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{{Short description|Management concept by Laurence J. Peter}}
{{For|the BBC sitcom|The Peter Principle (TV series)}}
{{Other uses}}
{{No footnotes|date=February 2011}}
{{Use mdy dates|date=April 2015}}
The '''Peter Principle''' is the farcical idea that "in a hierarchy every employee tends to rise to his level of incompetence", meaning that ]s tend to be ] until they reach a position at which they cannot work ]. It was formulated by Dr. ] and ] in their 1969 book ''The Peter Principle'', a humorous treatise which also introduced the "salutary science of hierarchiology."
]


The '''Peter principle''' is a concept in ] developed by ] which observes that people in a ] tend to rise to "a level of respective incompetence": employees are promoted based on their success in previous jobs until they reach a level at which they are no longer ], as skills in one job do not necessarily translate to another.<ref name=skprez>{{cite news |url=https://news.google.com/newspapers?id=Xa1fAAAAIBAJ&sjid=0DIMAAAAIBAJ&pg=2914%2C3242820 |work=Lewiston Morning Tribune |location=(Idaho) |last=Flynn |first=Dan |title= Peter of the incompetency principle speaks of presidents, now and soon |date=November 8, 1980 |page=2B}}</ref><ref name=":0">{{Cite web|last=Hayes|first=Adam|date=Aug 21, 2020|title=Peter Principle: What You Need to Know|url=https://www.investopedia.com/terms/p/peter-principle.asp|access-date=2021-03-17|website=Investopedia|language=en}}</ref>
The principle holds that in a ], members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer ] (their "level of incompetence"), and there they remain, being unable to earn further promotions. This principle can be modelled and has theoretical validity for simulations.<ref name=Pluchino>{{cite journal |author1=Alessandro Pluchino |author2=Andrea Rapisarda |author3=Cesare Garofalo |journal=] |volume=389 |title=The Peter Principle Revisited: A Computational Study |issue=3 |pages=467–472 |year=2009 |arxiv=0907.0455 |bibcode=2010PhyA..389..467P |doi=10.1016/j.physa.2009.09.045}}</ref> 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.


The concept was explained in the 1969 book ''The Peter Principle'' (]) by ] and ].<ref name=":1" /> Hull wrote the text, which was based on Peter's research. Peter and Hull intended the book to be ],<ref>{{Cite news|url=https://www.nytimes.com/1990/01/15/obituaries/laurence-j-peter-is-dead-at-70-his-principle-satirized-business.html|title=Laurence J. Peter Is Dead at 70; His 'Principle' Satirized Business|last=Barron|first=James|date=1990-01-15|work=The New York Times|access-date=2019-11-26|language=en-US|issn=0362-4331}}</ref> but it became popular as it was seen to make a serious point about the shortcomings of how people are promoted within hierarchical organizations. The Peter principle has since been the subject of much commentary and research.
While the principle has been "proven" in a computer simulation. All of the real world evidence of it are anecdotal (and often intended to be humorous in nature). No systematic proof or scientific study in real world conditions has ever verified the hypothesis that promoting employees randomly is better for a corporation than promoting them based on merit.


== Overview == ==Summary==
The Peter principle states that a person who is competent at their job will earn a promotion to a position that requires different skills. If the promoted person lacks the skills required for the new role, they will be incompetent at the new level, and will not be promoted again.<ref name=":0" /> If the person is competent in the new role, they will be promoted again and will continue to be promoted until reaching a level at which they are incompetent. Being incompetent, the individual will not qualify for promotion again, and so will remain stuck at this ''final placement'' or ''Peter's plateau''.
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. ] in his work on ]s at nuclear power plants. He observed it applied to hardware, e.g., vacuum cleaners as ]s, and 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.


This outcome is inevitable, given enough time and enough positions in the hierarchy to which competent employees may be promoted. The Peter principle is therefore expressed as: "In a hierarchy, every employee tends to rise to his level of incompetence." This leads to Peter's corollary: "In time, every post tends to be occupied by an employee who is incompetent to carry out its duties." Hull calls the study of how hierarchies work ].<ref name=":1">Peter, Laurence J., and Raymond Hull. 1970. ''The Peter Principle''. Pan Books.</ref>{{Rp|22, 24, 148}}
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 a ] eventually are ] 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 Peter Principle''==
The employee's incompetence is not necessarily a result of the higher-ranking position being more difficult — simply, that job may be crucially different from the job in which the employee previously excelled, and thus requires different work skills, which the employee may not possess. For example, a factory worker's excellence in their job can earn them promotion to manager, at which point the skills that earned them their promotion no longer apply to their job.
]'s research led to the formulation of the Peter Principle well before publishing his findings.


