Peter Principle
A concept based on the book "The Peter Principle: Why Things Always Go Wrong" written by Dr. Laurence J. Peter and Raymond Hull in 1969
What Is the Peter Principle?
The Peter principle is a concept based on the book "The Peter Principle: Why Things Always Go Wrong" written by Dr. Laurence J. Peter and Raymond Hull in 1969.
After researching how companies promote employees, Dr. Peter concluded that employees tend to be promoted from a position they are competent in into a position they are incompetent.
The principle is also referred to as the “climbing up” theory.
The concept is ubiquitous in real life, a world-class football player retires, and the club he holds dear offers him a position in management, resulting in inaction; a competent director in a private equity firm is promoted to incompetent managing director.
For an organization, once a considerable number of workers are promoted to incompetent levels, it will cause the organization to be overstaffed and inefficient, resulting in mediocre people getting ahead and stagnant development.
A recent example, Google recently announced that there would be fewer promotions into senior roles “to ensure that the number of Googlers in more senior and leadership roles grows in proportion to the growth of the company.”
Promoting an employee to a position where he cannot exert his talents well is not only not a reward for himself but also makes him unable to exert his talents well and brings losses to the organization.
Peter’s Principle is based on a paradoxical idea.
The employees will continue to be promoted, but at some point, they will be promoted to positions where they are incompetent. Then they will remain in those positions because they do not demonstrate any further ability to receive additional boost recognition.
After reviewing this article, you will understand the following content:
- The Peter Principle holds that employees move up the corporate hierarchy through promotions until they reach their respective levels of incompetence.
- Therefore, according to the Peter Principle, in a given hierarchy, employees who are not competent for the responsibilities of their respective positions will eventually fill each position.
- One possible solution to the problems raised by the Peter Principle is for companies to provide adequate skills training for promoted employees, ensuring that the training is appropriate for the newly promoted positions.
Key Takeaways
- The Peter Principle states that employees tend to be promoted to positions they are incompetent for.
- It can lead an organization to be overstaffed and inefficient.
- It leads to a reduction in employee morale and productivity.
- The principle is based on the idea that employees are promoted for their current competence but, eventually, reach a level where they are no longer competent.
- Proper skills training for promoted employees can help minimize the costs associated with incompetence.
- The principle is a psychological effect of management psychology and is related to the phenomenon of redundancy in hierarchical organizations.
Understanding the Peter Principle
The Peter Principle is exactly what Peter derived from his analysis of thousands of instances of incompetent failures in organizations.
Its specific content is: "In a hierarchical system, each employee tends to rise to a position where he is incompetent."
Peter pointed out that each employee will be promoted to a higher level because of his good performance in their current competitive position. After that, if he continues to be competent, he will be further promoted until he reaches the position he is not competent for.
Peter's inference from this is that "every position will eventually be occupied by an employee who is incompetent for the job. Hierarchical organization tasks are mostly performed by employees who have not yet reached the incompetent class."
Every employee eventually reaches Peter’s Plateau, where his Promotion Quotient (PQ) is zero.
Note
Peter’s Plateau is where a person has reached their competence potential, and it is not entitled to be promoted from a competent position to an incompetent position.
As for accelerating the ascension to this high ground, there are two methods:
- The "pull" from above, i.e., pulling from above by relying on nepotism and acquaintances.
- The "push" of the self, i.e., self-training and progress, etc., and the former is widely adopted.
Peter believes that due to the introduction of Peter's principle, he "unintentionally" created a new science - Hierarchy Biology. Hierarchy biology is the key to unlocking the mysteries of all hierarchies and, therefore, understanding the structure of civilization as a whole.
Everyone in business, industry, politics, administration, military, religion, and education is closely related to hierarchical organization and controlled by the Peter Principle.
The cost of the Peter Principle
The Peter Principle causes high costs to an organization. Incompetent or improperly trained employees are promoted to positions where they cannot perform effectively, resulting in obvious costs.
