HR, Leadership

What is the Peter Principle and How Can You Avoid It?

Business Advice | 7 August 2023 | 10 months ago

A lot of a business’ success is down to its employees, especially those that are loyal and long term, progressing through the company as their career develops. With a lot of businesses having a hierarchical approach to job roles, this means that promotion and progression is often a clearly laid path. However, it doesn’t always work in the way that you want it to. According to The Peter Principle, there is a risk of incompetent employees being promoted, simply because they are succeeding in their current role. As all roles are slightly different and not all skills are transferable, this could eventually lead to an entire company being led by incompetent leaders.

What is the Peter Principle and How Can You Avoid It?

What is the Peter Principle?

If you are wondering “what is the Peter Principle?” you have come to the right place, as we are here to explain the ins and outs. The Peter Principle was first described by Dr. Laurence J. Peter, a Canadian education scholar and sociologist, in 1968. In this book, The Peter Principle, he explained that an employee’s lack of fulfilling a role that they have been promoted to could be due to the fact that different skills are required to what they have, rather than because they are a bad hire.

 

In most organisations and companies, there is a hierarchy of employees. The Peter Principle explains that employees rise in the hierarchy by being given promotions, and then they eventually become incompetent for their job. According to The Peter Principle, an office secretary could be good at their job, but if they are promoted to an executive assistant – a role they are not prepared, qualified or trained for – they would be less productive. This means that it would have been better for the employee and employer to not have promoted them.

 

The Peter Principle argues that hard working and productive employees will continue to be promoted, but they will eventually end up in a position where they are incompetent. They will then remain in that position because they aren’t competent enough to be considered for a further promotion or move on. Eventually, according to The Peter Principle, every role in a company will eventually be filled by someone who is unable to do the job well.

 

What are the Signs of the Peter Principle in Action?

One of the common signs of The Peter Principle in action is an employee and job being mismatched, because the employee doesn’t have the skills required to do a good job. For example, an individual might be skilled at understanding company policies, and could be promoted to become the person that creates the policies. However, these two roles require very different skills, and understanding company policies is not the same as creating them. This could lead to an employee being unable to do their job well, and being more successful without the promotion. Whereas workplace success should be rewarded with progression and promotions, this only works if it stays within a certain skillset. Once someone is promoted above their abilities and level of competence, success is replaced by failure.

 

What are the Consequences of the Peter Principle?

The effects of The Peter Principle can have a huge impact on employees and organisations, the majority of which are negative and should be avoided. When employees are promoted to the point of becoming incompetent, they stop being an asset to the business, and they can no longer perform their tasks effectively. This can lead to decreased productivity and low employee morale, as regularly feeling as though you are failing at your job can be a huge knock to your confidence. Similarly, The Peter Principle can also lead to increased turnover rates. Employees that are struggling at work are likely to feel overwhelmed, stressed and inadequate. This can result in poor job satisfaction, and increases the likelihood of them finding a role elsewhere.

 

Effects of The Peter Principle can also impact the success of a business, as having unqualified employees making key decisions can be risky. Those in leadership positions need to be qualified, skilled and experienced, but The Peter Principle prevents this. There’s also the risk of a business lacking innovation, as incompetent leaders are much more likely to play it safe.

 

How to Avoid the Peter Principle

As a business owner, it’s important to avoid The Peter Principle as much as possible, and doing so starts with identifying competence level. Think about the skills and abilities a role requires from someone, and think about who is genuinely able to do the job. Instead of simply promoting someone because it’s an obvious progression, carefully consider if they are able to provide what the new role entails.

 

Encourage employees to be aware of their strengths, weaknesses and aspirations. It’s important for them to have a realistic view of what they are capable of in the workplace, and where they will be the most productive, satisfied and successful. If someone does have a desire to progress and they don’t have the skills to do so, consider providing training and learning opportunities.

 

When you are promoting employees, do so wisely. Though it might make sense to promote the ‘next in line’ down the hierarchy, this person might not be the best for the role, as their skills might not translate. Encourage open communication between you and your employees, and ensure that everyone is on the same page. Be honest and open about your promoting decisions, and encourage employees to come to you if they have any concerns about their role.

 

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