What Is Recency Bias? | Definition | Examples | Impact

What is Recency Bias?

Recency Bias Examples

The following are some of the recency bias examples in the workplace:

Daniel has been a consistent contributor to the sales team of XYZ organization. In the last year, he has closed great deals with some major clients. But since January 2023, he hasn’t delivered well, and his overall quarterly revenue growth is 70% less than the team’s average. During the performance appraisal process, Daniel’s manager, Sean, overlooked all of his achievements and focused only on the last three months when Daniel’s performance was not as per the company’s expected standards.

Due to this recency effect, Daniel did not get an appraisal, even though his annual average revenue growth was much higher. This led Daniel to face disengagement, decreased productivity, and dissatisfaction with his job.

From the discussed recency bias example, it is quite clear that it can severely impact organizational productivity, engagement, and growth prospects.

Why does Recency Bias Occur in Workplaces?

Recency bias occurs in workplaces due to several psychological and cognitive factors:

1. Memory and Attention: Humans tend to give more weight to recent events because they are more easily remembered and still in our immediate attention. The human brain may prioritize recent information over older experiences when making judgments.
2. Availability Heuristic: People often rely on information that is readily available to them when making decisions. Recent events or experiences are more accessible in memory, leading individuals to place greater importance on them when assessing situations.
3. Impacts of Emotion: Recent events or experiences may evoke stronger emotions, which can influence decision-making. Emotionally charged events are more likely to be remembered and given undue weight when evaluating an individual’s performance or behavior.
4. Short-Term Memory Bias: The human brain tends to prioritize information stored in short-term memory. Events or information that occurred recently are more likely to be at the forefront of individuals’ minds, influencing their judgments and perceptions.
5. Cognitive Load: In busy work environments, individuals may be overwhelmed with information and tasks. This cognitive load can make it challenging to consider a person’s performance over an extended period, leading to a reliance on recent information for convenience.
6. Recency’s Perceived Relevance: People often assume that recent events are more indicative of a person’s current capabilities or behavior. This assumption may lead to the belief that the most recent information is more relevant in evaluating performance.

To mitigate recency bias in workplaces, it’s essential for managers and decision-makers to consciously consider a broader time frame when assessing performance, utilize comprehensive performance evaluation systems, and incorporate feedback from the entire evaluation period.

Recency Bias Effect on Performance Appraisal

Good reviews depend on the reviewer objectively reviewing an employee’s performance from the beginning of the year to the end of the year (for a 6-month period, a 3-month period, etc.).

That means the final review is a summation of all the work that has been done, both the good and the bad, and the in-between as well. This is how a good review works.

With recency bias, however, the scenario is a little different. When reviewers suffer from recency bias, they tend to remember the most recent work the employee has done. And based on the quality of that work, they review their performance.

If a low-performing employee suddenly starts performing better just before the review, then despite their previous low performance, they are going to get a good review.

On the other hand, if an employee performs well throughout the year, but before the review, their performance drops, then despite their previous good performance, they are going to get a bad review.

Recency bias penalizes people based on factors outside of their control and rewards people for momentary bursts of effort.

How to Avoid Recency Effect in Performance Appraisals

One way you can prevent recency bias (unless you have an exceptionally good memory, in which case you have already won the jackpot) is to keep a track record of an employee’s performance. That means making notes of an employee’s work, making notes of their skills, keeping a record of feedback given and received, how they work with other people, etc.

You can do this manually, which might be slightly painstaking (or not, depending on your view), or you can use performance management software to do this. Engagedly has two features that can specifically help with tracking performance: employee feedback and private notes. The exclusive features help eliminate recency bias by providing a holistic view of an employee’s performance.

It’s worth remembering that recency bias cannot be completely eliminated. But there’s no reason why you shouldn’t try your best to get rid of it.

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Author

Srikant Chellappa

CEO & Co-Founder of Engagedly

Srikant Chellappa is the Co-Founder and CEO at Engagedly and is a passionate entrepreneur and people leader. He is an author, producer/director of 6 feature films, a music album with his band Manchester Underground, and is the host of The People Strategy Leaders Podcast. He is currently working on his next book, Ikigai at the Workplace, which is slated for release in the fall of 2024.

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