Metric fixation invites gaming

Metric fixation is the persistent belief that the most effective means of achieving an objective is attaching rewards and penalties to publicly visible data-driven numerical indicators of comparative performance.

The key components of metric fixation are

the belief that it is possible and desirable to replace judgment, acquired by personal experience and talent, with numerical indicators of comparative performance based upon standardized data (metrics);

the belief that making such metrics public (transparent) assures that institutions are actually carrying out their purposes (accountability);

the belief that the best way to motivate people within these organizations is by attaching rewards and penalties to their measured performance, rewards that are either monetary (pay-for-performance) or reputational (rankings).

Metric fixation is the persistence of these beliefs despite their unintended negative consequences when they are put into practice. It occurs because not everything that is important is measurable, and much that is measurable is unimportant. (Or, in the words of a familiar dictum, “Not everything that can be counted counts, and not everything that counts can be counted.”) Most organizations have multiple purposes, and that which is measured and rewarded tends to become the focus of attention, at the expense of other essential goals. Similarly, many jobs have multiple facets, and measuring only a few aspects creates incentives to neglect the rest. When organizations committed to metrics wake up to this fact, they typically add more performance measures—which creates a cascade of data, data that becomes ever less useful, while gathering it sucks up more and more time and resources.

In the process, the nature of work is transformed in ways that are often pernicious. Professionals tend to resent the impositions of goals that may conflict with their vocational ethos and judgment, and thus morale is lowered. Almost inevitably, many people become adept at manipulating performance indicators through a variety of methods, many of which are ultimately dysfunctional for their organizations. They fudge the data or deal only with cases that will improve performance indicators. They fail to report negative instances. In extreme cases, they fabricate the evidence.

A frequent feature of metric fixation is paying for performance, that is, offering individuals or organizations financial incentives to meet quantifiable criteria. That may work in organizations that exist for the single purpose of making a profit, though as we'll see, even in these cases it is rarely effective. It works even less well in organizations in which employees are oriented to a more idealistic mission, such as schools, universities, medical practices, and hospitals. Whenever reward is tied to measured performance, metric fixation invites gaming.^[1]

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