Meaning ● Algorithmic Compensation Bias, in the context of SMB growth, automation, and implementation, refers to systematic and unfair discrepancies in compensation decisions resulting from biased algorithms used in performance evaluations or salary determination. This can manifest within SMBs when automated systems, designed to streamline HR processes, inadvertently perpetuate existing inequities or create new ones due to flawed data inputs or biased algorithm design. Such biases can affect employee morale, increase turnover, and expose the SMB to legal risks related to discrimination. A key business consideration is the ethical implementation of AI-driven tools, requiring careful validation and monitoring to ensure equitable outcomes.
