I am employed at one of the German Fraunhofer institutes as PhD student. We are doing a lot of research and are partially publicly funded, but we are not a university. However, my answer might still provide some insight.
My research output is precisely measured and evaluated. Each time one of my papers is accepted I need to add it to an internal database. It stores the name(s) of the author(s), the paper's title, the conference/journal at which it will be presented/published, the date of publication, etc. The database is accessible for the entire institute. There is a Fraunhofer-wide database that publicly tracks most (but for some reason not all) of my publications, too.
This data is used in various ways.
- Internal publication tracking: I have seen many presentations which listed the number of publications in the last year and encouraged the institute's researchers to continue with their work. This is also about motivation. A few selected publications with high impact (e.g., at high-ranked conferences, papers presenting great results, ...) get explicitly mentioned at the institute's meetings in front of all other researchers. This can give you a little bit of (internal) fame but also some potential envy...
- You job may depend on your publications. If you have absolutely no scientific output your contract might not be renewed. The same is true for research projects. A list of papers helps you A LOT when it comes to defending the importance of your work and why the institute shall continue working on it.
- Having a complete(!) list of all own papers in one field of research is crucial when it comes to writing research proposals. Having a list of great publications that you can reference usually increases your chances. Thereby you show that the institute has the basic knowledge to work on such a project.
- The same is true for offers to potential customers in the industry. You can search the publication list for papers that are related to the customer's demands and underline your abilities thereby.
- When we have finished a publicly funded project we are asked to list all our publications that were funded by the project. Once, I talked to one of the external project organizers/funders and he emphasized the importance of publication lists. Thereby he can show that this money was well-invested and he will be allowed to fund future projects. He reports the scientific success to the sponsors.
- More motivation: If I have many and/or good publications, I get a monetary bonus. It is called "variable Vergütung", which means: You get your normal E13 TVöD payment and, depending on your performance, some bonus usually in the four-figure Euro range. (TVöD = collective agreement for jobs in the public sector in Germany).
More about the "variable Vergütung": https://www.fraunhofer.de/content/dam/zv/de/ueber-fraunhofer/Personalpolitik/Variable%20Verg%C3%BCtung.pdf
This bonus depends mostly on my publications. This gives an incentive to publish on high-ranked conferences and to publish many papers. The bonus is part of my salary, thus, I have to pay taxes on it, it ends up on my banking account, and I can do whatever I want. It is NOT intended to be spent on research.
- The entire institute is evaluated regarding its publications and many other performance parameters. If we have a lot of publications we can show our scientific abilities and there is also some ranking.
However, this is not as great as it sounds. This precise tracking causes a lot of pressure, emphasizing the culture of "publish or perish" even more. You are expected to publish, you should have papers at high-ranked conferences/journals, you should write many papers. So some people tend to favor quantity instead of quality, for example if your boss wants to see 2 or 3 papers this year to give you a bonus. So people sometimes tend to go for the low-hanging fruits.
Especially the bonus system often appears to be unfair. If you have several hundreds of researchers there has to be some ranking of who gets the most and who does not get anything at all. Some people will always tell you that paper X is better than paper Y but paper Y got the bigger bonus. There are some basic rules but it seems to be mostly up to your boss how much reward you get.
The reward/bonus system might not always help you. For example, if you have to work in industry-funded projects you spend a lot of time but might not be allowed to publish. So, that reduces your chances on a bonus. This might again create some envy since your coworkers might have more/less research time compared to you and therefore better/worse chances on a bonus. (NB: We actually have a few industry-funded projects or collaborations whose results we are allowed to publish. But that is rather an exception).
Additionally, the internal tracking is not well-designed in my opinion. A lot of low-quality conferences are on the list (because they are Scopus-listed) while others, small ones but with high reputation in our field, are left out.
IMHO, there is some room for improvement although I have to confess that I benefit from this concept.