Most performance reviews suffer from a major problem- recency bias. Recency bias is the result of a common shortcut people use to take decisions - the availability heuristic. This is the natural tendency of people to overestimate the importance of events with greater "availability" in memory, which can be influenced by how recent the memories are or how unusual or emotionally charged they may be.
...influenced by how recent the memories are or how unusual or emotionally charged they may be.
In performance reviews it occurs whenever somebody provides feedback considering only the most recent notable interactions and/or achievements of the person they are reviewing.
It may be that the person has recently completed a large project, helped get something done or just bought you lunch. Or the inverse, they failed to deliver on something, refused to help you out or you’ve gotten in an argument about something. If these interactions happen just before a review, they tend to have a disproportionately large impact on the responses that peers, managers and reports provide.
In either case, this recent behaviour may not be a good reflection of how someone has performed over a longer period of time. After all, it’s pretty common for people to go through ups and downs in performance and for achievements and milestones to be hit or missed at various points in time.
The problem is that managers then tend to base key decisions on this biased review data. Decisions that may have a significant impact on your company, team and the individual's future success and motivation.
Given this, you may be wondering how to avoid introducing this bias in your reviews. Here are a few tried and tested solutions:-
Hold more frequent reviews. The obvious solution (and a good idea in general) is to hold performance reviews on a more regular basis. The recency bias is a particular problem in companies that rely on long annual or biannual review cycles, as the odds of something significant happening at the end of a longer cycle are far higher. I always recommend quarterly cycles (every 3 months). These are spread out enough to capture a meaningful portion of achievements and work but not too long, such that the entire period is still fresh in memory and short term events won’t cloud people’s judgement. I know what you’re thinking- you don’t run reviews that often because they are a time-consuming pain in the butt. That’s a common problem and something I hope to cover in future posts. For now, if you identify with this, it’s probably because you need to be using a better performance review process or tool to handle the work for you.
Collect feedback from a wider group. Another approach that helps is to collect feedback from a wider audience. It’s one of the key reasons 360 reviews are so powerful. If you’re collecting feedback from 5 people it's less likely that all of them are affected by recent events, so you’re probably collecting more objective and relevant data overall. I always recommend that companies run 360 reviews as opposed to manager review whenever possible. Also the larger the peer group the better. Ideally at around 3 peers is a good size to ensure an objective mix of responses. Again, more people in a review means it can be more time-consuming to manage and that's why it's critical that you have a good tools and a lightweight review process in place.
Review people’s work & achievements before giving feedback. A great way to improve the quality of performance reviews and avoid the recency bias, is to perform a review of people’s achievements and work before providing feedback. Google does this by asking evaluees to generate a report of their achievements throughout the period, before the review occurs. That way people are reminded of everything someone has done just before they perform the evaluation. Google’s process works well but requiring people to write a defence of their achievements can add significant time on to the performance review cycle. If you can’t afford the extra time, it’s still worth trying to do your own manual review of people’s achievements or sitting just down with the evaluee to discuss them beforehand.
Google does this by asking evaluees to generate a report of their achievements throughout the period, before the review occurs.
Know thy self. This last point is easier said than done- be hyper-aware of the biases that affect you when reviewing people’s performance. Did you just have an argument with the someone or did they just do something really great to help you out? Think carefully about any significant recent events you’ve been exposed to and whether these are an accurate representation of the person’s longer-term performance. Was it just a one-off argument that is not a real reflection of how the person performs or is this a persistent issue throughout the period? Consider all the facts and try to be as objective as possible when providing your feedback. Of course, this is difficult to do as one is often not aware of the problem in the first place.
Think carefully about any significant recent events you’ve been exposed to and whether these are an accurate representation of the person’s longer-term performance.
As with most things, recency bias can be minimized with regular, open communication. Make sure you openly discuss the issue and that everyone in your company is aware of the problem and needs to work on ways to minimize it. As a manager reviewing feedback, be aware that it will impact people's responses. Make sure that you sanity check this feedback by talking to people and getting a wider perspective before taking big decisions.