Recency effect: Single incident, rational decision

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SPEAK when you’re angry, and you’ll deliver the best speech you’ll ever regret. Decide when you’re emotional, and you’ll make a wrongful judgment. It’s like a road rage, except that you’re doing it in the workplace. This happens a lot of times when managers commit a deadly sentence when they cloud their recent impression of an employee’s performance based on one single incident. Take this case.

Early Monday morning, a strict disciplinarian manager was walking through the storage room when he saw a young man lounging on a shipping crate, whistling and relaxing while playing Angry Birds on his mobile phone. He asked how much he was paid by the company. The young man answered: “P2,500 a week.”

At that instant, the manager paid the man P2,500 and said: “Here’s a week’s pay. Get out of here!”

The manager immediately found the department supervisor and demanded to know who hired that fledgling bum. He replied: “We didn’t hire him. He was just picking up a package from us.”


In real life, a case in point is PLDT’s exhibition match between the country’s national basketball team and selected players from the National Basketball Association, which was called a “fiasco” by observers. The Manila Times reports on July 23, 2014 that “the second game of the much-hyped exhibition series between the Gilas Pilipinas national basketball team and a group of NBA stars scheduled for Wednesday was cancelled.

“PLDT, the organizers of “The Last Home Stand,” announced the cancellation after the fans, some of whom paid as much as P28, 000 for a ticket to watch the first game at the Smart Araneta Coliseum on Tuesday, went home angry and disappointed. The event was promoted as tune-up games for Gilas, which is preparing for the FIBA World Cup in Spain this August. Instead, the national players and the NBA standouts, led by James Harden of the Houston Rockets, joined in doing basketball drills.

“Boos and hisses rained down from the gallery after the sizeable crowd realized that a regular game would not be played.”

Many news reports called it a “fiasco” and a bad PR for PLDT resulting in to a sunk cost of at least an eye-popping P200 million. According to Adrian Wojnarowski of Yahoo Sports, PLDT committed to pay some of the 12 players upwards of US$150,000 each for the two-day event.

More than the money issue, the “fiasco” raises more speculations. Would Manuel Pangilinan, who has just celebrated his 68th birthday, issue the pink slips against those responsible? My wild guess is in the negative. If he does, MVP will be committing a corporal blunder if he relies on this one single incident chopping the heads of those responsible.

In psychology, this is called the “recency effect” or bias when the most recent work performance resulted in an employee’s blunder or victory and wrongfully dominates the manager’s perception of his work performance. The recent performance (or lack of it) is much stronger than the “primacy effect” which I wrote about last week. This is due to the fact that the most recent information tends to have the greater and far-reaching impact unlike the “first impression” tendency of the primacy effect.

OK, fine, whatever. P200 million total damages is not a small amount. This is not to mention the unquantifiable PR disaster that the “fiasco” has created in the minds of PLDT customers. But what if those PLDT executives are also responsible for bringing in billions in the past and are also expected to rake in more zillions that could easily wipe out that P200 million in their books?

The answer deserves some serious chomping, not chopping. After all, MVP is not known to decide in an instant that puts the job security of people. Remember his commencement speech at the Ateneo sometime ago when he was accused of plagiarism?

These are, indeed, some major lessons for those in management. And if corporate managers and leaders alike are to rationally address an employee’s blunder, they have the obligation to decide not on the basis of one single incident, whether it comes from a first or recent impression. The most important thing here is the totality and consistency of one’s work performance over the years, not to mention how the lesson can propel people to go beyond their mistakes, regardless of its gravity.

After all, people who have committed some mistakes are bound to disprove things in the hope of redeeming themselves. Nothing lasts forever as long as you don’t make excuses. Apologize right away. And this is what MVP did. That alone is more than enough to disarm angry fans. That is “class leadership,” according to Anthony Cuaycong of BusinessWorld.

We are all in business. Some of us are service providers, while the rest are manufacturers. Some make good, others make it difficult for customers, and still there are others who make and perpetuate excuses. To which do you belong?

Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to elbonomics@gmail.com or follow him on Facebook, LinkedIn, or Twitter for his random thoughts.

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