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Why Sustainable Performance Requires More Than Good Metrics

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Why sustainable performance requires more than good metrics: when the problem is not a flawed measure but the conditions around it.

What the research found

V. F. Ridgway’s 1956 research for Administrative Science Quarterly, one of the earliest systematic studies of performance measurement, found that even carefully considered quantitative measures can produce dysfunctional consequences once people begin optimising specifically for the measure rather than for the underlying goal it represents — documented through cases of employment interviewers and quota-driven investigators. His conclusion was not that measurement is inherently flawed, but that “indiscriminate use and undue confidence” in measures, absent broader judgement, is where the danger lies.

Steven Kerr’s 1975 research for the Academy of Management Journal extended this from measurement design specifically into reward design, finding that organisations frequently reward behaviour that diverges from their stated goals, across contexts as varied as manufacturing, insurance, politics and medicine. His finding implies that even a well-designed metric can be undermined by a reward structure layered on top of it that points in a subtly different direction — meaning the metric’s design alone cannot guarantee the behaviour the organisation actually wants, because behaviour follows the full incentive picture, not the metric in isolation.

Nelson Repenning and John Sterman’s research at MIT Sloan, published in California Management Review, approached sustainability from a systems perspective, finding that performance gains achieved through intensive attention — “working harder” — tend to fade once that attention moves elsewhere, because the underlying conditions producing the gain were never changed. Their research implies that a metric can improve for reasons that have nothing to do with the durability of the underlying capability it is meant to represent, which means the metric’s trajectory, read on its own, cannot reliably distinguish a durable gain from a temporary one.

Amy Edmondson’s research at Harvard Business School, based on a field study of 51 manufacturing teams, adds a further and distinct dimension: psychological safety, not team efficacy, predicted the learning behaviour that in turn drove performance. This suggests that a metric’s ability to track genuine improvement over time depends partly on whether the people closest to the work feel safe surfacing the honest information — including bad news — that any accurate metric ultimately depends on.

Where it converges and where it diverges

Read together, these four bodies of research converge on a shared conclusion from four different directions: a metric’s design determines what gets measured, but it does not, on its own, determine what gets produced. Ridgway’s research shows that a metric alone can create unintended distortion. Kerr’s research shows that a metric’s effect depends on the full reward structure around it, not the metric in isolation. Repenning and Sterman’s research shows that a metric’s improvement can be driven by attention rather than durable capability, making the metric’s short-term trajectory an unreliable signal of long-term sustainability on its own. Edmondson’s research shows that a metric’s accuracy over time depends on whether people feel safe contributing honest information to it. None of the four researchers argues against measurement; each identifies a distinct condition, external to the metric’s own design, that determines whether the metric can do the job it was built to do.

Where the research diverges is in what it implies should receive primary attention. Ridgway’s and Kerr’s work point toward incentive and reward design as the central lever — get the incentives right, and the metric will track something closer to what the organisation actually wants. Repenning and Sterman’s work points toward embedded capability as the central lever — build the underlying capacity for the work to sustain its own quality, rather than relying on periodic bursts of attention, regardless of how the metric is defined. Edmondson’s work points toward relational and psychological conditions as the central lever — without safety to surface honest signal, even a well-incentivised, capability-embedded system will eventually lose the accurate information a metric depends on to mean anything at all. These are not contradictory positions so much as different entry points into the same underlying problem, and an organisation that addresses only one — redesigning incentives without building capability, or building capability without addressing psychological safety — is, according to this body of research collectively, likely to find its gains less durable than expected.

A further point of convergence worth naming is what none of these four studies argues: none suggests metrics should be abandoned, simplified into vagueness, or treated with blanket distrust. Each treats measurement as a necessary but insufficient component of a larger system — a conclusion that sits between the two more extreme positions an organisation might otherwise default to, either placing excessive faith in a well-designed metric or dismissing measurement altogether once one has been found to mislead.

The four conditions identified across this research also differ in how visible their absence is likely to be. A measurement-integrity failure of the kind Ridgway documented tends to surface eventually, because the gap between the metric and reality widens until it produces an undeniable discrepancy. An incentive-misalignment failure of the kind Kerr documented can persist for considerably longer, because the behaviour it produces is often fully compliant with every written rule and therefore generates no obvious trigger for anyone to investigate. A capability gap of the kind Repenning and Sterman documented is arguably the hardest to see in real time, since it only becomes visible once the attention sustaining a gain is withdrawn — which may be months or years after the gain was first celebrated. A psychological-safety gap of the kind Edmondson documented may be the least visible of all from a leadership vantage point specifically, since its primary symptom is an absence — information that was never raised — rather than a presence that can be observed and measured directly.