Eventually, to elucidate his observations about ], Peter worked with ] to develop a book, ''The Peter Principle'', which was published by ] in 1969. As such, the principle is named for Peter because, although Hull ], it is a summary of Peter's research.<ref>Hull, in his introduction to the book.</ref>
Thus, "work is accomplished by those employees who have not yet reached their level of incompetence".


== Solutions == ===Summary===
In the first two chapters, Peter and Hull give various examples of the Peter principle in action. In each case, the higher position required skills that were not required at the level immediately below. For example, a competent school teacher may make a competent assistant principal, but then go on to be an incompetent principal. The teacher was competent at educating children, and as assistant principal, he was good at dealing with parents and other teachers, but as principal, he was poor at maintaining good relations with the school board and the superintendent.<ref name=":1" />{{Rp|27–9}}
One way that organizations can avoid this effect is by having an "]" policy that requires ] of an employee who fails to attain a promotion after a certain amount of time. Even in instances where an employee can handle their current job but fail to do any better, they can still cause harm within the company, by way of preventing those beneath them with higher potential of moving up, as well as lowering morale once such employees become aware of this fact. The ] for instance requires that certain ranks be held for no longer than a set amount of time, a lack of compliance of which could render grounds for dismissal.


In chapter 3, Peter and Hull discuss apparent exceptions to this principle and then debunk them. One of these illusory exceptions is when someone who is incompetent is still promoted anyway—they coin the phrase "percussive sublimation" for this phenomenon of being "kicked upstairs" (cf. ]). However, it is only a pseudo-promotion: a move from one unproductive position to another. This improves staff morale, as other employees believe that they too can be promoted again.<ref name=":1" />{{Rp|32–3}} Another pseudo-promotion is the "lateral arabesque": when a person is moved out of the way and given a longer job title.<ref name=":1" />{{Rp|34–5}}
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 ] abilities.
* The first corollary is that employees who are dedicated to their current jobs should not be promoted for their efforts (like ]), for which they might, instead, receive a pay increase.
* 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.


While incompetence is merely a barrier to further promotion, "super-''incompetence''" is grounds for dismissal, as is "super-''competence''". In both cases, "they tend to disrupt the hierarchy."<ref name=":1" />{{Rp|41}} One specific example of a super-competent employee is a teacher of children with special needs: they were so effective at educating the children that, after a year, they exceeded all expectations at reading and arithmetic, but the teacher was still fired because they had neglected to devote enough time to ] and ].<ref name=":1" />{{Rp|39}}
Peter argues out that a class, or ] (]) system is supposedly 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 employees who would never have come there at all if they had been forced to start at the bottom". Thus the hierarchies "are more efficient than those of a classless or egalitarian society" according to Peter's view.


Chapters 4 and 5 deal with the two methods of achieving promotion: "push" and "pull". "Push" refers to the employee's own efforts, such as working hard and taking courses for self-improvement. This is usually not very effective due to the seniority factor: the next level up is often fully occupied, blocking the path to promotion.<ref name=":1" />{{Rp|52}} "Pull", on the other hand, is far more effective and refers to accelerated promotion brought about by the efforts of an employee's mentors or patrons.<ref name=":1" />{{Rp|48–51}}<ref>"The combined Pull of several Patrons is the sum of their separate Pulls multiplied by the number of Patrons." (Peter and Hull, p. 51)</ref>
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 ] paths allowing a good technical person to acquire pay and status reserved for management in most organizations.


Chapter 6 explains why "good followers do not become good leaders."<ref name=":1" />{{Rp|60}} In chapter 7, Peter and Hull describe the effect of the Peter principle in politics and government. Chapter 8, titled "Hints and Foreshadowings", discusses the work of earlier writers on the subject of incompetence, such as ], ], and ].
Alessandro Pluchino, Andrea Rapisarda and Cesare Garofalo used an ] 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.<ref name=Pluchino/> This work won the 2010 ] in management science.<ref>{{cite journal |author=Anonymous |year=2010 |title=The 2010 Ig Nobel Prize Winners |journal=] |volume=16 |issue=6 |pages=10–13 |url=http://improbable.com/airchives/paperair/volume16/v16i6/AIR_16-6_screen.pdf |format=]}}</ref>


Chapter 9 explains that, once employees have reached their level of incompetence, they always lack insight into their situation. Peter and Hull go on to explain why ] do not work and are actually counter-productive.<ref name=":1" />{{Rp|84–6}} Finally, they describe "summit competence": when someone reaches the highest level in their organization and yet is still competent at that level. This is only because there were not enough ranks in the hierarchy, or because they did not have time to reach a level of incompetence. Such people often seek a level of incompetence in another hierarchy; this is known as "compulsive incompetence". For example, ] was an outstanding teacher but a terrible defence attorney.<ref name=":1" />{{Rp|88–9}}
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).