This makes the employee unhappy and unproductive, impacting the organization's general productivity.
As an increasing number of employees are promoted beyond their current level of competence, the organization becomes overstaffed and inefficient. Incompetent employees require additional training or resources to complete tasks, making it costly for the organization.
This leads to mediocre employees getting ahead and stagnating the company's development, ultimately hindering its growth and success. Moreover, the Peter Principle negatively impacts employee morale.
Competent employees may become disheartened and unmotivated when they see their less-skilled peers being promoted beyond their level of competence, creating a toxic work environment and decreasing employee retention.
Organizations may spend time and resources trying to fix the problem, for example, investing funds in training resources to develop the skills their employees need in their new roles. They can also hire external consultants to identify the problem and possible solutions.
To address this issue, organizations can provide proper skills training for promoted employees. This ensures that the training is appropriate for the positions they are promoted to, helping them develop the necessary skills to succeed in their new roles and minimizing the costs associated with incompetence.
The Logic Behind the Peter Principle
Peter's principle is a psychological effect of management psychology, which means that in a hierarchical system, each employee tends to rise to a position where he is not competent.
Northwood Parkinson (C. N. Parkinson) is a famous social theorist who has carefully observed and interestingly described the phenomenon of redundancy in hierarchical organizations.
He hypothesized that senior executives in an organization use a strategy of differentiation and conquest, deliberately making the organization less efficient to increase their power, a phenomenon Parkinson called "climbing the pyramid."
Peter argues that this theoretical design is flawed, and the reason he gives to explain the phenomenon of employee churn is the genuine (albeit futile) pursuit of efficiency by senior executives in hierarchical organizations.
As the Peter Principle shows, many or most executives must have reached their level of incompetence. These people can't improve the current situation because all the employees have done their best, so to increase efficiency, they have to hire more employees.
Adding staff may temporarily increase efficiency, but these recruits will eventually reach the incompetent level due to the promotion process.
Therefore, the only way to improve is to increase the number of employees again, gain temporary efficiency again, and then gradually increase attributed to inefficiency. But, this puts more people in the organization than is actually needed for the job.
Influences
The Peter Principle solves the mystery of all hierarchies. Peter's principle exists in all levels of institutional organization, such as business, industry, politics, administration, military, religion, and education.
Nowhere is this more obvious than in the current personnel systems of governments regarding the appointment of cadres and the government's current civil service system.
It is clearly stated that a position promoted to a certain level must serve for a certain number of years in the next-level position and be promoted step by step, and the selection range should be placed in the smallest circle.
However, this approach leads to the final result derived from the Peter Principle: most leadership positions are filled by incompetent people due to their promotion beyond their level of competence.
This yields a system where the least competent people are promoted to the highest levels and are responsible for making critical decisions that affect the organization as a whole.
The Peter Principle highlights the need for organizations to have a more effective and objective system of identifying and promoting competent individuals rather than relying on subjective criteria or seniority-based systems.
Ways to Prevent the Peter Principle
In his book, Dr. Peter described the phenomenon and suggested avoiding this issue. Here are some potential solutions for the Peter Principle based on Dr. Peter's suggestions:
1. Promotions
Promotion should be based on the skills for the future role rather than past performance.
For example, a programmer may have to brush up on his public speaking skills before moving on to a new role requiring public speaking.
2. Training and Development
Organizations should offer training and development programs to help employees improve their current skills. Such programs include mentorship programs, coaching, and workshops.
3. Clear job description
Companies should lay out a clear job description and expectations for each role; therefore, the employees can understand what is required of them. Thus, preventing employees from being promoted to roles they are not qualified for.
4. Open communication
Managers should encourage honest employee feedback about their performance and development needs.
Open communication helps to identify potential issues before they become major problems and allows for targeted training and development.
5. Continuous learning
Lastly, organizations should establish a culture of continuous learning, where employees are encouraged to hone their skills and knowledge continually.
Continuous learning can include providing access to online courses, conferences, and other learning opportunities.
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