The Peter Principle

Avoiding Promoting People to a Level of Incompetence

The Peter Principle

Why some never quite seem to get it right...

© iStockphoto

Have you ever dealt with someone who just isn't up to the job they're doing and wondered, "How on earth did he/she get that job?"

If so, you've probably seen the Peter Principle in action.

The principle states that, in hierarchical organizations, people generally get promoted up the hierarchy till they reach one level above their level of competence. This phenomenon was first crystallized by Dr Laurence J Peter, a sociologist, lecturer and business consultant, in his 1968 book "The Peter Principle".

While the book is written in a lighthearted vein, there's more than a grain of truth in its well-researched analysis of one of the main flaws inherent in hierarchical structures.

Understanding the Peter Principle

There are various features of the design of hierarchical organizations that make them places where the Peter Principle can easily take hold. First, internal promotion is popular. And second, entry-level jobs tend to be technical in nature, for example, engineers in a software company, or administrators in local government.

Neither of these is necessarily a bad thing, but if they're combined with poor appraisal and promotion practices, they can doom their organization to mediocrity. We'll look at an example to see why.

Programmers make up the majority of entry level roles in software companies. These people have highly developed technical skills, developed during years of study of the subject, and pay great attention to detail. A successful programmer will usually, after an appropriate time, be offered a promotion. That's what tends to happen in a hierarchy, and the prospect of a career path is what attracts many people to entry-level jobs in these organizations.

Once our programmer becomes a Senior Engineer, he'll (let's say it's a "he") be dealing with more challenging projects. But he'll still be using the same skills, just at a more advanced level. So far, so good.

Then, the time comes for him to be promoted again, and this time he's made a manager, in charge of a team of programmers.

Here's where things can start to go wrong. While his knowledge of the company, its products and its clients mean that he's well placed to be managing a department, he may not have any of the "soft skills" needed to handle people, or liaise with other teams and senior management. His attention to detail and technical expertise are no longer useful to him either, with the result that his performance in this new role may be poor.

If he can't improve his soft skills, he'll never be promoted again. But because people are rarely demoted in a hierarchy, he'll remain at that level – his level of "incompetence" – doing a bad job. Not only will this make him unhappy, but the organization suffers too.

Taken to its extreme, many of the roles in the upper part of a hierarchical organization may be occupied by people who are not particularly good at their jobs.

The flip side of this concerns entry-level engineers who have good people skills, but perhaps have only average technical skills. These people will tend to receive only "acceptable" reports in their appraisals, leading them to be overlooked when there's a vacancy at the next level up the hierarchy. In these situations, the organization has missed an opportunity to promote a suitable person to the job, and these engineers will probably leave the company, frustrated at the lack of promotion.

Keeping the Peter Principle at Bay

There is something that organizations can do to stop the Peter Principle taking hold. This is to...

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