Chapter 10 explains why attempts to assist an incompetent employee by promoting another employee to act as their assistant does not work: "''Incompetence plus incompetence equals incompetence''" (italics in original).<ref name=":1" />{{Rp|93}}
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.


Chapters 11 and 12 describe the various medical and ] of ] that may come as result of someone reaching their level of incompetence, as well as other ] such as certain ].
==Hierarchiology==
Along with the Peter Principle, Dr. Peter also coined "hierarchiology" as the ] concerned with the basic principles of ] organized systems in the ].


Chapter 13 considers whether it is possible for an employee who has reached their level of incompetence to be happy and healthy once they get there: the answer is no if the person realizes their true situation, and yes if the person does not.<ref name=":1" />{{Rp|111–2}}
{{quote|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''}}


Various ways of avoiding promotion to the final level are described in chapter 14. Attempting to refuse an offered promotion is ill-advised and is only practicable if the employee is not married and has no one else to answer to. Generally, it is better to avoid being considered for promotion in the first place, by pretending to be incompetent while one is actually still employed at a level of competence. This is "''Creative Incompetence''," for which several examples of successful techniques are given. It works best if the chosen field of incompetence does not actually impair one's work.<ref name=":1" />{{Rp|125}}
==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 ] was a consummate and superb ] due especially to his ] and ] but reached his "level of incompetence" as commander-in-chief of the ] 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 '']'' cartoon series (such as ]), the movie '']'', and the television shows '']'' and '']''. In particular, the Dilbert Principle seems to be an extension to 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. Of course, both the Peter Principle and the Dilbert Principle may be operating in the same organization at the same time.


The concluding chapter applies Peter's Principle to the entire human species at an evolutionary level and asks whether humanity can survive in the long run, or will it become extinct upon reaching its level of incompetence as technology advances.
In 1981 ] made a board game on the topic titled ''The Peter Principle Game''.


==Research and related works==
A syndicated ] called ''The Peter Principle'' was published in ].
Other commenters made observations similar to the Peter principle long before Peter's research. ]'s 1763 play '']'' features an army sergeant who shuns the opportunity to move up in the ranks, saying "I am a good sergeant; I might easily make a bad captain, and certainly an even worse general. One knows from experience." Similarly, ] (1780–1831) wrote that "there is nothing more common than to hear of men losing their energy on being raised to a higher position, to which they do not feel themselves equal."<ref name=Grudin>{{cite journal |last1=Grudin |first1= Jonathan |date=January–February 2016 |title= The Rise of Incompetence |journal= Interactions |volume= 23 |issue=1 |pages=6–7 |doi= 10.1145/2854002|doi-access= free }}</ref> Spanish philosopher ] (1883–1955) virtually enunciated the Peter principle in 1910, "All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent."<ref name=Grudin/><ref>{{cite news|url=http://www.laopinion.es/opinion/2010/11/07/umbral-incompetencia/312847.html|title=En el umbral de la incompetencia|language=es|work=La Opinión|access-date=November 30, 2013}}</ref><ref>{{cite book |last1= Christian|first1= Brian|last2= Griffiths|first2=Tom |year= 2016 |title= Algorithms to Live By |url= https://books.google.com/books?id=yvaLCgAAQBAJ&q=%22peter+principle%22&pg=PA219|publisher= Henry Holt and Company|page= 219|isbn= 978-1627790376}}</ref>


A number of scholars have engaged in research interpreting the Peter principle and its effects. In 2000, ] explored two possible explanations for the phenomenon. First is the idea that employees work harder to gain a promotion, and then slack off once it is achieved. The other is that it is a statistical process: workers who are promoted have passed a particular benchmark of productivity based on factors that cannot necessarily be replicated in their new role, leading to a Peter principle situation. Lazear concluded that the former explanation only occurs under particular compensation structures, whereas the latter always holds up.<ref name=Lazear>{{cite web|first= Edward P.|last= Lazear|author-link= Edward Lazear|date= October 12, 2000|title= The Peter Principle: Promotions and Declining Productivity|url= http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf|publisher= ] and ], ]|access-date= March 23, 2009|archive-url= https://web.archive.org/web/20180219173718/http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf|archive-date= February 19, 2018|url-status= dead}}</ref>
In April 2009, it was announced that the book would be re-issued in honor of its 40th anniversary.<ref>http://www.msnbc.msn.com/id/30091642/</ref>


