3. Align incentives of the judges and the judged, reducing the pressure on metrics (ex. shared fate, belief in the cause, personal growth and fulfillment)

This is the answer. The higher performance orgs I’ve worked for have had excellent incentive alignment and cohesion. The metrics were there, but fairly mediocre.

Places with robust metrics ranged from excellent to meh. One place had a sales team that was owning it, and the leadership was shoveling cash into wheelbarrows. But the company was losing a fortune because the sales metrics were precisely stupid.

I don't think this is possible. In a sufficiently large organization, however much you try to prevent it, some employees will be "psychopaths" (going by Hintjens's definition) looking to game the system. Whatever the metrics are, they will put in only enough effort to advance their own interests, and assuming they succeed (and at least some will) at getting raises/promotions, the org is then at risk of (legitimate) legal action from other employees who put in more actual work and get lower compensation.

It's not even that there are pyschos, it's that incentives wane with scale because individuals have less control over outcomes.

That is still an alignment problem. Psychopaths can be good for the org, you just need better mapping of the game and reality.

Or - stop with the evaluation nonsense and utilize your energy into pushing business goals. Metrics should be used to inform, not as targets.

You get what you measure. Measure what you want to get.

So first be really sure what it is you want to get.

What you want to get will be hard to measure. Accept that as truth. However accept no proxy measures.

Measure only the specific outcomes you want.