Peter Principle

For the BBC sitcom, see The Peter Principle (TV series).

The Peter Principle states that "in a hierarchy every employee tends to rise to his level of incompetence", meaning that employees tend to be promoted until they reach a position at which they cannot work competently. It was formulated by Dr. Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous ^[1] treatise which also introduced the "salutary science of hierarchiology."

The principle holds that in a hierarchy, members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer competent (their "level of incompetence"), and there they remain, being unable to earn further promotions. Peter's Corollary states that "in time, every post tends to be occupied by an employee who is incompetent to carry out their duties" and adds that "work is accomplished by those employees who have not yet reached their level of incompetence." "Managing upward" is the concept of a subordinate finding ways to subtly "manage" superiors in order to limit the damage that they end up doing.

This principle can be modeled and has theoretical validity for simulations.^[2] However, there has been no large-scale statistical verification of the Peter Principle, and most evidence given for the axiom is intended to be humorous and is usually anecdotal.

Overview

The Peter Principle is a special case of a ubiquitous observation: Anything that works will be used in progressively more challenging applications until it fails. This is "The Generalized Peter Principle". It was observed by Dr. William R. Corcoran in his work on corrective action programs at nuclear power plants. He observed it applied to hardware, e.g., vacuum cleaners as aspirators, and to administrative devices, such as the "Safety Evaluations" used for managing change. There is much temptation to use what has worked before, even when it may exceed its effective scope. Dr. Peter observed this about humans.

In an organizational structure, the Peter Principle's practical application allows assessment of the potential of an employee for a promotion based on performance in the current job; i.e., members of an hierarchical organization eventually are promoted to their highest level of competence, after which further promotion raises them to incompetence. That level is the employee's "level of incompetence" where the employee has no chance of further promotion, thus reaching their career's ceiling in an organization.

The employee's incompetence is not necessarily a result of the higher-ranking position being more difficult. It may be that the new position requires different work skills which the employee may not possess. For example, an engineer with great technical skill might get promoted to project manager, only to discover he lacks the interpersonal skills required to lead a team.

Thus, "work is accomplished by those employees who have not yet reached their level of incompetence."

In addition, Peter suggested the idea of “Super-Competence” in an inappropriately low position. *See ‘caste’ under Solutions* He proposed that this employee will have two paths dependent upon their leadership. Competent People Managers will promote this employee for the betterment of the company. Incompetent People Managers will most likely feel intimidated and/or threatened by this employee. This employee is a disruption to their perceived natural order and will almost certainly drive them to set this employee up for failure and/or dismiss them. Organizations with poor leadership cannot handle this type of disruption to their hierarchical structure. A Super-Competent employee “…violates the first commandment of hierarchical life with incompetent leadership: [namely that] the hierarchy must be preserved…”

Solutions

There are methods organizations can use to mitigate the risk associated with the Peter Principle. However, the implementation of such methods must be applied at all levels in order for them to be effective.

One way that organizations can avoid this effect is by having an "up or out" policy that requires termination of an employee who fails to attain a promotion after a certain amount of time. Example: A people manager is able to handle the vast majority of his or her current job responsibilities, but does not reveal the skill set necessary for promotion. The people manager possesses the potential to cause harm within the company, by way of preventing those beneath them with higher potential from moving up, as well as lowering morale once such employees become aware of this fact. The United States Military, for instance, requires that certain ranks be held for no longer than a set amount of time, a lack of compliance with which could render grounds for dismissal.^[3]

Another method is to refrain from promoting a worker until they show the skills and work habits needed to succeed at the next higher job. Thus, a worker is not promoted to managing others if they do not already display management abilities.

• The first corollary is that employees who are dedicated to their current jobs should not be promoted for their efforts (as in The Dilbert Principle), and instead should be rewarded with, say, a pay raise, while remaining in their current position.
• The second corollary is that employees might be promoted only after being sufficiently trained to the new position. This places the burden of discovering individuals with poor managerial capabilities before (as opposed to after) they are promoted.

Peter states that a class, or caste (social stratification) system is more efficient at avoiding incompetence. Lower-level competent workers will not be promoted above their level of competence as the higher jobs are reserved for members of a higher class. "The prospect of starting near the top of the pyramid will attract to the hierarchy a group of brilliant [higher class] employees who would never have come there at all if they had been forced to start at the bottom". Thus he concludes that the hierarchies "are more efficient than those of a classless or egalitarian society" .

In a similar vein, some real-life organizations recognize that technical people may be very valuable for their skills but poor managers, and so provide parallel career paths allowing a good technical person to acquire pay and status reserved for management in most organizations.

