This is exactly what happen in my previous company.
The story goes like this:
* one of engineers started sugarcoating his reports to look better than others
* then other engineers notice that they now look bad in eyes of the manager because they were blunt in then assessments, so they started sugarcoating their reports
* quickly the point of these reports is lost (they become garbage with no useful information about problems, challenges, what is actually done, etc.)
The story goes like this:
* one of engineers started sugarcoating his reports to look better than others
* then other engineers notice that they now look bad in eyes of the manager because they were blunt in then assessments, so they started sugarcoating their reports
* quickly the point of these reports is lost (they become garbage with no useful information about problems, challenges, what is actually done, etc.)