Alessandro Pluchino, Andrea Rapisarda, and Cesare Garofalo (2010) used an ] approach to simulate the promotion of employees in a system where the Peter principle is assumed to be true. They found that the best way to improve efficiency in an enterprise is to promote people randomly, or to ] the best and the worst performer in a given group, from which the person to be promoted is then selected randomly.<ref name=Pluchino>{{cite journal |first1= Alessandro |last1= Pluchino |first2= Andrea |last2= Rapisarda |first3= Cesare |last3= Garofalo |journal=] |volume= 389 |title= The Peter Principle Revisited: A Computational Study |issue= 3 |pages= 467–472 |year= 2010 |arxiv= 0907.0455 |bibcode= 2010PhyA..389..467P |doi= 10.1016/j.physa.2009.09.045|s2cid= 9077554 }}</ref> For this work, they won the 2010 edition of the parody ] in ].<ref>{{cite journal|year=2010 |title=The 2010 Ig Nobel Prize Winners |journal=] |volume=16 |issue=6 |pages=10–13|url=http://improbable.com/airchives/paperair/volume16/v16i6/AIR_16-6_screen.pdf }}</ref> Later work has shown that firms that follow the Peter Principle may be disadvantaged, as they may be overtaken by competitors, or may produce smaller revenues and profits;<ref name=Udhayanan>{{cite journal |first1= Prateksha |last1= Udhayanan |first2= Swasti |last2= Mishra |first3= Shrisha |last3= Rao |journal=] |volume= 583 |title= Firm dynamics and employee performance management in duopoly markets |issue= 126298 |year= 2021 |page= 126298 |doi= 10.1016/j.physa.2021.126298 |bibcode= 2021PhyA..58326298U |s2cid= 238731817 }}</ref> as well why success most often is a result of luck rather than talent—work which earned Pluchino and Rapisarda a second ] in 2022.<ref>{{Cite web |date=2006-08-01 |title=Past Ig Winners |url=https://improbable.com/ig/winners/ |access-date=2022-09-16 |website=improbable.com |language=en-US}}</ref>
The Peter Principle is also mentioned in Jane Wagner's "The Search for Signs of Intelligent Life in the Universe".


In 2018, professors Alan Benson, Danielle Li, and Kelly Shue analyzed sales workers' performance and promotion practices at 214 American businesses to test the veracity of the Peter principle. They found that these companies tended to promote employees to a management position based on their performance in their previous position, rather than based on managerial potential. Consistent with the Peter principle, the researchers found that high performing sales employees were likelier to be promoted, and that they were likelier to perform poorly as managers, leading to considerable costs to the businesses.<ref>{{cite journal |last1= Benson|first1=Alan |last2= Li |first2=Danielle|last3=Shue|first3=Kelly |date= February 2018 |title= Promotions and the Peter Principle |url= http://www.nber.org/papers/w24343 |journal= NBER Working Paper |volume=24343 |pages= 1–54|doi= 10.3386/w24343 |access-date= May 22, 2018|doi-access= free }}</ref><ref>Benson, Alan, Danielle Li, and Kelly Shue. 2019 April 24. "." '']''.</ref><ref name=":0" />
In February 2011, the Peter Principle is mentioned in an episode of 30 Rock ].


The Peter principle inspired ], creator of the comic strip '']'', to develop a similar concept, the ]. The Dilbert principle holds that incompetent employees are promoted to management positions to get them out of the workflow. The idea was explained by Adams in his 1996 business book ''The Dilbert Principle'', and it has since been analyzed alongside the Peter principle. João Ricardo Faria wrote that the Dilbert principle is "a sub-optimal version of the Peter principle," and leads to even lower profitability than the Peter principle.<ref>{{cite journal |last= Faria |first=João Ricardo |date= January 2000 |title= An Economic Analysis of the Peter and Dilbert Principles|url= http://www.finance.uts.edu.au/research/wpapers/wp101.pdf|journal= UTS Working Papers|volume=101 |pages= 13–14 |issn=1036-7373|access-date= October 5, 2018}}</ref>
==Earlier version==
The same experience was described as early as 1767 by ] in his comedy ] (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.”<ref>http://www.gutenberg.org/dirs/etext05/7mnbh10.txt</ref><br />
<br />
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.”


