The Algorithm Knows Best? AI, Bias, and the Ethics of Automated People Decisions
Employees say the company's AI hiring system is rigged. The data says it's efficient. Both might be right. What do you do when the machine is the problem?
Duration
75 min
Difficulty
Intermediate
Stakeholders
5
Company Size
Medium (100-500)
Organizational Background
Nexlyr Technologies is a mid-sized HR tech company that developed and uses its own AI-driven platform - PerformAI - to make hiring, promotion, and performance rating decisions. The system was trained on five years of internal data and is now licensed to 40+ client organizations. Six months ago, an internal employee (a Black software engineer) filed a complaint alleging that PerformAI systematically rates employees of color lower on 'culture fit' and 'leadership potential' metrics. An external audit was quietly commissioned. You have been brought in as an I-O psychologist and OD consultant to conduct the audit, brief leadership, and recommend a path forward. Leadership is nervous - PerformAI represents 30% of company revenue. The legal team wants to minimize exposure. The HR team is in denial. And the employees who raised concerns are watching.
Key Stakeholders
Learning Objectives
- Apply SIOP and APA ethical principles to AI-driven HR decisions
- Identify adverse impact using the 4/5ths rule and disparate impact analysis
- Evaluate psychometric validity and fairness in algorithmic assessment tools
- Navigate competing stakeholder interests in an ethically charged consulting engagement
- Recommend evidence-based, ethical interventions for biased systems
- Apply anti-oppressive OD frameworks to technology-mediated discrimination
Sign Up to Access This Scenario
Create a free account and get one free simulation to try PsychSim.
Host a Team Session
Click Host Team Simulation to create a session and receive a 6-character join code. Share the code with your teammates so they can join via Join Existing Session. At the end, a structured group debrief guide is generated for the team.
Instructor Monitoring
Instructors and admins have access to the Instructor Monitor in the sidebar. From there, you can view all live sessions, see the full conversation feed, send real-time notes to students, advance phases, and end sessions. To enable instructor access, an admin must set your account role to "instructor" in the User management section of the platform dashboard.