We’ve all had that one job where a coworker of ours gets a promotion to a new position rather unexpectedly. Perhaps there was a period of excitement or anticipation, but before long it becomes clear that they’re not suited for the job. They seem to feel overwhelmed or unprepared for the responsibilities they’re asked to do. This may come as a surprise since they performed so well in their previous role. In a way, it may seem like they got set up for failure by being promoted to a position that they did not have the skills or leadership abilities for. If you can recall a situation like that, then you’ve seen the Peter Principle in action.
The theory behind the Peter Principle is that people advance up the corporate track until they reach a point where they only display incompetence. It’s a situation every business wants to avoid.
So how do you know when to stop promoting someone? After all, every employee wants to rise up in their career and take on more responsibilities (with higher pay, of course). But are you really doing them a favor if you promote them to a new role where they won’t succeed? What good will it do them if you have to demote or even fire them?
As an employer, you should avoid this becoming a reality as much as possible. Not only will doing so help your company, but it will also benefit your employees. The result will be a happier and more productive work environment.
In this article, you’ll not only learn what the Peter Principle is, but you’ll also learn how to avoid experiencing it.
What Is the Peter Principle?
The Peter Principle refers to the idea that someone within an organization will continually get promoted, reaching higher levels of the company, until they reach a position where they experience leadership incompetence. In a sense, they are promoted until they can no longer do their jobs adequately. The end result would be lots of employees at the company who are actually incompetent at their jobs, thereby hurting the business.
Who Developed the Peter Principle?
The Peter Principle comes from Dr. Laurence J. Peter and his book appropriately titled The Peter Principle, which was released in 1968. The argument he makes is that excellent employees receive promotions until they reach a level that goes beyond their skills and talents. As Dr. Peter writes, “In a hierarchy, every employee tends to rise to his level of incompetence.” Dr. Peter’s book covers several key points:
- It’s easy for people, especially management, to recognize and reward competence.
- Greater responsibility, often as part of a promotion, is not something everyone is prepared for.
- Leadership incompetence tends to fly under the radar, making it hard to fire someone solely for lack of competence.
- Employees stay in their positions of incompetence longer than you might think.
- It is the fate of most workers to reach a point where they will no longer be good at what they do.
One important thing to point out is that Dr. Peter wrote it as a satirical take on corporate operations. He didn’t necessarily mean only team members who are incompetent need to apply for job promotions. Much of the book was based on his observations and not on hard data. The fact so many related to what he wrote indicated he hit on something true, but it wasn’t until decades later that researchers backed up Dr. Peter’s observations.
Research Says There’s Truth to the Peter Principle
For many decades, people treated this principle as just an old saying. Sure, you might rise to the level of your incompetence, but you should take care to avoid that situation. In 2018, however, researchers found some scientific evidence to back up the theory.
Professors Kelly Shue (Yale), Alan Benson (University of Minnesota), and Danielle Li (MIT) looked at the performance of more than 53,000 salespeople over a six-year period. They discovered that during that time, more than 1,500 of them became sales managers. As they studied their data, they found that while the best performers were promoted, they tended to do a very poor job as a manager. As Dr. Benson indicated, “To see that the best salespeople were becoming the worst sales managers was surprising.”
So, there is truth to it. Employees receive promotions based on current performance, but many end up being unable to perform their new roles well. With this fact in mind, companies must do what they can to avoid this potentially damaging business mistake.
How to Avoid the Peter Principle in Your Organization
Don’t get caught with team members who are incompetent in key roles. If you want your business to succeed, you need to make sure everyone is a good fit for their positions. Take a look at the following scenarios and learn how to avoid letting the Peter Principle become a reality in your organization.
The upper brass has just extended a promotion to you, and while the extra pay is good, you’re worried you’re going to flounder in your new role.
This is a common occurrence for many people, but just because you feel you might perform poorly doesn’t mean you will. Before starting in your new position, research what it takes to succeed. What kind of skills will you need? Reach out to those you know who are in similar positions to get their advice.
Also, don’t hesitate to contact those promoting you and let them know about your concerns. They might offer additional resources you can use that will ease your worries. There’s no shame in looking for more support when you need it.
Ultimately, if it’s the type of job you don’t feel like you would enjoy, you should turn it down. There’s nothing wrong with that. You don’t want to be in a job where your work motivation suffers. Other promotions will come along, likely for jobs you feel more comfortable doing. Management should greatly value your honesty and transparency.
As a new manager, you feel uncertain about how best to do your job. You’ve never had to manage people before, and you feel like the job is beyond you.
When you become a leader for the first time, you’ll need to work on developing your leadership skills. Identify which skills will be most useful for your job, and focus on those. Also, think of the style of leadership that suits you most, such as empathetic leadership. You want to stay true to who you are.
Talk to your new boss as well. Explain what you’re having problems with and find out if there’s anything they can do to help. They may offer special training programs and learning resources. Treat any feedback you receive seriously. After all, your bosses want to see you succeed as much as you do.
Just be patient with yourself, and allow yourself to grow into the role. If it’s a challenge at first, that doesn’t mean you can’t excel at it soon.
In your executive position, you need to hire someone in the company to lead the department. You want to make sure the person you do hire is the right fit.
Few things create more of a setback than making a wrong hiring decision. You want to get it right the first time and not spend money and time training someone who won’t do well.
When hiring from within, do your due diligence on each candidate. Note their skill sets and talents to determine if they would make for a good department head. Don’t just base your decision on past results. Not every excellent employee will make an excellent manager after all.
The interview process is crucial to making the right choice. Ask job interview questions that go beyond what they’ve accomplished and focus on what they hope to do in the future. Do they have a vision for the department they want to lead? Do they give solid answers to problem-solving questions, or do they share vague details?
Understand that not everyone will have all the necessary skills right from the start. But do they have the capacity to grow and develop? That will be vital for excellence in this role. Be real with them. Go over what challenges lie ahead. If they seem hesitant, dig at what might be bothering them. Doing so will help to uncover possible issues before they become gigantic problems.
As a new business owner, you want to make sure the first people you hire will help your new company grow into a massive success.
Your first hires are some of the most important ones you’ll ever make. To ensure they will help your company be successful now and in the future, you need to share your vision with them during the hiring process. Describe the core values you intend to establish.
Those who share similar core values and a similar belief in your mission will be enthusiastic about working for your company. If someone isn’t on the same page or is only there for a paycheck, that is a good indication that they won’t display excellence in their role. Additionally, being rewarded with a promotion is not something they’ll likely achieve.
You need to have a team that truly believes in what you’re doing. They’ll want to see the company succeed not just because it helps them but because it helps the world. Such employees will be able to grow in their respective roles and develop the needed skills to succeed, even if they don’t have them at first.
Setting Yourself and Your Team Up for Success
The goal should be to create an organizational structure and culture that ensures the Peter Principle doesn’t become a reality for your company. Many who show incompetence in their roles do so because they don’t know how to be leaders.
You have the ability to do everything possible to avoid this problem.
Give your team members the training they need to succeed. Guide them on how to become effective leaders today and transformational leaders tomorrow. Help them develop new skills so they can step into a management role with ease. All too often, people struggle when they take on a promotion to a manager role because they’ve never had the experience of managing people. Give them that opportunity before it encompasses their position in the company. Work to develop leaders at all levels.
You need to be intentional about your business culture and leadership development. Doing so will let people thrive and prepare themselves for new positions of responsibility. To get started, check out the following articles.
How to Build a Business Culture as an Executive Leader
Leadership Requires These Qualities of a Person