The Tyranny of Metrics

by Jerry Z. Muller

is the notion of narrowly self-interested agents a fact of life, or is it exacerbated by a managerial ideology that uses extrinsic rewards based upon simple models of human behavior that then become self-fulfilling prophecies? Sometimes, the way in which managers and employees are addressed by their company actually influences the way they think, so that they come to act in the narrowly self-interested way posited by the most reductive versions of principal-agent theory, with deceit and guile.13 In fact, it may create a situation in which the managers and employees most knowledgeable about the workings of the performance indicators are best positioned to manipulate those indicators for their own benefit, and most likely to do so.