==Response by organizations==
== See also ==
Companies and organizations shaped their policies to contend with the Peter principle. Lazear stated that some companies expect that productivity will "regress to the mean" following promotion in their hiring and promotion practices.<ref name=Lazear/> Other companies have adopted "]" strategies, such as the ], in which employees who do not advance are periodically fired. The Cravath System was developed at the law firm ], which made a practice of hiring chiefly recent law graduates, promoting internally and firing employees who do not perform at the required level.<ref>{{cite web |title=Cravath, Swaine & Moore LLP |url=https://www.cravath.com/the-cravath-system/the-system-s-history.html |website=Cravath - The System’s History |access-date=5 September 2023 |language=en}}</ref> ] and ] have suggested the additive increase/multiplicative decrease algorithm as a solution to the Peter principle less severe than firing employees who fail to advance. They propose a dynamic hierarchy in which employees are regularly either promoted or reassigned to a lower level so that any worker who is promoted to their point of failure is soon moved to an area where they are productive.<ref>{{cite book |last1=Christian |first1=Brian |last2=Griffiths|first2=Tom |year=2016 |title=Algorithms to Live By |url=https://books.google.com/books?id=yvaLCgAAQBAJ&q=%22peter+principle%22&pg=PA219 |publisher=Henry Holt and Company|pages=219–220 |isbn=978-1627790376}}</ref>
* ]
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== References == ==Popular recognition==
'']'' is a British television sitcom broadcast by the ] between 1995 and 2000, featuring ] as an incompetent bank manager named Peter, in an apparent demonstration of the principle.
{{Reflist}}


''The Incompetence Opera''<ref>{{cite AV media| title=The Incompetence Opera|type=video (16')|publisher=Improbable Research|via=YouTube | date=29 December 2017 | url=https://www.youtube.com/watch?v=cNGusIvpVxc}}</ref> is a 16-minute mini-opera that premiered at the satirical ] ceremony in 2017,<ref>{{cite web |url=https://improbable.com/ig/archive/the-27th-first-annual-ig-nobel-prize-ceremony-lectures/|title=The 27th First Annual Ig® Nobel Prize Ceremony & Lectures |date=14 September 2017 |archive-url=https://web.archive.org/web/20180119120422/https://www.improbable.com/ig/2017/ |archive-date=19 January 2018 |url-status=live}}</ref> described as "a musical encounter with the Peter principle and the ]".<ref>{{cite web |url=https://www.improbable.com/2017/08/30/preview-the-incompetence-opera/ |title=Preview: "The Incompetence Opera" |publisher=Improbable Research |date=30 August 2017 |archive-date=19 January 2018 |archive-url=https://web.archive.org/web/20180119120354/https://www.improbable.com/2017/08/30/preview-the-incompetence-opera/ |url-status=live }}</ref>
==Bibliography==
* {{cite book|title= The Peter Principle: why things always go wrong|last1= Peter|first1= Laurence J|authorlink1= Laurence Peter|last2= Hull|first2= Raymond|authorlink2= Raymond Hull|publisher = ]|location= ]|year= 1969|oclc= 1038496|isbn= 0688275443}} ] lists 24 editions.
* {{cite web|first= Edward P|last= Lazear|authorlink= Edward Lazear|date= 2000-10-12|title= The Peter Principle: Promotions and Declining Productivity|url= http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf|format= PDF|publisher= ] and ], ]}}


==External links== ==See also==
* {{annotated link|Founder's syndrome}}
* 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.
* {{annotated link|Negative selection (politics)}}
* Satirical principles for promotion beyond the level of incompetence.
* {{annotated link|Parkinson's law}}
*
* {{annotated link|Putt's Law and the Successful Technocrat|''Putt's Law and the Successful Technocrat''}}
* Time Magazine, Friday, Mar. 28, 1969.
* {{annotated link|Systemantics|''Systemantics''}}
*

