Peter principle
The Peter Principle is a fundamental principle of hierarchiology that pertains to the level of competence of the human resources in a hierarchical organization.
| In a hierarchy every employee tends to rise to his level of incompetence. |
Formulated by Dr. Laurence J. Peter in his 1968 book The Peter Principle, the principle explains the upward, downward, and lateral movement of personnel within a hierarchically organized system of ranks. On a personal level, the practical application of the Peter Principle is that it allows to assess the potential of any given employee for a promotion to a higher rank on the basis of job performace in his or her current position. It states that members of a hierarchical organization are eventually promoted to their highest level of competence, after which further promotion raises them to a level at which they may become incompetent. Such a level is called the employee's level of incompetence', at which the employee has a dismal or no chance at all of being promoted any farther, thus achieving the ceiling of his career growth within a given organization.
The employee's incompetence is not necessarily exposed as a result of the higher-ranking position being "more difficult" — it may be simply that the position is different from the position in which the employee previously excelled, and thus requires different skills, which the employee may not possess. An example used by Peter involves a factory worker whose excellence at his work results in him being promoted into a management position, in which the skills that got him promoted in the first place are no longer of any use and even prevent the employee from successfully performing his duties as a manager.
One way that organizations attempt to avoid this effect is to refrain from promoting a person until that person already shows the skills or habits necessary to succeed at the next higher position. Thus, a person is not promoted to manage others if he or she does not already display management abilities. The corollary of this is that employees who are dedicated to their current jobs will not be promoted for their efforts, but might get a pay raise instead.
One complication is that competent employees will often pretend to be incompetent. The simplest reasons for this might be to avoid the jealousy of coworkers and/or to annoy managers. A more complex reason would be to avoid being promoted to a management position. (This is especially common in industries such as big box retail chains where managers' base pay is rather low, and where they are "exempt" employees who are not entitled to overtime pay.) Companies which practice performance improvement techniques often find that employees will deliberately leave room for improvement by starting out at less than peak effectiveness and only ramping up to full productivity later. Employees will also deliberately underperform in order to keep quotas and other expectations from being set too high.
The implication of the Peter Principle for an organization as a whole is that the organization is prone to collapse when the number of incompetents among its ranks reaches a critical mass, resulting in the inability of the organization to perform its functions.
Although written in a lighthearted manner, the Peter's book contains many real-world examples and thought-provoking explanations of human behaviour. Similar observations on incompetence can be found in the Dilbert cartoon series (such as The Dilbert Principle). In 1981 Avalon Hill made a board game on the topic titled "The Peter Principle Game." [1]
See also
- The Dilbert Principle
- The pleasure principle
- Management
- Parkinson's law
- Negative selection
- List of human resource management topics
- Adages named after people
- Software Peter principle
References
- Dr. Laurence J. Peter (1969). The Peter Principle: why things always go wrong. New York: William Morrow & Company, Inc. pp. 179 pages.
{{cite book}}: Unknown parameter|coauthors=ignored (|author=suggested) (help) - Dr. Laurence J. Peter (1970). The Peter Principle. Pan Books. ISBN 0-330-02519-8.
{{cite book}}: Unknown parameter|coauthors=ignored (|author=suggested) (help) - Lazear, E. (2001). "The Peter Principle: Promotions and Declining Productivity". Working Paper 8094. NBER.