Incentive Design Entry #0395 Classified Declassified

The reason an unmeasured task disappears

Effort is allocated across tasks that compete for the same hours. Measuring one of them does not add attention; it moves attention off the others.

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Plate 387 — The record with no line on the chart

Intuition test — answer before you read on

Why does introducing a metric for one task tend to eliminate an adjacent unmeasured one?

A support team is given a first-response-time target. Response time improves for eleven straight months. Over the same period, the internal notes that used to explain unusual cases to the next person thin out and then stop, and nobody notices until an escalation arrives with no history attached.

What everyone sees

Measurement is treated as neutral observation, a lens pointed at part of the work. It is not neutral, because the observed and unobserved tasks draw on one finite supply of effort. Adding a measure to one task changes the relative return on every task that competes with it, including tasks nobody intended to deprioritise.

What is actually happening

Holmström and Milgrom’s multitask analysis shows that when an agent divides effort between tasks of unequal measurability, strengthening the incentive on the measurable task reduces effort on the others — and that the optimal contract may therefore involve weaker incentives than the measurable task alone would justify, precisely to protect what cannot be counted. Kerr’s survey of reward systems documents the same pattern across organisations, with stated goals routinely undermined by the metrics installed to pursue them. The modern version is faster because dashboards make the measured task continuously visible: a number that updates hourly does not merely rank higher than an unrecorded task, it is the only one of the two that exists during the working day.

Why it stays hidden

The loss hides because it produces no signal until much later. Unmeasured work has no series to fall, no threshold to breach and no owner to report it, so its disappearance is invisible in the period it happens. When the consequence surfaces, the metric that caused it is showing an unbroken record of improvement and is not a suspect.

Measuring one task does not create effort. It withdraws it from whatever was competing, and the loss is invisible because unmeasured work has no series to fall.

Measuring one task does not create effort. It withdraws it from whatever was competing, and the loss is invisible because unmeasured work has no series to fall.

The hidden part — entry #0395

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Measuring one task does not create effort. It withdraws it from whatever was competing, and the loss is invisible because unmeasured work has no series to fall.

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Sources & further reading 2
  1. Holmström & Milgrom — multitask principal-agent analyses
  2. Kerr — on the folly of rewarding A while hoping for B

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