The purpose of this paper is to examine the Peter Principle, consider its veracity and determine how an understanding of the theory may assist Coaches to understand and respond to the effects of the Peter Principle on a client.
The Peter Principle
Dr Laurence J Peter was a Canadian psychologist who became curious as to why so many things seem to fail: Products, Services, Government, Education and so on. He sought an explanation and did this by reviewing large numbers of Case studies. The result was his theory which he presented and explained in his book called “The Peter Principle Why Things Always Go Wrong” published in 1969 with co-author Raymond Hull. The theory states that
in a hierarchy every employee tends to rise to his level of incompetence.(25)
The meaning of this is that competent employees are continually promoted from each position until they reach a level in which they are no longer competent. Rather than being relegated to a lower position at which he/she was competent, he remains in the position of incompetence.
In time, every post tends to be occupied by an employee who is incompetent to carry out its duties. Work is accomplished by those employees who have not yet reached their level of incompetence. (27)
A Hierarchy is a group of people categorised according to ability or status. This particularly applies to both public and private administrations, including business, industry, trade-unions, politics, government, the military, religion and education. The book took a humorous approach which was supported by the invention of new words such as:
Papyromania- the compulsive accumulation of papers
Papyrophobia- the abnormal desire for a clean desk
The Teeter-Totter Syndrome- the inability to make decisions
From the case studies, numerous characters were described in colourful detail to demonstrate the operation of the Principle in varied circumstances.
Since 1969, the Peter Principle has been widely quoted but there is a very limited body of work on the topic. Only twenty-four research based resources have been found; of which there were twenty-one articles and three books. These resources covered three main areas: Hiring and Promotion practises, Training Methodologies and Organization Design. There is little research about employees rising and remaining at the level of their incompetence.
Kane (1970) used an example:
A man promoted is unlikely to perform as well at his new level as his old level. He has new tasks and responsibility. Much of his past experience is of little help. On the other hand, a man passed over for promotions (recycled) will have the benefits of his experience intact as well as another year’s advantage on the learning curve (p. B805).
that at least in our model, the Peter Principle is a relative phenomenon, not an absolute one. (p. B809).
Fairburn and Malcomson (2001) compared financial incentives against promotion and concluded that the Peter Principle may have a sound basis when incentives for promotion are not tied directly to manager incentive programs.
Lazeer (2004) examined if and why there was a fall in productivity following promotion.
Workers who are promoted (or hired in the first place) receive this treatment because they are observed to have exceeded some standard.
do not appear to be as able as they were before the promotion (page 26).
Baleanu (2007) examined organizational decision making and considered that different groups within the firm compete for limited resources seeking fulfillment of their objective. The result of this is that employees are promoted to levels where their decision making more likely serves the group and not the larger organizational objectives, thus the employee appears incompetent.
Pluchino, Rapisarda and Garofalo (2010) carried out a study using alternative promotion tactics to increase the efficiency of the organization.
Acosta (2010) agreed with the assertion that hiring practices and promotion methodologies support the Peter Principle.
Schaap (c 2009) accepted as true that
the Peter Principle is still thriving-it is not in decline. It is flourishing at least in the general/business/management world. Second our research showed that 74% of the people believe that it is flourishing and 73% of these same participants alluded to the fact that they have seen this situation happen within the last five years
One study did not entirely agree; Sabatier stated that the
results clearly contradict the predictions of the Peter Principle, (p 26)
but did not rule it out altogether as the research that was carried out was in a narrow field of promotions to Professorships in France.
The majority of studies used modelling and analysis rather than data from actual organisations and where organisations were investigated it was only one at a time rather than over a range. Nevertheless while studies did not prove conclusively that the Peter Principle exists in all cases, it is certainly a phenomenon that cannot be completely discounted or ignored.
Wherever the principle does occur there are significant consequences, both to the organisation and to the individual. The effects on the organisation are of growing inefficiencies through poor decision making and ultimately will be felt in financial terms.
The principle does not purely apply to Executives and is a
potential problem for all employees whether professionals or employees at a lower level (Floyd 1993).
He may have reached his ceiling or struggling to get up the ladder, be unable to progress because of those in senior positions.
When in an organization it would be important to understand where the individual is in Maslow’s learning process. He may have started as a junior employee and worked his way up the ladder arrived at the level of Unconscious Competence. The next promotion however takes him right back to the first level. Now he is a Manager or Director, apparently successful but unhappy, unfulfilled, frustrated, perhaps even wanting further success but unable to function properly and firmly stuck in his level of incompetence.
It may be difficult for him to recognise and accept what is happening to him. At whatever level he may be suffering from anxiety, stress, loss of self-esteem, inadequacy, anger and resentment. It may be that as the individual goes up the chain, his decision-making ability falters and so does the possibility that further promotions that the individual makes are any more likely to be successful.
The best interests of the organization may be opposed to the best interests of the individual. For instance, even though the client still wants promotion above his level of incompetence, he is already inefficient and causing damage to the organization and he is not in a position to recognise that.
The selection and promotion process, training and organisational design can all be considered to combat the operation of the principle. Cummings (1971) determined that the performance review process should be designed
for the purpose of self-development with provisions for guiding, counselling and training (p. 34).
Rimler (1971) stated that
The Peter principle can be nullified only if managers realize that proper management requires adequate dynamic training (p. 37).
Lazeer (2004) stated
Finally, one way to offset the Peter Principle is to wait for a longer time before making a promotion decision. The advantage is that the job assignment is better than it would have been had the decision been made earlier. The disadvantage is that able workers remain in the wrong job for a longer period of time. (page 27)
Pluchino et al concluded that
if one adopts the strategy of promoting the best member, then all the members will end their career at the level where their competence is minimal. The best promotion strategy seems to be that of choosing a member at random or, at least, that of choosing alternatively, in a random sequence, the best or the worst members (p. 470).