It's time again for me to recommend Measuring and Managing Performance in Organizations by Austin[0]. Don't let the underwhelming title fool you: it's largely

It's time again for me to recommend Measuring and Managing Performance in Organizations by Austin[0]. Don't let the underwhelming title fool you: it's largely a book on why it can't be done. Austin takes classical principal-agent models and extends it to add a third participant: the client. He then shows that difficult-to-observe work at first improves and then worsens under any metrics regime. No single metric can be found that will give the desired performance. The basket of metrics that can successfully create the desired outcome is one where the principal has total visibility into the agent's work -- which contradicts the original problem of difficult-to-observe work (ie, anything requiring skill). [0] http://www.dorsethouse.com/books/mmpo.html http://www.dorsethouse.com/books/mmpo.html