The Hidden Flaw of Performance Reviews

Goodhart’s Law is a principle often cited in economics which states: “When a measure becomes a target, it ceases to be a good measure.“ This adage was named after British economist Charles Goodhart, who originally formulated it in the context of economic policy. The essence of Goodhart’s Law is that once a specific metric is chosen as a key indicator for success and targets are set based on that metric, it can lead to unintended consequences. This happens because people start to focus on meeting the specific targets, often through whatever means possible, rather than aiming to achieve the underlying objective that the metric was supposed to represent. For example, if a business focuses solely on increasing the number of visitors to its website as a measure of success, it might engage in practices that boost visitor numbers but don’t necessarily contribute to the actual business goals, like improving sales or customer satisfaction. As a result, the metric (website visitors) no longer accurately reflects the health or success of the business. DIY mouse clip from @laurelgerber2648