Dignity and use of algorithm in performance evaluation

Algorithms are increasingly used by human resource departments to evaluate employee performance. While the algorithms are perceived to be objective and neutral by removing human biases, they are often perceived to be less fair than human managers. This research proposes dignity as an important construct in explaining the discrepancy in perceived fairness and investigates remedial steps for improving dignity and fairness for algorithm-based employee evaluations. Three experiments’ results show that those evaluated by algorithms perceive lower levels of dignity, leading them to believe the process is less fair. In addition, we find that providing justifications for algorithm usage in employee evaluations improves perceived dignity. However, human-algorithm collaboration does not enhance perceived dignity.