How Goodhart's Law Breaks Metrics
When a measure becomes a target, it ceases to be a good measure. People optimize for metrics, not goals, creating distortion and gaming.
All articles tagged with "Incentives"
When a measure becomes a target, it ceases to be a good measure. People optimize for metrics, not goals, creating distortion and gaming.
Map what's rewarded with bonuses and recognition. Identify what's punished with penalties and criticism. Compare stated versus actual incentives.
Diminishing returns means more input yields less output over time. Supply and demand set prices. Opportunity cost is the next best alternative foregone.
Soviet nail factory paid by weight produced useless heavy nails. Cobra breeding bounty in India increased cobras. Metrics drive unintended gaming.
Incentives direct attention and effort toward rewarded behaviors. They signal importance and create competition. Misaligned incentives cause dysfunction.
Metrics create visibility making performance transparent. Accountability follows visibility. They enable improvement but encourage gaming the measures.