In a system where your rewards are based on the look of powerpoint presentations that are delivered to directors, you end up spending all your time optimizing the data on the slides. The same principle is applied all over the place, in almost every human endeavor. Using the wrong measure of progress means we waste time and effort. It also has a side effect of making everyone miserable, like the guy in this story. See health care, prison system, etc.
By the way, this isn't a problem unique to the government. His gripes sound very similar to my reality. I work in a large aerospace company.