The Recency Bias of Performance Reviews
Leaders who have tracked a team member’s behavior over the year should be in an ideal position to review performance and overlay it against the goals agreed to at the start. While goal accomplishment assists leaders in looking at the whole record, we all know that most leaders place more weight on what has occurred most recently. This bias makes reviews less accurate and penalizes team members who are fast out of the gate, but end the year without the same intensity.
Leaders naturally over-index on the last few months prior to the review. Due to this recency effect, yearly performance reviews overly reward those who finish strong, encouraging some team members to save their best work until the end of the year. This makes traditional performance reviews much less effective than they are designed to be.
Incorporating self-reviews into this process helps to offset this bias, allowing team members to make their case without an exclusive focus on how they performed in the past few months. Taking stock of performance in a six-month or mid-year abbreviated review is another way to overcome the recency bias.
The best leaders go one step further in eliminating the impact of recency on judgments of performance. They use technology to keep a developing track record of team member performance throughout the year.
Collecting ongoing peer commentary and feedback after every project in a common repository gives leaders the information that allows them to review the entire year. Creating a digital folder where peers and others continually add data points creates a yearend jacket of information that is more evenly balanced and objective.
Performance reviews exert a tremendous influence on decisions about compensation, promotion, and future responsibilities. They are too important to be skewed by a team member’s most recent work.
Offsetting the recency bias natural to leaders when reviewing performance is essential to reach the correct decisions. The best leaders collect data points from the entire year to make the most accurate performance assessments.
To paraphrase Edwards Deming, without all of the data, you’re just a leader with an opinion.