Understanding the Peter Principle: What It Is and How to Recognize It

An ape demonstrating the Peter Principle

An ape demonstrating the Peter Principle

Samantha had always been a standout employee at her company. She worked hard and consistently exceeded expectations, and it wasn’t long before she was promoted to management. However, despite her best efforts, Samantha struggled in her new role.

She found it difficult to delegate tasks and often micromanaged her team, causing tension and frustration among her employees. Despite her problems, Samantha refused to ask for help or admit that she might not be cut out for the role. She was simply used to always being the best in every work situation.

Eventually, her performance suffered and she ended up being fired. The news devastated Samantha, who felt like she had let everyone down and failed at her dream of becoming a successful manager. She scrambled to pick up the pieces and move on, feeling defeated and uncertain about her future.

Samantha was a classic case of the Peter Principle in action.

What is the Peter Principle?

The Peter Principle is a theory stating people in a hierarchy tend to rise to their “level of incompetence,” meaning they’re promoted until they reach a job they aren’t capable of doing well.

Take the example of Samantha above, she was great at her first job, worked hard to get a promotion, and then sucked at the new job so much it ended up in her dismissal. According to the Peter Principle, this person has been promoted to their “level of incompetence,” because they are no longer able to do their job as well as they used to, or even far worse.

Essentially, people will continue to be promoted until they reach a job that they can’t do well, and then they’ll stay there because they can’t be promoted for good performance anymore.

Who Invented the Peter Principle?

The Peter Principle was first described by Dr. Laurence J. Peter and Raymond Hull in their book “The Peter Principle: Why Things Always Go Wrong,” published in 1969.

Dr. Peter was a Canadian educator who came up with the idea after observing that people in organizations often seemed to get promoted to higher positions even if they weren’t necessarily the best fit for the job. He called this phenomenon the “Peter Principle,” and he argued that it was a major problem in the way that companies were run.

While the idea was somewhat sound, Peter teamed up with Hull to write the book as light-hearted form of quasi-satire. Even his evidence for the book came from something called the “Hypothetical Case File”, which included employees going by the names of Mr. Eclipse, Mrs. Cylinder, and other quirky identities.

“Look around you where you work, and pick out the people who have reached their level of incompetence. You will see that in every hierarchy the cream rises until it sours.” – Dr. Laurence J. Peter

The book clearly struck a nerve, even though Peter was open about it being satirical and fun-natured, it sold over a million copies, hit the bestseller lists in the US for half a year, and spurred studies on the subject even decades later.

Why Does the Peter Principle Occur?

Even though it’s technically not a principle (more of a theory), studies have pointed out its validity. One study saw three professors analyze over 50,000 salespeople’s performance at 214 companies during a 7-year period. By the end, just under 3% of those staff received a promotion to sales managers.

And if you’ve read this far, you can probably guess their results. According to the data, the best salespeople were both promoted far more often and performed badly once they became managers. The skills that made them great salespeople weren’t the skills needed to be great sales managers.

Their conclusion?

The companies would’ve been far better off if they had hired based on skills expected in the new position, rather than the staff’s performance in the old one.

Another group of researchers used an advanced model to simulate how a company’s hierarchy would look like if the Peter Principle was true. Their surprising (and hilariously sardonic) results showed the best ways to improve efficiency in such an organization were simple:

  1. Promote people completely at random
  2. or take the best and worst performers in each group, then promote one of them at random

This fun but somewhat eye-opening study even won them an Ig Nobel prize in 2010. Their later studies into what makes people successful showed that rather than talent and hard work, pure luck is the main culprit.

And it won them yet another Ig Nobel prize!

How Can People Stop the Peter Principle?

Dr. Peter didn’t just point out the problems of top-down management hierarchies, he also proposed solutions! And depending on how you want to take it, they may or may not have been entirely in jest, too.

He had a few potential solutions to the Peter Principle:

  • Demote the now-underperforming staff back to their initial position, as long as the boss who promoted them admits they made a mistake (now that’s funny).
  • Simply move incompetent employees to another, less important, position with a far longer title. A phrase he termed “Lateral Arabesque.”
  • Actively try to not be promoted, and thus achieve “Creative Incompetence, where an employee actively pretends to be stupid since they realized they’re in the perfect job for their skill sets. An example was given as parking in your boss’s reserved spot as a “mistake”.

But really, if companies want to avoid the Peter Principle in their workforce, there aren’t many easy options.

First, it can’t be a completely top-down hierarchy. And if you’ve ever worked in such an organization, you’ll know there’s a fat chance of that ever changing. Another easier solution is to promote for the role and not based on past experience in a different role, at least not entirely. Or you could simply reward employees with more money than they’d expect to get and never put an artificial cap on it — thus motivating them to not seek a promotion that may not suit their personality.

For the employees themselves, it might take a bit more work. Getting honestly assessed by third parties (bosses, co-workers, friends) on what you’re good and bad at can help point you in the right direction in terms of both what is feasible to improve on and what roles might not suit you.

All in all, the Peter Principle is a fun, if not completely true, aspect of many organizations around the world. I just love that it started in a place of jest and become something far more serious, at least to those in management science.

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