. The review provides an integrated control-agency-effectiveness viewpoint by drawing on literature on algorithmic management, organizational justice, the work demands–resources perspective, self-determination, and socio-technical systems theory. Its findings suggest that while AI can enhance managerial decision support, information availability, and consistency, it may also increase surveillance, datafication, and perceived loss of autonomy and worries about the validity of the process. One of the ways technology arrangements impact performance and wellbeing is by influencing employee agency. The paper argues that performance validity and measurement accuracy should be separated since an algorithm can process data correctly yet assessing an inaccurate or contextually unsuitable depiction of human contribution. In this light, it is argued that human oversight, employee voice, contestability, contextual sensitivity, and reasonable modification are critical boundary criteria. The paper concludes with ten research propositions and an integrative framework that positions AI-enabled performance management as a socio-technical people-performance system, rather than purely a technical tool, to manage. Keywords Artificial intelligence; AI-enabled performance management; algorithmic management; algorithmic monitoring; employee agency; organizational justice; transparency; trust; employee wellbeing; organizational effectiveness