The Peter Principle of the thing

Okay, the Peter Principle, that each person in an organization is promoted to their level of incompetence, is legendary. Since it was first advanced by Lawrence J. Peter in the 1960s, it’s been one of those things that is spoken about amusingly but with a certain element of “yeah, right.” (which is, I believe, the only example of a double-positive making a negative, but I digress.)

Well, if you’ve ever wondered if the Peter Principle works, it turns out that it does. This year’s management Ignoble Prize went to The Peter Principle: A Computational Study. The researchers found that not only does it work, it’s potentially unavoidable if ones duties following a promotion are essentially unrelated to ones duties before the promotion. In other words, the skills of an engineering manager are not identical to those of an engineer. Being a good salesmanager is not the same as being a good salesman, and so on. The study went on to state that organizations could improve their efficiency by promoting randomly the most and least competent performers!

Looking at this study, I’m struck by the basic assumption underlying it: the principle works if the duties as you move up are substantially different from what they were at the “lower” level. Unfortunately, this is a pretty valid assumption. There is a cultural belief in most businesses that management is “higher” on the corporate ladder than being an individual contributor. As a result, if you really want to increase your salary and status in the company, you need to keep climbing. Unfortunately, this means that there’s a very good chance that eventually you’ll reach the point that you can’t do the job well anymore, and hence you’ll be stuck in a job that doesn’t fit your skills and talents.

It’s a very perverse incentive!

It occurs to me that instead of insisting on the ladder or believing that doing well at job X means that you’ll do well at job(not x), perhaps a better approach might be to give people the opportunity to try out a new job. Providing some sort of training for the new job is also a good idea. It’s rather disturbing how often people are “promoted” into management and then given no training on what to do. In a perfect example of the Peter Principle, they are taken out of the job that they excel in and for which they probably trained for many years, and put into a job for which they have no training and possibly no talent. The former, at least, can be fixed.

Of course, even when there is management training, it has to be done right. The occasional one-off, soon forgotten until the next year, is hardly sufficient. Consider how much training it probably took for the person to be successful in their previous job! Management training needs to be focused, given the reality of time constraints that exist in most businesses, and it also needs followup. Waiting a year until the next training won’t do it!

It takes a lot of effort to avoid the Peter Principle. I suspect that many businesses are figuring they can’t afford to do anything about it. My question is, can they afford not to?

Comments (1)

Bharathi Baskar.BApril 7th, 2015 at 2:30 am

Thanks For Your valuable posting, it was very informative. Am working inErp Software Company In India

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