What is the Peter Principle?
According to Dr. Laurence J. Peter, a sociologist and business consultant, and detailed in his book The Peter Principle, "In a hierarchy, every employee tends to rise to their level of incompetence." In other words, if you do well at work, you will advance in the organization's hierarchy until you can no longer do so.
It discusses a workplace reality in which employees are promoted based on their current performance and accomplishments rather than their competency and aptitude for their new role. An example would be when an outstanding individual contributor is being considered for a management position. They may be skilled at technical skills, but leading a team requires a different set of skills, which they may lack, resulting in incompetence.
What factors can enable the Peter Principle in the workplace?
The majority of entry-level jobs only require technical skills. Companies do not place a high value on soft skills as long as employees perform well on the job. After demonstrating their competency at entry-level work, the next step would be to seek career advancement in the form of promotion. This promotion is frequently based on the employee's previous level of performance.
This is a natural progression in any company, and it leads to a saturation point where the employee is unable to excel because the position is above their competency level.
How to overcome the Peter Principle
- Poor assessment criteria is one of the primary causes of the Peter Principle. Determine the skill set required for the new role and base employee performance on that.
- Provide appropriate training. Skills can be learned and acquired. Make sure you give your employees a place where they can practise leading teams and communicating with others.
- Increase pay to reward performance. Employees who perform well are a valuable asset to the business. Instead of a promotion, give them a raise in pay if they aren't very good at leading teams. Employees are able to do work they enjoy without having to worry about their incompetence. If they are interested, you can also provide training to help them prepare for a promotion.
- Reassign the inept employee to a new position. According to Dr. Laurence's suggestion, the employee will be transferred to a position that is better suited to their skills, without the stigma of being demoted. It's known as Lateral Arabesque.