concept Updated 2026-07-24 Tags: Measurement, Incentives, Economics, Management

Goodhart’s Law

Goodhart’s Law is the measurement failure pattern in The laws of the office revisited: once a measure becomes a target, it can stop being a good measure of the underlying goal. The episode attributes the idea to Charles Goodhart, whose original monetary-policy point is generalized into a workplace and public-service rule.

The source makes the law concrete through Kenny’s cashier story and the British hospital target case. In both, a visible performance number encouraged behavior that protected the metric while weakening the real objective, turning measurement into Workplace Metric Gaming.

Key Claims

  • Metrics are useful until rewards, punishments, or status make the number worth gaming.
  • A metric can fail even when it was originally correlated with the real goal.
  • Public ranking can intensify metric gaming because people protect reputation as well as pay or evaluation.
  • Goodhart’s Law is a design warning: pair metrics with qualitative checks, failure-mode review, and outcome grounding.

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