How to Avoid the Pitfalls of the Peter Principle

Reducing the Risk of Failure in Your Organization

How to Avoid the Pitfalls of the Peter Principle - Reducing the Risk of Failure in Your Organization

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Are you inadvertently setting your best people up for a fall?

Have you ever worked hard for a promotion, only to find that your new role wasn't really what you expected? Perhaps you felt unprepared for the duties and responsibilities that came with the new position, and your performance suffered.

Or, have you promoted your star team players, only to find that they are suddenly "out of their depth" and struggling to cope?

If either of these scenarios seems familiar, you may have unwittingly fallen victim to the Peter Principle. In this article, we explain what this means, how it can affect your business, and how to avoid it.

What Is the Peter Principle?

The Peter Principle was first identified by Dr Laurence J. Peter, a sociologist, lecturer and business consultant, in his 1968 book of the same name. It states, "In a hierarchy every employee tends to rise to his level of incompetence."

In other words, if you work in an organization with a top-down management structure and you are good at your job, you will likely be promoted until you reach one rung above your level of competence. Dr Peter called this level your "final placement."

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

In Figure 1 below, you can see a very simple representation of the Peter Principle. It shows a career path where your success is rewarded with advancement, until you are promoted above your level of competence and success is replaced by failure.

Figure 1: The Peter Principle

The Peter Principle


The Peter Principle in Action

Obviously, it's undesirable for someone who lacks competence to hold a position of responsibility in your team or business. He may be acutely aware that he's under-performing after thriving in previous roles, and he will likely feel confused, frustrated and anxious.

In extreme cases, the Peter Principle may result in company-wide mediocrity. Reduced productivity, morale and innovation follow, as more and more senior roles are taken by people who are ill-equipped for them.


Some people may be unaware that they lack the competency for their role. You can learn how to identify them, and help them to acquire the skills that they need, with our articles, The Dunning-Kruger Effect and The Conscious Competence Ladder.

Let's look at some of the features of a hierarchical organization that allow the Peter Principle to happen:

  1. Entry-level jobs are often technical or specialized. Programmers in a software company, for example, or administrators in local government.
  2. Internal promotion is common. People may be attracted to an organization not only by the nature of the work but also by the prospect of rapid career advancement.
  3. Promotion tends to be based on your performance in your current role, rather than your suitability for the next one.

Neither points one nor two above are necessarily bad things but, if they're combined with poor appraisal and promotion practices, things can go wrong.

For example, if you're promoted from engineer to senior engineer, your work may be more challenging but you're using the same skills. When you are promoted from senior engineer to manager, however, you may lack the "soft skills" needed for such a role.

These can include your ability to motivate team members, delegate tasks and responsibilities, communicate effectively, resolve conflict, and liaise with other teams and senior management. You can learn more about this in our article, Why Soft Skills Matter.

Avoiding the Peter Principle

How can you guard against the Peter Principle, or mitigate its effects? Let's look at three scenarios where it can come into play, and explore strategies to combat it.


Scenario 1: You are a hiring manager, and you want to be certain that you're promoting the right candidate.


If you're promoting from within your team or organization, make sure that you're choosing the person who's best suited for the role, rather than rewarding someone for past successes. You don't want to lose your best technician, only to gain a mediocre manager!

Use the Skills Matrix to evaluate your requirements, and then use competency-based interviewing to select the right candidate.

If you're hiring entry-level team members, look for candidates with good soft skills as well as the appropriate technical ones. They may have the potential to make better managers further down the line.

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Perhaps you could introduce an entry-level "management stream" in addition to a "technical stream." If you were to do this, consider how you could reward high-performing technical team members. For example, you could offer pay raises as their expertise increases, rather than offer promotion to a level that may not make use of their strengths and talents.


Promoting from within your team can be a good idea if you're looking to replace someone who is leaving, as the candidates will know the company, the people, and the team dynamics. But they will need the opportunity to develop the skills needed for the role.

