Demystifying AI terms

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Demystifying AI terms

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AI governance framework

The policies, roles, controls and processes that govern how AI is approved, deployed, monitored and reviewed within an organisation.


AI literacy

The level of understanding required to use AI responsibly, including awareness of its capabilities, limitations, risks and ethical implications.


Algorithm

A defined set of rules or instructions that an AI system applies to data to generate outputs, such as rankings, scores or recommendations.


Algorithmic management

The use of algorithms or AI systems to allocate work, set targets, monitor performance or evaluate workers.


Artificial Intelligence (AI)

Computer systems capable of performing tasks normally requiring human intelligence, such as learning, prediction and pattern recognition, when applied to workplace processes.


Auditability

The extent to which AI systems and their outputs can be reviewed, tested and evidenced through documentation, logging and audit trails.


Automated decision‑making

Decisions made entirely by automated means, without meaningful human involvement, that may have legal or similarly significant effects on individuals.


Bias (in AI)

Systematic disadvantage affecting individuals or groups caused by biased data, design choices or assumptions within an AI system, potentially resulting in discrimination.


Candidate screening tools

AI‑powered tools used to assess, rank or shortlist job applicants, often based on CV data, assessments or predictive scoring.


Chatbot

An AI system that responds in real time to human-generated text prompts, whether written or spoken, and simulates human language responses. Chatbots are often used in customer service applications.


Data Protection Impact Assessment (DPIA)

An assessment required where data processing is likely to present a high risk to individuals’ rights and freedoms.


Deepfakes

Convincing images, audio and videos created by digital manipulation, e.g. fake photos or videos, “face swaps” in photos or videos, audio imitating or recreating the voices of famous artists or persons.


Employee monitoring technology

AI‑enabled tools used to monitor behaviour, productivity, communications or working patterns, particularly in remote or hybrid settings.


Equality Impact Assessment (AI)

An assessment aimed at identifying and mitigating potential discriminatory effects of AI tools on protected groups within the workforce.


Explainability

The ability to understand and explain how an AI system produces a particular output or recommendation.


Foundation model

A type of AI system that is trained on multiple datasets (for example, text, images, video, speech, numbers) so that it can develop many complex capabilities.


Generative AI

A type of AI system which can be used to create new content that reflects the general characteristics of the training data without necessarily duplicating the training data, e.g. text generation using a large language model. Generative AI can create content which previously required human cognitive ability e.g. ChatGPT.


Hallucination

An output which seems to be believable but which is factually or grammatically incorrect or in which words are jumbled or don’t make sense.


Human oversight

Measures ensuring that humans can supervise, intervene in or override AI‑enabled decisions, particularly where employment outcomes are affected.


Large language model

An AI system with a neural network which can analyse massive volumes of unstructured data, enabling creation of sophisticated output.


Machine learning (ML)

A subset of AI where systems learn patterns from data and improve performance over time without explicit programming for each outcome.


Natural language processing

The AI system is trained on natural (i.e. human) language data and the outputs generated by the system mimic human language (whether spoken or written) e.g. a chatbot.


Permitted use policy

An internal policy setting out approved, restricted and prohibited uses of AI by employees and managers.


Training data

Data used to train an AI model, which may include CVs, performance metrics or historic employment decisions.


Workforce AI

AI tools used in employment‑related contexts, including recruitment, onboarding, performance management, workforce planning and employee relations.

Our teams of specialist lawyers around the world have significant experience supporting employers in navigating the legal, regulatory and practical implications of governing, implementing and using AI in the workplace.

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Our teams of specialist lawyers around the world have significant experience supporting employers in navigating the legal, regulatory and practical implications of governing, implementing and using AI in the workplace.

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© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.

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