Whenever managers pay attention to output numbers (alone) people are more likely to lie (or falsify their reports). Why do they do this? The reason is simple. The only way to avoid grief is to feed the wrong information to management! Nobody likes trouble.
An alternative response is to ‘distort’ the system – bring things forward or back in the accounts, move work to different queues, claim orders as sales, spend money now, hold over spend until the next period and so on. Such distortions usually incur a cost to the system. Looked at this way, it is better for people to lie than distort the system.
People don’t behave in this way because they are bad or want to be difficult, they behave this way because they are being treated as part of the problem instead of part of the solution. People who do the work have the scope to improve it; all they need is help with method.
The first priority for management is to work with people to solve the problem of what measurement to use, all the while adopting an attitude of testing measurement rather than ‘testing’ their people.