Ofcourse they don't read the reports, who has time to read it? But don't even think about not sending the report, they like to have the option of reading it if they choose to do so.

A closed door removes agency from a cat, an absent report removes agency from a manager.

Indeed, productivity has decreased, because now there’s more output that is waste and you are paying to generate that excess waste.

That’s the solution if you’re the business owner.

That’s definitely not the solution if you’re a manager in charge of this useless activity, in fact, you should increase the amount of reports being written as much as humanly possible. The more underlings under you= more power and prestige.

This is the principal-agent problem writ large. As the comment mentioned above, also see Graeber’s Bullshit Jobs essay and book.