Are we the genie in the bottle?

I've heard that a genie should be sure to give you what you ask for but never what you want. This is what "incentives" and "targets" do. Someone else's slashdot comment follows:

    If you reward students for high grades in exams, you'll get just that. High grades. Not understanding of the subject, just high grades. If you reward bankers for making profits, you'll get just that. High profits. Not financial stability, just high profits.

    The problem with incentives is that exceedingly few people are capable of setting them correctly.

I wonder if an incentive for correct incentive setting would fix things or make the problem worse...

A well known quote from Thomas S. Monson is: "When performance is measured, performance is improved. When performance is measured and reported, the rate of performance accelerates"

However the less quoted statement that prefixed that is: "When we deal in generalities, we shall never succeed. When we deal in specifics, we shall rarely have a failure."

(http://education.byu.edu/ncate/)

And the problem is with targets that are general proxy measures of performance. So if you want more unemployed people on training courses, lots of training courses will spring up. If you want shorter waiting lists, people will be made to wait somewhere else.

The need to be specific so the genie has to give what is wanted instead of what was asked for...