Is Your Company a Follower of “The Peter Principle”?

LeaderSHIP-001-The-Peter-Principle-e1348528338852Let’s start with the Wikipedia definition:

The Peter Principle is a concept in management theory in which the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities relevant to the intended role. Thus, employees only stop being promoted once they can no longer perform effectively, and “managers rise to the level of their incompetence.”

To put it simply:

Employees are promoted into positions that they really aren’t qualified for and its that promotion that then causes them to fail.

What’s new, right? This happens all the time, in the opinion of most of their staff.

We aren’t talking about promotions based on popularity (i.e. he is buddies with the boss) or growth potential (i.e. can lead the team into the next phase of the company).  These promotions are because the employee has done well in their current role but hit a ceiling for improvement and most companies think it’s the next logical choice to simply promote them.

In the 1960s, Canadian psychologist Dr. Laurence Peter proposed this theory – named in his honor – as satire but as researchers began exploring it, of course it was deemed as true problem.  What Dr. Peter observed was that in most companies, employees are rewarded for their high performance with a promotion.  But, if they began to fail in the new role, the company would rarely demote them. Instead, more training, smaller teams, or hiring assistant managers are “solutions” these companies turn to hoping it will reverse the problem.  Of course, this is all in an effort to avoid facing the painful admission that the promotion wasn’t really the best decision.

Where to we see this most frequently in a company? = Longest tenured employees.

While most of today’s employees do not stay at a company for longer than 5 years (on average) these days because they are self-motivated to grow in their career, some employees find a comfort zone at their employer and simply decide to stay in that role for as long as they can.  Nothing wrong with that – not every employee seeks to improve themselves to the next level.

But, many companies think that they are helping these employees by promoting them or they fear being viewed as a “dead-end” company by potential candidates if they aren’t trying to grow their employees from within.  Even when the employee has communicated to their supervisor that they aren’t interested in additional training or taking on new roles, the higher-ups may put pressure on the supervisor thinking that they just aren’t managing the person well.

In some cases, the supervisor will push the employee because they know if they go back and state that the employee is content they may be told to start working on moving the employee out of the company as they will become “dead weight” down the line.  If the supervisor then tries to encourage the employee to train others on how to do what they do, the employee begins to feel his/her job could be threatened if they do that because someone at less pay will be learning how to do their job and eventually replace them.

The vicious circle has begun….and the only answer seems to be to move them up to the next level to satisfy everyone – enter “The Peter Principle.”

So, how do you avoid this from happening to you or in your company?

There is no perfect answer because this is one of those things based on perception, however – through honest and open communication, you may be able to discover alternatives that will satisfy both sides of the table.

Let’s use an example as our scenario to see “what else” can be done:

Tom is an employee of 15yrs who has been in the same department in the same role and all is well.  Tom doesn’t have education beyond high school and hasn’t developed additional skills beyond what is needed for his particular job.  He enjoys his job and is very good at it as a result keeping internal and external customers quite happy.  He’s not interested in a management position or wants to try something new to expand his skills.

Its performance review time and Tom’s supervisor has been told that he needs to figure out something new to do with Tom because “he doesn’t push himself beyond what he is doing.”  One manager argues that Tom doesn’t give 100% to his job because he is just doing what he needs to do to get by.  Another manager starts talking about “wasting talent” in that the company hasn’t done more to push this employee.  So, Tom’s supervisor is told to talk to Tom about moving up into a management position so that he can share his knowledge and skills with others…it’s what every employee aims for, right?  Except – we know it’s not what Tom wants.

So, what would be an alternative to consider that wouldn’t involve a promotion?  Create a new position for Tom as a Trainer for this department in addition to his current role.

  • He isn’t moved into a management position where he isn’t qualified nor will he feel uncomfortable.
  • Stating that he will still perform his current role relieves the fear from Tom that the company is looking to replace him.
  • Asking him to train others in the role can be pitched as a cross-training opportunity for other departments as well as a backup for when he wants to take time off from work or needs a second set of hands.

Promotions aren’t always the answer – looking at how your company is structured, what goals it has overall, and how your employees can best fit in should be the process.  It is better to set someone up to succeed on a project by project basis than to potentially set them up for failure in a role they aren’t ready for or don’t want.

Remember: You hired this employee because of what he could offer in the role that he/she is in.  When considering a promotion, approach it from a “new hire” viewpoint with an interview and a better decision will be reached each time.

About the Author

Barb is an HR consultant with Timeless HR Solutions, based in Chicago, IL, which offers training and advisory services to startups and small/medium-sized businesses on various HR-related skills and challenges.

Barb Buckner
HR Consultant, Timeless HR Solutions
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Author: Barb Buckner

Over 15 years of experience as a strategic Human Resource Professional with a proven history of implementing HR strategies and managing employee relations, process improvement and compliance. A reputation for leveraging business relationships, engaging the workforce and creating a positive return on investment into HR initiatives.

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