*
==References==
{{Reflist|30em}}

===Bibliography===
* Benson, Alan, Danielle Li, and Kelly Shue. 2018. "Promotions and the Peter Principle." ''Quarterly Journal of Economics''. {{SSRN|3047193}}. {{doi|10.2139/ssrn.3047193}}.
**Benson, Alan, Danielle Li, and Kelly Shue. 2019 April 24. "." '']''.
*{{cite book |last1= Christian|first1= Brian|last2= Griffiths|first2=Tom |year= 2016 |title= Algorithms to Live By |url= https://books.google.com/books?id=yvaLCgAAQBAJ&q=%22peter+principle%22&pg=PA219|publisher= Henry Holt and Company|pages= 219–20|isbn= 978-1627790376}}
*{{cite journal |last= Faria |first=João Ricardo |date= 2000 |title= An Economic Analysis of the Peter and Dilbert Principles|url= http://www.finance.uts.edu.au/research/wpapers/wp101.pdf|journal= UTS Working Papers|volume=101 |pages= 1–18|access-date= October 5, 2018}}
* {{cite web|first= Edward P|last= Lazear|author-link= Edward Lazear|date= October 12, 2000|title= The Peter Principle: Promotions and Declining Productivity|url= http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf|publisher= ] and ], ]|access-date= March 23, 2009|archive-url= https://web.archive.org/web/20180219173718/http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf|archive-date= February 19, 2018|url-status= dead}}
*—— 2004. "." ''Journal of Political Economy'' 112(S1):S141-63. {{doi|10.1086/379943}}. {{JSTOR|10.1086/379943}}.
* Peter, Laurence J. and Hull, Raymond. 1969. ''The Peter Principle''. William Morrow & Co Inc. (Pan Books ed., 1970).

== External links ==
{{Spoken Misplaced Pages|Peter_principle.ogg|date=2019-10-3}}
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Latest revision as of 10:59, 28 November 2024

Management concept by Laurence J. Peter For other uses, see Peter principle (disambiguation).

The cover of The Peter Principle (1970 Pan Books edition)

The Peter principle is a concept in management developed by Laurence J. Peter which observes that people in a hierarchy tend to rise to "a level of respective incompetence": employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.

The concept was explained in the 1969 book The Peter Principle (William Morrow and Company) by Laurence Peter and Raymond Hull. Hull wrote the text, which was based on Peter's research. Peter and Hull intended the book to be satire, but it became popular as it was seen to make a serious point about the shortcomings of how people are promoted within hierarchical organizations. The Peter principle has since been the subject of much commentary and research.

Summary

The Peter principle states that a person who is competent at their job will earn a promotion to a position that requires different skills. If the promoted person lacks the skills required for the new role, they will be incompetent at the new level, and will not be promoted again. If the person is competent in the new role, they will be promoted again and will continue to be promoted until reaching a level at which they are incompetent. Being incompetent, the individual will not qualify for promotion again, and so will remain stuck at this final placement or Peter's plateau.

This outcome is inevitable, given enough time and enough positions in the hierarchy to which competent employees may be promoted. The Peter principle is therefore expressed as: "In a hierarchy, every employee tends to rise to his level of incompetence." This leads to Peter's corollary: "In time, every post tends to be occupied by an employee who is incompetent to carry out its duties." Hull calls the study of how hierarchies work hierarchiology.

The Peter Principle

Laurence J. Peter's research led to the formulation of the Peter Principle well before publishing his findings.

Eventually, to elucidate his observations about hierarchies, Peter worked with Raymond Hull to develop a book, The Peter Principle, which was published by William Morrow and Company in 1969. As such, the principle is named for Peter because, although Hull actually wrote almost all of the book's text, it is a summary of Peter's research.

Summary

In the first two chapters, Peter and Hull give various examples of the Peter principle in action. In each case, the higher position required skills that were not required at the level immediately below. For example, a competent school teacher may make a competent assistant principal, but then go on to be an incompetent principal. The teacher was competent at educating children, and as assistant principal, he was good at dealing with parents and other teachers, but as principal, he was poor at maintaining good relations with the school board and the superintendent.

In chapter 3, Peter and Hull discuss apparent exceptions to this principle and then debunk them. One of these illusory exceptions is when someone who is incompetent is still promoted anyway—they coin the phrase "percussive sublimation" for this phenomenon of being "kicked upstairs" (cf. Dilbert principle). However, it is only a pseudo-promotion: a move from one unproductive position to another. This improves staff morale, as other employees believe that they too can be promoted again. Another pseudo-promotion is the "lateral arabesque": when a person is moved out of the way and given a longer job title.

While incompetence is merely a barrier to further promotion, "super-incompetence" is grounds for dismissal, as is "super-competence". In both cases, "they tend to disrupt the hierarchy." One specific example of a super-competent employee is a teacher of children with special needs: they were so effective at educating the children that, after a year, they exceeded all expectations at reading and arithmetic, but the teacher was still fired because they had neglected to devote enough time to bead-stringing and finger-painting.

Chapters 4 and 5 deal with the two methods of achieving promotion: "push" and "pull". "Push" refers to the employee's own efforts, such as working hard and taking courses for self-improvement. This is usually not very effective due to the seniority factor: the next level up is often fully occupied, blocking the path to promotion. "Pull", on the other hand, is far more effective and refers to accelerated promotion brought about by the efforts of an employee's mentors or patrons.

