The problem is that although it may be possible to 'control' things that can be measured, employees managed this way will withhold their best creative energy unless there's something in it for them (like professional opportunities, personal growth, job satisfaction, etc.)
And they will work against poor managers whenever they can. In small ways, perhaps, like complaining on company time. Or doing only what is asked and not one iota more. But although these small acts of defiance may not hit the corporate metrics in an obvious way, they do add up.
Personally, I think the Canadians are onto something with their fake potholes. Sure, you can have a law against speeding but people will follow it sporadically at best and you have to measure it to manage it. The fake pothole neatly sidesteps this problem by making it in the driver's perceived self-interest to slow down.
It creates a positive incentive to do the right thing, which tends to work better than a negative incentive to do the wrong thing.