I don't like this story. The outcome is only accidentally good and what the author seems to miss entirely is the elephant in the room: A crass failure to communicate with the developers. If you try to establish something like KPIs (not commenting on if that is good or bad here) you need to talk to the team and get them on board. If you treat them like lab rats and try to measure individual performance from the outside that is an obvious fail. In the end, where they state that they "quietly" dropped it, indicates that the real lesson was not learned.

Uh, and a dilbert comic.