The Peter Principle and How to Beat It

Executive
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In the 1969 book The Peter Principle, authors Dr. Laurence J. Peter and Raymond Hull wrote that workers in a hierarchical structure get promoted to the level at which they are incompetent and stay at that level for the rest of their careers.

Logically, this means that virtually all managers are is incompetent. If they weren't incompetent, they wouldn't be where they are.

There is ample evidence to support the Peter principle, but that doesn't mean it has to happen to you.

Peter Principle Logic

This now-famous theory suggests that people who do good jobs are rewarded with promotions to the next level up. Each of those who perform well at that higher level is rewarded with another promotion. This process continues until each person gets a job that he or she just isn't competent to do. None of them now deserve a promotion, so all of them stay in jobs at which they are incompetent. All of them are one level above jobs they can do well.

While this phenomenon is clearly observable in many cases, it is not always accurate.

  • An individual may not be promoted because there is no opening. Example: two senior research scientists are peers and about equal in age, experience, and talent. One is promoted to department manager. The other has to wait a couple of years until a similar position opens.
  • An individual may choose to step down a level. Many excellent salespeople get promoted to management only to discover that they don't like management. They step back into the sales jobs at which they were competent and successful.
  • An individual may lack the skills for the new job but works hard to develop those skills. Such people may have been classic Peter principle examples, but they are no longer.

How to Beat The Peter Principle

It's easy to see how the Peter principle took hold in the world of American business. The corporate world thrives on the competition among individuals for personal achievement, recognition, and promotion. But the pressure to move upwards has its perils.

As the classic book notes, victims of the Peter principle generally stay at their level of incompetence until they retire. They don't usually get fired. But they're usually miserable. So is everyone around them. Obviously, this is not good for business.

Smart executives look for ways to beat the Peter principle. There are three ways to do it: Promote better, train better, and, as a last resort, demote.

Demotion may sound harsh, but it is often the only way to deal with the problem. And it can be a win-win situation because people who have risen to incompetence are not usually happy to be there.

Inverse Promotion

Then again, demotion can be humiliating. That is where the notion of inverse promotion kicks in.

This practice developed directly as a result of the Peter principle. It assumes that the person to be demoted is a valued employee who has simply wound up in the wrong job. The person is transferred to a new job, often in a different department, that may be a lower level position but doesn't have an obviously lower job title.

This does more than save face. A pay cut can usually be avoided since salary levels often have wide overlaps. Ideally, the person also has been given the right job this time.

The Training Option

Additional training and mentoring may give a Peter principle victim the tools needed to succeed. The word "victim" is deliberate. Why wasn't this training available before the promotion?

Marcia Reynolds, author of Wander Woman: How High-Achieving Women Find Contentment and Direction claims that you can't "...really measure the truth of the Peter principle without analyzing the training the person has had for the position they have moved into, especially if it's a promotion."

Every promotion entails new tasks, responsibilities, and perspectives. Many Peter principle examples might be competent if given a fair chance.

The Bottom Line

Before you give up employees who appear to be walking examples of the Peter Principle, make sure you've done everything you can to help them succeed at their new level. Training, mentoring, and good leadership may be all they need to become competent.