The Tyranny of Metrics is largely about this topic. Some of the points made there are that:
Metrics can distort info by:
Measuring the most easily measurable
Measuring the simple when the desired outcome is complex
Measuring inputs rather than outcomes
Degrading information quality through standardization
Metrics can be gamed by:
Creaming (e.g. surgeons only taking on the easiest surgeries to improve their stats)
Improving numbers by lowering standards
Improving numbers through omission or distortion of data
Cheating
Negative consequences of metrics include:
Goal displacement through diversion of effort to what gets measured.
Promoting short-termism.
Costs in employee time.
Diminishing utility.
Rule cascades. In an attempt to staunch the flow of faulty metrics through gaming, cheating, and goal diversion, organizations institute a cascade of rules.
Rewarding luck. Measuring outcomes when the people involved have little control over the results is tantamount to rewarding luck.
The Tyranny of Metrics is largely about this topic. Some of the points made there are that:
Metrics can distort info by:
Measuring the most easily measurable
Measuring the simple when the desired outcome is complex
Measuring inputs rather than outcomes
Degrading information quality through standardization
Metrics can be gamed by:
Creaming (e.g. surgeons only taking on the easiest surgeries to improve their stats)
Improving numbers by lowering standards
Improving numbers through omission or distortion of data
Cheating
Negative consequences of metrics include:
Goal displacement through diversion of effort to what gets measured.
Promoting short-termism.
Costs in employee time.
Diminishing utility.
Rule cascades. In an attempt to staunch the flow of faulty metrics through gaming, cheating, and goal diversion, organizations institute a cascade of rules.
Rewarding luck. Measuring outcomes when the people involved have little control over the results is tantamount to rewarding luck.
Discouraging risk-taking.
Discouraging innovation.
Discouraging cooperation and common purpose.
Degradation of work.
Costs to productivity.