HR’s Strategic Role in Shaping Ethical AI Use Across Departments

With the introduction of artificial intelligence (AI) into the workplace, its applications extend far beyond IT departments. AI tools are being leveraged for recruitment, appraisal of business performance, finance, and even customer care, bringing efficiency to departmental work and decision-making. However, attention to concerns about equity, transparency, and accountability has only become more highlighted with the increased rate of adoption. This article will discuss how HR leaders may cultivate ethical AI practices to enhance fairness, compliance, and trust within the organization.

Why Ethical AI Needs HR Leadership?

AI systems are only as ethical as the people who design them and the data they are trained on. Faulty algorithms can be unfair in hiring decisions, appraisal determinations, or other processes that could otherwise present significant legal risks. While the technologists build these tools, it is in the domain of HR to inquire: Is this fair? Is it inclusive? Does this align with our values? 

Here is what makes it imperative for HR to take the lead on ethical AI:

1. People Impact: AI tools impact hiring, appraisals, promotions, and layoffs, which form core human-related activities. Therefore, the HR Committee is the first line of defense in identifying ethical concerns.

2. Cross-Departmental Coordination: HR professionals collaborate with all departments across the organization. This enables them to lead discussions on AI use, especially when it influences human decision-making.

3. Workplace Policy and Culture: HR authorizes codes of conduct and ethics policies. These will provide the framework under which AI is used and will be monitored for compliance in the workplace.

4. Legal and Regulatory Awareness: As laws regarding data protection and responsible AI continue to evolve, HR must ensure that internal practices keep pace with these evolving requirements.

Key Areas Where HR Must Lead Ethical AI Efforts

While AI can be a support area for almost every HR function, it also brings new, unpleasant nuances and ethical issues. Most of the time, ethical issues are very subtle and need to be caught by HR as early as possible. Some of the areas in which HR has an opportunity to ensure ethical use of AI are:

1. Ethical Recruitment and Talent Management

Today, AI tools are being used to screen CVs, analyze candidate behavior, and predict job performance. If the algorithms, however, work on biased or unrepresentative data, they might error and wrongfully discriminate on grounds of gender, age, caste, or even educational background.

What HR Professionals Should Do:

• Conduct regular audits on algorithms used for hiring to identify and act upon any unforeseen hidden bias swiftly.

• Ensure the datasets used in AI tools for hiring represent a broad spectrum of candidate profiles.

• Ensure that vendors disclose how the AI tools make decisions.

2. Fair Performance Reviews and Promotions

Performance management systems are gaining popularity in organizations, particularly in the IT, banking, and retail sectors. The new systems monitor employee productivity, client interaction, or even keystrokes. The problem with relying solely on data is that the human context often gets lost.

The Indian Parliament passed the Digital Personal Data Protection Act 2023. It is now under implementation. The Act requires organizations to disclose to individuals the purpose for the collection, use, or sharing of such digital personal data. Notices must be clear, consent must be informed, and employees must be made aware of their rights regarding data in a manner that is as simple and accessible as possible.

What HR Professionals Should Do:

• Use AI performance tools as support, not substitutes, for human judgment.

• Train managers to interpret AI-generated reports in conjunction with behavioural cues and qualitative feedback.

• Include employee feedback when assessing the fairness of AI-driven evaluations.

3. Ensuring Transparency and Informed Consent

Many workers worry about how much AI is used in their jobs. They wonder if it monitors their emails, tracks productivity, or evaluates their performance. Without clear communication, this can lead to fear, resistance, or concerns about constant surveillance.

What HR Professionals Should Do:

• Be completely transparent about the various situations in which these AI tools are used.

• Set employee-centric regulations that dashboard their rights on behalf of any AI decision.

• Consent clauses and the execution of agreements for AI monitoring should be incorporated into employee agreements.

4. Promoting AI Literacy Across Teams

Ethical AI cannot be kept solely under the responsibility of HR or IT. A good business leader should know what it means to incorporate AI into everyday business operations, as should team managers and front-line workers.

According to NASSCOM, the AI-driven HR market has been forecast to grow from $11.63 billion in 2024 to $26.26 billion in 2030, at a compound annual growth rate (CAGR) of 17.1%

What HR Should Do:

• Develop training for AI literacy for all employees.

• Learning and Development can involve AI ethics training in onboarding and leadership development.

• Utilize good influence to encourage departments to appoint AI ethics champions who, in turn, identify risks in their processes daily.

The Strategic Role of HR in Policy and Governance

HR, therefore, has a role in the AI governance strategy besides just training and internal oversight by setting the tone for AI governance throughout the organization. Some of the key strategies include the following:

1. Drafting Ethical AI Policies:
   

   • HR should assist in drafting policies that specify acceptable and unacceptable uses of AI.

   • They should address issues related to data collection, algorithm treatment, employee rights, and redressal procedures.
     

2. Setting Up AI Ethics Committees:

• Artificial intelligence tools influence crucial decisions, such as employment and performance appraisals. For fairness and accountability, organizations must set up cross-functional ethics committees.

• Such groups carry out due diligence relevant to large AI systems before deployment. HR must co-lead with legal, compliance, and IT to safeguard people-related metrics and move toward responsible AI use.

3. Incorporating AI Ethics into Company Values:

• Just as a company embraces values like diversity, sustainability, or customer focus, these are considered intentional choices. In the same way, AI should be treated as a core responsibility embedded within the company’s values.

• This, in particular, will facilitate a culture where the local decision-making processes incorporate considerations of fairness and accountability. 

Building an Ethically Responsible AI Culture: HR's Next Steps

The workplace is evolving in light of AI's surge, but it should never offer grounds for unfairness, exclusion, or opacity. HRs have the chance and duty to ensure that AI implementation in their organizations is seeded with ethical values from day one.

Here’s how HR leaders can start shaping a responsible AI culture:

• Conduct an in-depth audit of all AI tools used by various departments; use these findings to map out their consequences on people issues.

• Establish appropriate governance structures, data-handling protocols, transparency policies, and review mechanisms to hold organizations accountable.

• Organize sessions among employees to gather input. Emphasize worker participation by engaging them in discussions about their concerns, suggestions, and features that affect AI in their work.

• Collaborate with IT, legal, and compliance teams. Ethical AI cannot be confined to a silo; it must be integrated as an organizational approach.

HR can promote the use of AI in accordance with organizational beliefs and employee trust, which entails promoting transparency, fairness, and accountability. When used with human-centered values, AI implementation at the departmental level may facilitate innovation without losing integrity. HR is not only in the discussion but also leading it.