This was the only book worth reading when I was researching metrics for our team at work.
TL;DR: Don't use performance metrics for human beings. You almost certainly won't get what you want, and you'll probably get nasty side effects instead.
If anything, this is a brilliant example of how applying measurable incentives can distort motivations and make people do stupid things to please whatever metrics are being measured.
Left to their own devices, these very smart and ambitious people would no doubt make up their own mind about the value of their time and ensure they don't waste time milling about when they're busy, and so go to lunch early or late or in the middle if they're not too busy anyway or want to chat with someone in the queue. Instead, they're now forcing themselves to fit a stupid "penalty window" to save a few bucks, because that's what the incentive system in place dictates.
Measurements are a very, very dangerous beast. Apply with caution.
(Great book on the topic: http://www.amazon.co.uk/Measuring-Managing-Performance-Organ... )
Dysfunction may arise when you are unable to measure all the relevant dimensions of the work being performed. People will often shift their effort to the dimensions that are being measured and ignore the remaining tasks, no matter how important they are. This results in less value being delivered compared to a scenario with no measurement based incentives.
The author mentions software development as an area that is specially prone to dysfunction.
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