Alessandro Pluchino, Andrea Rapisarda and Cesare Garofalo used an agent-based modelling approach to simulate the promotion of employees and tested alternative strategies. Although counter-intuitive, they found that the best way to improve efficiency in an enterprise is to promote people randomly, or to shortlist the best and the worst performer in a given group, from which the person to be promoted is then selected randomly.^[2] This work won the 2010 Ig Nobel Prize in management science.^[4]

Another technique for overcoming the effects of the Peter Principle can be found in the use of contractors (for example in the IT industry). IT contractors are selected for their relevant experience, supported by recent references, and are usually taken on for short periods (up to 6 months at a time, with renewals if competent). If incompetence is detected, they can be easily laid off (e.g. by simply not renewing their contract).

The contractor is not a part of the hierarchy, is not usually eligible for promotion, and is well remunerated and thus content with the contracted position, as well as being under pressure to perform to ensure continued employment.

Hierarchiology

Along with the Peter Principle, Dr. Peter also coined "hierarchiology" as the social science concerned with the basic principles of hierarchically organized systems in the human society.

Having formulated the Principle, I discovered that I had inadvertently founded a new science, hierarchiology, the study of hierarchies. The term hierarchy was originally used to describe the system of church government by priests graded into ranks. The contemporary meaning includes any organization whose members or employees are arranged in order of rank, grade or class. Hierarchiology, although a relatively recent discipline, appears to have great applicability to the fields of public and private administration.

—Dr. Laurence J. Peter and Raymond Hull, The Peter Principle: Why Things Always Go Wrong

Impact on popular culture

Although humorous, Peter's book contains many real-world examples and thought-provoking explanations of human behavior. For example, he pointed out that Adolf Hitler was a consummate and superb politician due especially to his charisma and oratorical skills but reached his "level of incompetence" as commander-in-chief of the Wehrmacht because of the rigidity of his decision making (not allowing retreats when necessary according to the tactical situation). Similar observations on incompetence can be found in the Dilbert cartoon series (such as The Dilbert Principle), the movie Office Space, and the television shows The Office and 30 Rock. In particular, the Dilbert Principle seems to be an extension of the Peter Principle. According to the Peter Principle, the subject has been competent at some job in his past. The Dilbert Principle attempts to explain how a person who has never been competent at anything at any point in time can still be promoted into management.

In 1981 Avalon Hill made a board game on the topic titled The Peter Principle Game.

In April 2009, it was announced that the book would be re-issued in honor of its 40th anniversary.^[5]

Earlier version

The same experience was described as early as 1767 by Gotthold Ephraim Lessing in his comedy Minna von Barnhelm (3, 7): “Mehr als Wachtmeister zu werden? Daran denke ich nicht. Ich bin ein guter Wachtmeister und dürfte leicht ein schlechter Rittmeister und sicherlich noch ein schlechtrer General werden. Die Erfahrung hat man.”^[6]

Translated from German to English: “To become more than a sergeant? I don't consider it. I am a good sergeant; I might easily make a bad captain, and certainly a worse general. People have had this experience.”

See also

• Dunning–Kruger effect
• Negative selection (politics)
• List of eponymous laws
• Parkinson's law
• Software Peter principle
• Systemantics

References

1. ^ http://www.amazon.com/Peter-Principle-Things-Always-Wrong/dp/B000OEG5T2
2. ^ ^{a b} Alessandro Pluchino; Andrea Rapisarda; Cesare Garofalo (2009). "The Peter Principle Revisited: A Computational Study". Physica A 389 (3): 467–472. arXiv:0907.0455. Bibcode 2010PhyA..389..467P. doi:10.1016/j.physa.2009.09.045. 
3. ^ Bernard Rostker, et. al. (1992) (PDF). The Defense Officer Personnel Management Act of 1980 - A Retrospective Assessment. ISBN 0833012878. http://www.rand.org/pubs/reports/2006/R4246.pdf. 
4. ^ Anonymous (2010). "The 2010 Ig Nobel Prize Winners" (PDF). Annals of Improbable Research 16 (6): 10–13. http://improbable.com/airchives/paperair/volume16/v16i6/AIR_16-6_screen.pdf. 
5. ^ http://www.msnbc.msn.com/id/30091642/
6. ^ http://www.gutenberg.org/dirs/etext05/7mnbh10.txt

Bibliography

• Peter, Laurence J; Hull, Raymond (1969). The Peter Principle: Why Things Always Go Wrong. New York: William Morrow and Company. ISBN 0688275443. OCLC 1038496.  WorldCat lists 24 editions.
• Lazear, Edward P (2000-10-12). "The Peter Principle: Promotions and Declining Productivity" (PDF). Hoover Institution and Graduate School of Business, Stanford University. http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf. 
• Pluchino, Alessandro; et al.. "The Peter Principle Revisited: A Computational Study". arXiv:0907.0455. 

External links

• The Peter Principle : Work Poems A series of 52 poems completed before or shortly after going to work. All embody the spirit of The Peter Principle, and appropriate contempt for it.
• Peter Parkinson's Principles Satirical principles for promotion beyond the level of incompetence.
• The Nartreb Principle
• A Glossary of Incompetence Time Magazine, Friday, Mar. 28, 1969.
• Peter Principle in Poker