Every Employee Tends to Rise to His Level of Incompetence

This morning a colleague shared with me a very interesting theory (thanks Steph!).


It is called the Peter Principle.


The Peter Principle is the principle that "In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence."


The Peter Principle is a special case of an ever-present observation: anything that works will be used in more challenging applications until it fails.


I gave this theory a lot of consideration and realized that it applies to all aspects of life...


I am a D.I.Y. enthusiast. I have a limited range of tools at home and sometimes I will try to use a tool which works perfectly in its own intended application for something which it was not meant to be used for.... because I push a tool beyond its limits it will in many cases fail and pose a risk of damage, setback, additional costs to be incurred or even injury.


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 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 his career's ceiling in an organization. The employee's incompetence is not necessarily exposed as a result of the higher-ranking position being more difficult — simply, that job is 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 his job can earn him promotion to manager, at which point the skills that earned him his promotion no longer apply to his job.


Peter's findings states that "in time, every post tends to be occupied by an employee who is incompetent to carry out his duties" and adds that "work is accomplished by those employees who have not yet reached their level of incompetence".


I personally have observed situations from within the organization as well as in social circles where individuals need to face new challenges and responsibilities. It is very interesting to learn how many individual's potential is choked by a fear of such challenge and I have seen them stagnate. In other situations I have seen that an individual are not able manage the stresses and challenges and thereby retract (demote) himself to a safe and comfortable position – and thereafter show fear of such challenges again.


One way that organizations can avoid this effect is by having a policy that requires termination of an employee should they fail 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.


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


Some 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.


References:
http://en.wikipedia.org/wiki/Peter_Principle