This asymmetry in visibility has a practical implication worth stating plainly: an organisation that only investigates the condition most likely to produce a visible symptom will systematically under-invest in the conditions whose failure stays hidden longest, not because those conditions matter less, but because they are structurally harder to notice until the cost has already accumulated.

Taken together, the four studies suggest that “sustainable performance” is better understood as a property of a system with several interdependent parts than as an attribute of any single well-chosen number. A metric can be well designed, an incentive structure can be broadly sound, embedded capability can be genuinely present, and psychological safety can be reasonably strong — and an organisation that has all four in place is still describing something closer to a set of conditions it has to keep maintaining than a problem it has permanently solved. None of the four researchers reviewed here frames their finding as a one-time fix, and the shared implication of reading them together is that sustainability itself is an ongoing property, not a state an organisation arrives at and then stops tending to.

What remains unresolved

Whether there is a reliable way to distinguish, in real time rather than in hindsight, a metric improvement driven by durable capability from one driven by temporary attention — the research collectively identifies the distinction as important without offering a settled, general method for detecting it as it happens.

How the four conditions identified across this research — measurement integrity, incentive alignment, embedded capability, and psychological safety — interact with each other in practice, and whether strengthening one tends to reinforce or substitute for the others.

What the practical limit is on how much organisational attention can reasonably be devoted to maintaining all four conditions simultaneously, given that each requires ongoing effort rather than a one-time fix.

For how this pattern presents in other kinds of organisation, see other sectors.

Questions worth considering

  1. When performance improved and then faded, was the metric at fault, or were the conditions around it?
  2. Can the organisation tell, as it happens, whether an improvement reflects lasting capability or a temporary burst of attention?
  3. Do the people closest to the work feel able to report the honest information that any accurate measure depends on?

More on this topic: Performance.

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What Happens If She Leaves? — sustainable performance
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Sources

Amy C. Edmondson, “Psychological Safety and Learning Behavior in Work Teams,” Administrative Science Quarterly, 44(2), 1999, pp. 350–383.

Steven Kerr, “On the Folly of Rewarding A, While Hoping for B,” Academy of Management Journal, Vol. 18, No. 4 (December 1975), pp. 769–783.

Nelson P. Repenning and John D. Sterman, “Nobody Ever Gets Credit for Fixing Problems that Never Happened: Creating and Sustaining Process Improvement,” California Management Review, Vol. 43, No. 4 (2001), pp. 64–88.

V. F. Ridgway, “Dysfunctional Consequences of Performance Measurements,” Administrative Science Quarterly, Vol. 1, No. 2 (September 1956), pp. 240–247.

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Frequently Asked Questions

No — every study reviewed here treats measurement design as necessary. The shared finding is that it is not sufficient on its own, and that the conditions surrounding a metric matter as much as the metric’s own design.
The research does not settle this, and different studies emphasise different conditions based on their focus and method. The more consistent implication is that neglecting any one of the four leaves the system vulnerable through that specific gap, regardless of how strong the others are.
The research suggests checking whether the gain depends on someone’s continued active involvement to hold, as a partial indicator, though none of the studies reviewed here offers a fully reliable, general test for this distinction.
No — the underlying research spans manufacturing, insurance, professional services and other sectors, and the mechanisms described appear to operate independently of industry or size, though how visibly they manifest may vary by context.
Their systems-based research in California Management Review found that gains achieved through intensive attention tend to fade once that attention moves elsewhere, because the underlying conditions producing the gain were left unchanged. The implication is that a metric can improve for reasons unrelated to durable capability, so its trajectory alone cannot reliably separate a lasting gain from a temporary one.
Kerr’s research for the Academy of Management Journal found that organisations frequently reward behaviour that diverges from their stated goals, across settings as varied as manufacturing, insurance, politics and medicine. The implication is that behaviour follows the full incentive picture rather than the metric in isolation, so a well-designed metric can be undermined by a reward structure pointing in a subtly different direction.
The page suggests its main symptom is an absence, namely information that was not raised, rather than something that can be observed and measured directly. Amy Edmondson’s field study of 51 manufacturing teams found that psychological safety predicted the learning behaviour that drove performance, which links it to the honest information any accurate metric depends on.
The four studies reviewed do not frame it that way. Read together, they treat sustainability as a property of a system with several interdependent parts, closer to a set of conditions that has to keep being maintained than to a problem permanently solved.