When Employees Start Working For The Metrics Instead Of The Mission

Why Performance Metrics Change Behavior

Leaders often hear the phrase, “What gets measured gets managed.” There is truth in that statement, but there is another side that deserves equal attention. What gets measured also changes behavior.

British economist Charles Goodhart described this tendency decades ago when he observed that once a measure becomes a target, it stops functioning as a useful measure. The principle, now known as Goodhart’s Law, explains why well-designed performance systems sometimes stop producing the results they were created to achieve. Most employees are not trying to manipulate the system. They are responding logically to the incentives placed in front of them. If bonuses, promotions, or recognition depend on one particular metric, employees naturally devote more attention to improving that number. Over time, people become highly skilled at succeeding within the measurement system, even if the organization itself is no better off. Leaders may believe they are rewarding performance when they are actually rewarding the behaviors that produce stronger numbers.

When Good Performance Metrics Produce Bad Behavior

Business history is filled with examples of organizations unintentionally rewarding behaviors they never wanted. After teaching for decades, I have seen firsthand how an emphasis on standardized testing often does little to prepare students for the kind of critical thinking they need later in life. The students may score well on exams, but that does not necessarily mean they have learned how to analyze problems or think independently.

I saw something similar in sales. Those extra hours salespeople logged often resulted in longer phone calls without producing more sales. Had the organization focused on improving closing skills or building stronger customer relationships instead of simply measuring time on the phone, the results likely would have been very different.

One of the most widely discussed examples occurred at Wells Fargo. Employees were under enormous pressure to meet aggressive account-opening goals. Those performance metrics became so important that thousands of unauthorized customer accounts were eventually created simply to satisfy the numbers. Once the measurement became the primary objective, the original purpose behind it was lost.

Few organizations experience failures on that scale, yet the underlying lesson applies everywhere. Every performance metric teaches employees what leaders truly value. If that lesson differs from the organization’s purpose, employees eventually begin working toward the measurement instead of the mission. The irony is that organizations can achieve better-looking numbers while moving farther away from the outcomes those numbers were supposed to represent.

It has also been my experience that employees find work-arounds. Virtual employees can buy mouse jigglers to make it appear they are constantly working. Earlier in my career, I worked for an organization where managers would actually sit outside employees’ homes to make sure no one came home early. That practice did not create better performance. It simply encouraged people who finished their work to spend time at the mall or a movie rather than returning home because they knew someone might be watching.

The Problem Is Unreliable Metrics

Organizations need meaningful performance metrics because leaders cannot improve what they never evaluate. Without reliable measures, it becomes difficult to identify trends, allocate resources, or determine whether important initiatives are making a difference. The real problem is assuming that everything that matters can be measured equally well.

Imagine two employees working on the same challenge. One spends an afternoon asking difficult questions, identifying hidden risks, and exploring alternatives before an important decision is made. The other answers dozens of emails, attends several meetings, produces multiple reports, and checks every assignment off a task list. At first glance, the second employee appears more productive because the accomplishments are easier to count. Yet the first employee may have prevented an expensive mistake before it ever happened. Performance metrics rarely tell the entire story because the most valuable contributions are often the hardest to measure.

I once worked with someone who seemed to spend half the day sending emails describing everything he had accomplished. Had he spent that time actually accomplishing more, he would have created far greater value. Unfortunately, organizations sometimes reward visible activity because it is easy to measure, even when it contributes very little to meaningful results.

Performance Metrics Also Influence Motivation

Performance metrics influence behavior and motivation, but they are most effective when people understand why those measurements matter. During my interview with psychologist Dr. Richard Ryan, one of the creators of Self-Determination Theory, he explained that people are far more engaged when they experience autonomy, competence, and purpose than when they simply complete tasks because someone else is measuring them.

That helps explain why organizations sometimes see engagement decline even while performance dashboards improve. When employees become preoccupied with achieving numbers instead of understanding why those numbers matter, the work itself can begin to lose meaning. Compliance gradually replaces commitment. People may continue producing measurable results while becoming less invested in the broader mission those results were intended to support.

Building Better Performance Metrics

Before introducing new performance metrics, leaders should ask themselves what behavior they expect it to encourage. They should also ask whether employees could improve the number without improving the outcome. If the answer is yes, the metric probably needs refinement. Leaders should also consider what valuable behaviors the measurement may overlook. Will employees become less collaborative because individual performance is emphasized? Will creativity decline because experimentation slows measurable productivity? Will people avoid difficult conversations because those conversations take time away from activities that improve their numbers? Every performance metric teaches employees what success looks like. Before introducing a new one, leaders should ask themselves a simple question: If everyone succeeds according to this measurement, will the organization actually be better off? If the answer is anything less than an immediate yes, the metric deserves another look.