You can find tips and strategies for a smooth transition, and for ensuring that any specialist knowledge is passed on, in our article, Succession Planning.

Scenario 2: You're in a new, more senior role, and you feel "out of your depth."


It's natural to have a few doubts and anxieties in a more challenging role. It doesn't necessarily mean that you are the wrong person for it, or that you won't grow into it with proper support and training.

Start by identifying any new skills that you need to learn. Our articles, Understanding Developmental Needs and Training Needs Assessments, can help with this.

Ask your manager for feedback on your performance, and use the Feedback Matrix to evaluate which of your skills need improving. Coaching or training may be available – speak to your HR department to find out.

If you've considered your situation carefully, and you're still convinced that you've advanced beyond your level of competence, then talk to your manager. It might be possible to return to your previous job, or to move sideways into a similar role in a different department. But be aware that you may lose some or all of the benefits that came with the promotion.

Most importantly, take control of your situation, and remember that you can ask for help while preserving your reputation. It's better for everyone if you can admit that the promotion didn't work out as you or the organization had hoped.


For more advice on making the transition into management, read our article, From Technical Expert to Manager.

Scenario 3. You have been offered a promotion, but you are not sure that you have the necessary skills.


It's not easy to turn down a promotion! But before you accept one, think carefully about what is most important to you. Is it salary and status, or doing a job that you are good at and that you enjoy? Our article, What Are Your Values?, can help you to explore this.

Research the role and find out what is involved. For example, talk to other people in similar positions, and use your interview to find out what new skills you'd need to do the job effectively. Consider carefully whether you are really motivated to learn those skills. Also, are you prepared to manage your former peers?

If the role isn't right for you, there's no shame in turning it down. In fact, you may be doing yourself and your organization a favor. Concentrate on your strengths, and you will find more fulfilling ways to advance your career and contribute to your company's success.


There is evidence to suggest that women are more likely than men to work in positions below their level of competence. This phenomenon has been called "The Paula Principle" by researcher and author Tom Schuller.

He cites several reasons for this, including discrimination, the challenge of Combining Parenthood and Work, and positive choices based around work-life balance. We discuss this situation in detail with Schuller in our Expert Interview.

Key Points

The Peter Principle states that, if you perform well in your job, you will likely be promoted to the next level of your organization's hierarchy. You will continue to rise up the ladder until you reach the point where you can no longer perform well.

This will likely leave you frustrated and unhappy, and it may impact morale and productivity in your company.

You can mitigate the Peter Principle's effects in your organization with good recruitment, support and training.

If you are in a position where you feel "out of your depth," take control as soon as possible. Talk to your HR department, and seek feedback, training or coaching.

This site teaches you the skills you need for a happy and successful career; and this is just one of many tools and resources that you'll find here at Mind Tools. Subscribe to our free newsletter, or join the Mind Tools Club and really supercharge your career!

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Comments (17)
  • Over a month ago charlieswift wrote
    The Peter Principle is often presented as the outcome of an arrogant, oblivious attitude held by a now-failing manager, who has simply and foolishly overstretched him- or her- (but usually him) self. In fact, it is often the consequence of an individual and their employer wishing to continue building on past success and taking what seems the natural next move. Read this latest version of our article to find out what you can do to prevent or if necessary survive such a calamity. And look out for our forthcoming Expert Interview on The Paula Principle - a little different from the Paul Principle proposed below! - Charlie Swift and the MT editorial team.
  • Over a month ago Dianna wrote
    Great ideas and valid observations here!!!

    I think you all might be interested in this recent conversation on Expert Power ( http://www.mindtools.com/forums/viewtopic.php?t=714). It sheds a different light on the competency issues brought up here.

  • Over a month ago weeze wrote
    The company I work in have obviously thought about the Peter Principle and have put in place something called the science ladder. This rewards people who are experts in their field, but would be completely disaserous if they were promoted up the managerial ladder. The only difficulty is that you have to be a real expert in something, almost to the point of being a boffin to get onto the ladder, so the pcinciple is good, but it's not applied as well as it could be

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