This reminds me of how management measured our production. It counted the number of cases we'd complete and rate us accordingly. But if too many people (for the arbitrarily set figure) earned the top rating, management unilaterally raised the production level.
Bad management is self perpetuating. Employees fear losing their job so they treat management with respect, are polite, laugh at their jokes and provide reinforcement for their management's decisions. Thus, management believes they are doing a great job based on employee feedback. If some unhappy employee is foolish enough to candidly state his/her feelings about how things are going, management instantly gets very defensive and assumes that since everyone else is happy and you are the only one complaining thus, the problem is you and not management. That guy is soon eliminated and this further puts employees on pins and needles worrying about their own job security.