Recency bias refers to the human tendency to give excessive importance to recent experiences or the latest information when predicting future events. This bias can mislead us into believing that recent events hold more significance in shaping the future. It is quite prevalent in office setups.
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 corporates. But since January 2022, he has delivered much, 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 where 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.
Recency Effect in 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, or 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 penalises 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 a 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 in eliminating 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.
Engagedly’s performance module combines performance management with elements of employee engagement. Schedule a quick demo to talk to our experts.
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 2023.