Chapter 6 explains why "good followers do not become good leaders." In chapter 7, Peter and Hull describe the effect of the Peter principle in politics and government. Chapter 8, titled "Hints and Foreshadowings", discusses the work of earlier writers on the subject of incompetence, such as Sigmund Freud, Karl Marx, and Alexander Pope.

Chapter 9 explains that, once employees have reached their level of incompetence, they always lack insight into their situation. Peter and Hull go on to explain why aptitude tests do not work and are actually counter-productive. Finally, they describe "summit competence": when someone reaches the highest level in their organization and yet is still competent at that level. This is only because there were not enough ranks in the hierarchy, or because they did not have time to reach a level of incompetence. Such people often seek a level of incompetence in another hierarchy; this is known as "compulsive incompetence". For example, Socrates was an outstanding teacher but a terrible defence attorney.

Chapter 10 explains why attempts to assist an incompetent employee by promoting another employee to act as their assistant does not work: "Incompetence plus incompetence equals incompetence" (italics in original).

Chapters 11 and 12 describe the various medical and psychological manifestations of stress that may come as result of someone reaching their level of incompetence, as well as other symptoms such as certain characteristic habits of speech or behaviour.

Chapter 13 considers whether it is possible for an employee who has reached their level of incompetence to be happy and healthy once they get there: the answer is no if the person realizes their true situation, and yes if the person does not.

Various ways of avoiding promotion to the final level are described in chapter 14. Attempting to refuse an offered promotion is ill-advised and is only practicable if the employee is not married and has no one else to answer to. Generally, it is better to avoid being considered for promotion in the first place, by pretending to be incompetent while one is actually still employed at a level of competence. This is "Creative Incompetence," for which several examples of successful techniques are given. It works best if the chosen field of incompetence does not actually impair one's work.

The concluding chapter applies Peter's Principle to the entire human species at an evolutionary level and asks whether humanity can survive in the long run, or will it become extinct upon reaching its level of incompetence as technology advances.

Research and related works

Other commenters made observations similar to the Peter principle long before Peter's research. Gotthold Ephraim Lessing's 1763 play Minna von Barnhelm features an army sergeant who shuns the opportunity to move up in the ranks, saying "I am a good sergeant; I might easily make a bad captain, and certainly an even worse general. One knows from experience." Similarly, Carl von Clausewitz (1780–1831) wrote that "there is nothing more common than to hear of men losing their energy on being raised to a higher position, to which they do not feel themselves equal." Spanish philosopher José Ortega y Gasset (1883–1955) virtually enunciated the Peter principle in 1910, "All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent."

A number of scholars have engaged in research interpreting the Peter principle and its effects. In 2000, Edward Lazear explored two possible explanations for the phenomenon. First is the idea that employees work harder to gain a promotion, and then slack off once it is achieved. The other is that it is a statistical process: workers who are promoted have passed a particular benchmark of productivity based on factors that cannot necessarily be replicated in their new role, leading to a Peter principle situation. Lazear concluded that the former explanation only occurs under particular compensation structures, whereas the latter always holds up.

Alessandro Pluchino, Andrea Rapisarda, and Cesare Garofalo (2010) used an agent-based modelling approach to simulate the promotion of employees in a system where the Peter principle is assumed to be true. 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. For this work, they won the 2010 edition of the parody Ig Nobel Prize in management science. Later work has shown that firms that follow the Peter Principle may be disadvantaged, as they may be overtaken by competitors, or may produce smaller revenues and profits; as well why success most often is a result of luck rather than talent—work which earned Pluchino and Rapisarda a second Ig Nobel Prize in 2022.

In 2018, professors Alan Benson, Danielle Li, and Kelly Shue analyzed sales workers' performance and promotion practices at 214 American businesses to test the veracity of the Peter principle. They found that these companies tended to promote employees to a management position based on their performance in their previous position, rather than based on managerial potential. Consistent with the Peter principle, the researchers found that high performing sales employees were likelier to be promoted, and that they were likelier to perform poorly as managers, leading to considerable costs to the businesses.

The Peter principle inspired Scott Adams, creator of the comic strip Dilbert, to develop a similar concept, the Dilbert principle. The Dilbert principle holds that incompetent employees are promoted to management positions to get them out of the workflow. The idea was explained by Adams in his 1996 business book The Dilbert Principle, and it has since been analyzed alongside the Peter principle. João Ricardo Faria wrote that the Dilbert principle is "a sub-optimal version of the Peter principle," and leads to even lower profitability than the Peter principle.

