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The Role of AI in Employee Ethical Decision-Making, Performance, and Well-Being
Working paper   Open access

The Role of AI in Employee Ethical Decision-Making, Performance, and Well-Being

Yiduo Shao, Yixuan Li, Junqi Shi, Yanran Fang and Xiao-Yun Xie
SSRN
01/27/2025
DOI: 10.2139/ssrn.5040435
url
https://doi.org/10.2139/ssrn.5040435View
Open Access

Abstract

The adoption of artificial intelligence (AI) in workplace processes has fundamentally changed the way organizations monitor, manage, and evaluate employee behavior. In dynamic and high-pressure environments such as sales, where interactions are fast-paced and outcomes often hinge on interpersonal trust, AI tools are increasingly being used to ensure compliance with ethical standards. These systems serve as a mechanism to both evaluate and provide feedback on employee behaviors, aiming to align individual practices with organizational values. While the practical benefits of AI in those contexts are evident—streamlining oversight, identifying patterns of unethical conduct, and enabling data-driven leadership—its broader implications on the workforce remain less clear. Particularly underexplored are the ways employees perceive feedback informed by AI, the emotional and cognitive effects of being monitored, and the interplay between these factors and employee performance. The introduction of AI-based feedback introduces a nuanced tension: while such systems can foster greater ethical awareness and accountability, they may also inadvertently generate psychological challenges, such as feelings of surveillance or constraints on self-expression. The current study examines how leaders utilize AI-generated feedback and explores its impact on employees’ ethical behavior, performance, and overall well-being. By focusing on these dynamics, the research contributes to a deeper understanding of how AI-mediated leadership practices influence workplace behavior and employee outcomes.

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