[markgraydk]

Sadly, you are probably right, at least that the majority of cases misuse KPIs. But dont throw the baby out with the bathwater. KPIs reveal patterns, force you attention towards certain issues and create a base for discussion. They can also pidgeon whole you into misunderstanding what is happening though.

In my experience, KPIs work better as a tool for communication and as input for analysis rather than for optimization of goals. In a previous job I worked with aggregating the Balanced Scorecard for a 10,000 employee corporation. On such an aggregate level where the KPIs are composites of many underlying decisions there is less of a risk of perverse incentives. Instead, they are used for comparing trends across time and similar purposes.

KPIs targeted at individuals or smaller teams are very different than that example though.