Response by organizations

Companies and organizations shaped their policies to contend with the Peter principle. Lazear stated that some companies expect that productivity will "regress to the mean" following promotion in their hiring and promotion practices. Other companies have adopted "up or out" strategies, such as the Cravath System, in which employees who do not advance are periodically fired. The Cravath System was developed at the law firm Cravath, Swaine & Moore, which made a practice of hiring chiefly recent law graduates, promoting internally and firing employees who do not perform at the required level. Brian Christian and Tom Griffiths have suggested the additive increase/multiplicative decrease algorithm as a solution to the Peter principle less severe than firing employees who fail to advance. They propose a dynamic hierarchy in which employees are regularly either promoted or reassigned to a lower level so that any worker who is promoted to their point of failure is soon moved to an area where they are productive.

Popular recognition

The Peter Principle is a British television sitcom broadcast by the BBC between 1995 and 2000, featuring Jim Broadbent as an incompetent bank manager named Peter, in an apparent demonstration of the principle.

The Incompetence Opera is a 16-minute mini-opera that premiered at the satirical Ig Nobel Prize ceremony in 2017, described as "a musical encounter with the Peter principle and the Dunning–Kruger effect".

See also

References

  1. Flynn, Dan (November 8, 1980). "Peter of the incompetency principle speaks of presidents, now and soon". Lewiston Morning Tribune. (Idaho). p. 2B.
  2. ^ Hayes, Adam (August 21, 2020). "Peter Principle: What You Need to Know". Investopedia. Retrieved March 17, 2021.
  3. ^ Peter, Laurence J., and Raymond Hull. 1970. The Peter Principle. Pan Books.
  4. Barron, James (January 15, 1990). "Laurence J. Peter Is Dead at 70; His 'Principle' Satirized Business". The New York Times. ISSN 0362-4331. Retrieved November 26, 2019.
  5. Hull, in his introduction to the book.
  6. "The combined Pull of several Patrons is the sum of their separate Pulls multiplied by the number of Patrons." (Peter and Hull, p. 51)
  7. ^ Grudin, Jonathan (January–February 2016). "The Rise of Incompetence". Interactions. 23 (1): 6–7. doi:10.1145/2854002.
  8. "En el umbral de la incompetencia". La Opinión (in Spanish). Retrieved November 30, 2013.
  9. Christian, Brian; Griffiths, Tom (2016). Algorithms to Live By. Henry Holt and Company. p. 219. ISBN 978-1627790376.
  10. ^ Lazear, Edward P. (October 12, 2000). "The Peter Principle: Promotions and Declining Productivity" (PDF). Hoover Institution and Graduate School of Business, Stanford University. Archived from the original (PDF) on February 19, 2018. Retrieved March 23, 2009.
  11. Pluchino, Alessandro; Rapisarda, Andrea; Garofalo, Cesare (2010). "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. S2CID 9077554.
  12. "The 2010 Ig Nobel Prize Winners" (PDF). Annals of Improbable Research. 16 (6): 10–13. 2010.
  13. Udhayanan, Prateksha; Mishra, Swasti; Rao, Shrisha (2021). "Firm dynamics and employee performance management in duopoly markets". Physica A. 583 (126298): 126298. Bibcode:2021PhyA..58326298U. doi:10.1016/j.physa.2021.126298. S2CID 238731817.
  14. "Past Ig Winners". improbable.com. August 1, 2006. Retrieved September 16, 2022.
  15. Benson, Alan; Li, Danielle; Shue, Kelly (February 2018). "Promotions and the Peter Principle". NBER Working Paper. 24343: 1–54. doi:10.3386/w24343. Retrieved May 22, 2018.
  16. Benson, Alan, Danielle Li, and Kelly Shue. 2019 April 24. "Promotions and the Peter Principle." Vox EU.
  17. Faria, João Ricardo (January 2000). "An Economic Analysis of the Peter and Dilbert Principles" (PDF). UTS Working Papers. 101: 13–14. ISSN 1036-7373. Retrieved October 5, 2018.
  18. "Cravath, Swaine & Moore LLP". Cravath - The System’s History. Retrieved September 5, 2023.
  19. Christian, Brian; Griffiths, Tom (2016). Algorithms to Live By. Henry Holt and Company. pp. 219–220. ISBN 978-1627790376.
  20. The Incompetence Opera (video (16')). Improbable Research. December 29, 2017 – via YouTube.
  21. "The 27th First Annual Ig® Nobel Prize Ceremony & Lectures". September 14, 2017. Archived from the original on January 19, 2018.
  22. "Preview: "The Incompetence Opera"". Improbable Research. August 30, 2017. Archived from the original on January 19, 2018.

Bibliography

External links

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