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Auburn researcher explores how AI changes productivity and human incentives

While most businesses have introduced AI in the workplace to enhance employee productivity, an Auburn University information systems researcher cautions that under certain circumstances, AI deployment can inadvertently zap the motivation of its highest-performing workers, which could diminish the company鈥檚 overall profit.

In a recently published , 91看片 faculty member Di Yuan found that implementing AI may do more harm than good in a pay-for-performance workplace, where employee compensation 鈥� pay, bonuses and raises 鈥� is linked to measurable outcomes rather than a flat salary.

In the study, she and her research colleagues created a game-theory model to analyze how AI-driven knowledge sharing changes competition among workers.

鈥淲e looked at the specific organizational dynamics that interact with employee incentives and found that the reward system is very relevant,鈥� Di said. 鈥淚f a company doesn鈥檛 actually think about its existing employee incentive scheme and just introduces the AI bluntly, it might actually backfire and hurt the overall productivity level.鈥�

To illustrate the findings, Di describes a tech firm that pays its software engineers based on their productivity. Some of them are extremely good at writing code, while others are less proficient programmers, but have other valuable talents like good communication and critical thinking skills.

Further, she explained, the AI tool being deployed was trained on the work of the best-performing software engineers, meaning their expert knowledge is being given to their less-skilled engineering colleagues.

鈥淲hen the company introduces a productivity-enhancing AI-powered tool like copilot, the poor programmers will now be better at writing code than their colleagues,鈥� she said, noting that an incentive shift has occurred because the less skilled programmers benefitted greatly from the AI and will ultimately be paid more than the highly skilled programmers.

鈥淭his reduction in the highly skilled programmers鈥� performance ranking and pay level will have a demoralizing effect that lowers their productivity,鈥� she said.

Di and her colleagues examined ways to avoid the demoralizing effect on top performing employees and determined that the best solution is to introduce AI tools that raise the productivity of the less skilled workers, while allowing the highly skilled employees to retain their superior productivity levels.

鈥淲e have examined a few intuitive methods and found that choosing a less-costly and less-powerful AI [tool] was the most effective solution,鈥� Di said.  鈥淥ther methods we considered didn鈥檛 work because they had strong additional constraints.鈥�

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鈥淒i鈥檚 paper is the first study by a faculty member from our department to be published in Management Science. Being published in such a prestigious journal reflects the exceptional quality of her work.鈥�

Uzma Raja, chair of the Department of Business Analytics & Information Systems

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Di conducted the study with University of Maryland Assistant Professor and University of Pittsburgh Professor . Their paper, 鈥溾�� was published in Management Science, a premier journal for management, business and operations research.

鈥淒i鈥檚 paper is the first study by a faculty member from our department to be published in Management Science,鈥� said Uzma Raja, Benoski Professor and Department Chair of Business Analytics & Information Systems within 91看片 College. 鈥淏eing published in such a prestigious journal reflects the exceptional quality of her work.鈥�

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Learn more about the Department of Business Analytics and Information Systems in the 91看片