Intrenion

Pattern: Misaligned incentives

Behavior that undermines stated goals is rewarded more reliably than behavior that advances them.

Situation

  1. In this condition, official goals and mission statements emphasize one set of outcomes while performance evaluations and rewards emphasize different measurable indicators.
  2. In this condition, individuals who achieve high scores on tracked metrics receive promotions, bonuses, or recognition.
  3. In this condition, teams allocate more time and resources to directly measured activities than to activities that are not formally measured.
  4. In this condition, reports and dashboards display improving indicators while broader mission-related results remain flat or unclear.
  5. In this condition, employees who question the relevance of dominant metrics experience slower advancement or reduced visibility.
  6. In this condition, cross-functional tension emerges when one unit’s metric improvement coincides with another unit’s operational strain.
  7. In this condition, leadership communications continue to reference strategic priorities that are not reflected in everyday reward structures.

Assessment

  1. This occurs because performance management systems translate broad goals into simplified quantitative proxies that are easier to measure and compare.
  2. This occurs because career advancement and compensation decisions are tied to these proxies, making them the dominant reference point for individual behavior.
  3. This occurs because evaluation cycles are shorter than the time horizon required to observe meaningful progress on core objectives.
  4. This occurs because accountability for mission-level outcomes is distributed across multiple actors, while metric ownership is assigned to individual actors.
  5. This occurs because leaders rely on aggregated reports that obscure discrepancies between reported indicators and underlying conditions.
  6. This occurs because units are assessed independently, creating incentives to optimize local metrics even when doing so degrades system-level performance.
  7. This occurs because changing metrics or reward criteria threatens established power positions and, therefore, faces internal resistance.

Consequence

  1. Without altering the incentive structure, reported performance will continue to improve on tracked metrics regardless of underlying mission progress.
  2. Without changing evaluation criteria, individuals will prioritize metric optimization over substantive goal advancement.
  3. Without realigning accountability with mission outcomes, responsibility for systemic underperformance will remain diffuse and contested.
  4. Without modifying reward distribution across units, cross-functional conflict over metric trade-offs will persist.
  5. Without revising the measurement framework, leadership will remain dependent on indicators that do not reliably reflect actual conditions.

Decisions

  1. We decide to allocate a fixed and publicly declared percentage of our work time to mission-relevant tasks that are not formally measured because this gives us sustained contribution to core objectives instead of concentrating all effort on tracked metrics to maximize evaluations, and accept that our formal performance ratings may decline.
  2. We decide to document and retain private evidence of discrepancies between reported indicators and observable outcomes because this gives us defensible factual grounding if performance narratives are challenged instead of participating in metric-focused reporting without qualification, and accept that we may be excluded from high-visibility projects.
  3. We decide to refuse to participate in actions that directly manipulate or artificially inflate tracked metrics because this gives us protection from future accountability or reputational damage, instead of engaging in accepted metric-gaming practices to secure advancement, and accept that we may forgo promotions or bonuses tied to those metrics.

Direct formulations

  1. I will dedicate a fixed, declared portion of my work time to unmeasured, mission-critical tasks and will not redirect that time to activities chosen solely to raise my evaluation scores.
  2. I will maintain my own written record of discrepancies between reported metrics and actual outcomes and will reference it when discussing performance narratives.
  3. I will not take part in inflating, reframing, or selectively reporting metrics to make results appear stronger than they are.