Management has, culturally, become very metrics-oriented. This is the root of the problem under discussion here. See Goodhart's law for a brief statement of why this can't work.
Almost every time I bring this up somewhere, someone pops up to say that metrics are important, key to fair and impersonal management. Without it, everything would suck, and managers couldn't do anything. The problem with that thinking is two-fold:
1. It ignores the fact that, as soon as there's a metric that determines someone's rewards and punishments in a management system (whether it's governmental regulation, corporate middle-management, anarcho-communistic self-management, or anything else), the system of measurement will get gamed, and the most overtly "successful" will end up being the most cleverly sociopathic about it.
2. There is an alternative to strictly quantitative evaluation. The alternative is qualitative evaluation. This requires good judgement, intimate knowledge of the problem domain, good intentions, and the ability to consider context, among other things. Sadly, this is incompatible with bureaucracy, which means you need to either carve a bureaucracy-free zone out of the larger organization to manage a team well or stay out of medium-to-large corporations (and out of small businesses that ape the behaviors of large bureaucracies).
Managers who insist on doing everything quantitatively (and sometimes they're forced to do so by their managers) will not get good results. "Good" is qualitative, not quantitative. Equating "good" with metrics just gives you results that look "good" on paper, but really aren't good.
Probably the biggest benefit of a small organization is the ability to eschew managerial bureaucracy in practice.