Should Companies Tell Employees When AI Is Used to Make Decisions?

Yes, companies should generally tell employees when AI plays a meaningful role in decisions that affect their work. That does not mean announcing every time an AI tool helps write an email or organize a calendar. It matters more when AI is used to screen candidates, evaluate performance, recommend promotions, assign work, or influence decisions that can affect someone's career.

The bigger issue is trust. Employees should know when a system is helping make a decision about them, particularly when they may have no way of seeing what information the system used or how much weight a manager gave its recommendation. The International Labour Organization has warned that AI systems used in human resources can rely on unclear goals, incomplete or biased data, and processes that are difficult to understand. Transparency does not solve every problem, but keeping employees in the dark certainly does not help.

The Big Points

The question is not whether a company needs to announce every minor use of AI. The better question is how much the technology can affect the person on the other side of the decision. A writing assistant and an AI system that helps determine who gets promoted are two very different situations.

• Tell employees when AI can meaningfully affect them. The bigger the decision, the more important clear disclosure becomes.
• Explain what the AI is doing. Saying “AI was used” is not enough if employees still have no idea what role it played.
• Keep people accountable. Managers should be able to question an AI recommendation rather than simply approve whatever the system produces.
• Give employees a way to ask questions. Transparency works better when people have a way to understand or challenge a decision.

This is becoming a bigger workplace issue as companies use algorithms to organize, monitor, supervise, and evaluate work. The ILO describes this practice as algorithmic management and notes that it can reduce direct interaction between workers and human managers.

Why Should Companies Tell Employees When AI Is Used?

Companies should disclose meaningful AI use because employees need to understand when technology is influencing decisions about them. The UK Information Commissioner's Office recommends that organizations be open about their use of AI-assisted decisions, explain why they use it, and make affected people aware of a specific AI-assisted decision before it is made. 

That makes the timing important. Finding out six months later that an algorithm helped determine your performance rating is very different from being told about the system before the review happens. The first approach can make employees feel like the process was hidden from them. The second gives them a chance to understand what is happening and raise questions while the decision is still being made.

When Should Employees Be Told About AI-Assisted Decisions?

Employees should generally be told when AI has a meaningful role in hiring, performance reviews, promotions, compensation, scheduling, or other decisions that can materially affect their employment. The closer the system gets to making or strongly influencing a decision about someone's career, the stronger the case for clear disclosure.

The ILO has pointed to AI's growing use in recruitment and workforce management while warning that technology can end up automating flawed processes rather than fixing them. In one example discussed by the organization, an algorithm used in online advertising resulted in job advertisements being shown disproportionately to men, even though the advertiser had not explicitly targeted men. That is why knowing that AI is involved matters. Employees and applicants need enough information to question a process when something does not look right.

What Should Companies Tell Employees About AI?

Companies do not need to hand employees a technical manual explaining how a model was trained. A useful explanation should tell people that AI is being used, what task it performs, what kind of information it considers when appropriate, and how the final decision is made.

The ICO recommends meaningful explanations rather than vague statements about “advanced technology.” Its guidance says organizations should be clear about when and why AI-assisted decisions are used and should provide explanations in a form people can understand. Employees do not need to understand every line of code. They need to understand what the system means for them.

Should a Human Still Make the Final Decision?

For important workplace decisions, companies should maintain meaningful human involvement rather than treating an AI recommendation as an automatic verdict. Human oversight gives managers an opportunity to question an output, look at information the system may have missed, and consider circumstances that do not fit neatly into a dataset.

This matters because AI systems are only as useful as the goals and information behind them. The ILO's research on AI in human resources points to problems that can arise when systems rely on poor data or objectives that do not properly reflect the decision they are being used to support. (ILO: AI in Human Resource Management) A manager who simply accepts an AI recommendation without questioning it is not really adding much human judgment to the process.

Does AI Transparency Mean Companies Have to Reveal Everything?

No. Transparency does not mean publishing the company's source code or explaining every technical detail behind an AI system. It means giving people enough information to understand the role the technology played and what that means for the decision being made.

The level of explanation can depend on the situation. A company using AI to organize meeting notes does not need the same disclosure process as a company using an algorithm to evaluate employees. The important part is matching the explanation to the impact of the decision.

What Does Good AI Transparency Look Like?

Good transparency is simple enough that an employee can understand it without needing an AI degree. A company could explain that an AI system helps screen applications, describe the role it plays, clarify that a person reviews the result, and provide a way for someone to ask questions about the process.

That is far more useful than hiding behind phrases like “data-driven decision-making” and “advanced workplace technology.” Employees do not need a TED Talk about machine learning. They need to know whether AI is involved, what it is doing, and who remains responsible for the decision.

FAQs

Are companies legally required to tell employees when AI is used?

The answer depends on the country, industry, type of AI system, and decision involved. Rules and guidance are developing in different jurisdictions, so companies should check the laws that apply to their workplace rather than assuming one standard applies everywhere. 

Should employees be told when AI helps evaluate their performance?

Yes, clear communication is appropriate when AI has a meaningful role in evaluating an employee. The more the result can affect someone's work or career, the more important it becomes to explain the system's role and give the employee a way to ask questions.

Does telling employees about AI make the decision fair?

No. Disclosure is only one part of responsible AI use. Companies also need to consider the quality of the data, the purpose of the system, how the output is reviewed, and whether employees have a way to challenge an incorrect result.