Everything is a system—and some systems are markets. A market is also a system.
This is why it's important to know how to think in systems, and about psychology, statistics, variation, knowledge and everything else that influences systems—if you want to work in one.
There's more to most systems than just incentives. They are a small part of what goes on.
If you want something more academic I recommend Measuring and Managing Performance in Organizations by Robert Austin [1]. There is a sample that is a pretty good introduction as well [2].
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.
Senge, in the foreward of that book, gives almost all credit to W. Edwards Deming—who is the originator of many of the ideas of organizational systems thinking and how it integrates with Management. So, if you want to go deeper, Deming's book "Out of the Crisis" is a good tome.
This is why it's important to know how to think in systems, and about psychology, statistics, variation, knowledge and everything else that influences systems—if you want to work in one.
There's more to most systems than just incentives. They are a small part of what goes on.