On The Peter Principle

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I just finished reading a book called “The Peter Principle”. The principle derives its name from Laurence J. Peter, an academic, who developed it. The Peter Principle occurs when an individual in an organisation is promoted from a position of competence to one of incompetence. Laurence Peter felt that this could happen to any employee in any organisation.

He argued in his book that given enough time, and assuming the existence of enough positions in the organisation, every employee rises to and remains at his/her level of incompetence. Hence most of the productive work in any given organisation is accomplished by employees who have not yet reached their level of incompetence.

Just because you are competent in your job does not necessarily mean you should be promoted. A lot of organisations promote their competent employees for the sake of promoting them into management roles. There is the common assumption that if you are great in your current role, then you will be equally great at the next level of responsibility. Just because you are a great designer does not mean that you will be a great manager of designers. These two roles require different skill sets. This is a reason why not all great football players end up making great coaches. The skills required to play football are not the same skills required to manage and coach a football team.

I believe the Peter Principle also explains why most great number twos struggle when they get the top job. They struggle because they have been promoted to their level of incompetence. Laurence Peter stated that good followers don’t always become good leaders. The good follower may win many promotions, but that does not make him/her a leader.

Apple is currently the most valuable company in the world and it has some unique characteristics that differentiate it from most other companies. According to Adam Lashinsky’s new book on Apple, the company’s goal with regards to its employees is to place them in the perfect job and keep them there while rewarding them financially for their excellent contributions. This means that Apple lets its employees’ talents define their jobs not vice versa. This is counter intuitive to other companies’ promotional policies. Apple does not promote its staff just for the sake of promoting them. Apple strives to keep employees in positions where they excel instead of pushing them up the organisational ladder which is commonplace at other organisations.

I presume that this unique approach of dealing with employees is Apple’s way of avoiding the downsides of the Peter Principle where employees are moved from positions of strength to positions of incompetence all in the name of promotion.

Q: Do you see evidence of the Peter Principle where you work or do you disagree with Laurence Peter?

4 replies on “On The Peter Principle”

BRILLIANT. As you can see from the Apple example,organizations that stand-out handle their human resource management innovatively. Sometimes it’s not broken,but you need to reinvent the wheel regardless.

I agree with you. just because everyone does it the same way does not mean that is the only way to handle promotions in organisations. Sometimes a little reinvention is necessary.

Great. I reason then that promotion shouldn’t necessarily mean a change of tasks or position then but rather a change of reward level and degree of responsibility.

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