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Everything you need to know about the Peter Principle

Editorial Team
09/09/2020 8:03 AM

In behavioral psychology,
positive reinforcement is when good behavior is rewarded by a reinforcing
stimulus. This concept has been applied in numerous organizations, where, the
better you perform, the more likely you are to be rewarded accordingly, in most
instances this reward comes in the form of a promotion to a higher ranking
position. Most people join organizations with little to no skills, and in
several years, they would have earned their stripes and made it to the top.
However what happens when someone is promoted for a role they are not suitable
for? What happens when an individual is promoted to a senior-level role but
proves to be incompetent in that position? This concept is known as the Peter Principle,
and this article will further elucidate it.

What is the Peter Principle?

According to Hull and
Peter (1969), The Peter Principle states that a person who is competent at a
job will earn promotion to a more senior position which requires different
skills. If the promoted person lacks the skills required for the new role, they
will be incompetent at the new level, and will not be promoted again. If the
person is competent in the new role, they will be promoted again and will
continue to be promoted until reaching a level at which they are incompetent.
By being incompetent, the individual will not qualify for promotion again, and
so will remain stuck at that final level.

The Peter Principle is
therefore based on the idea that competent employees will continue to be
promoted, but at some point will be promoted into positions for which they are
incompetent. They will then remain in those positions because they do not
demonstrate any further competence that would get them recognized for additional
promotion. (Hayes, 2020).

How the peter-principle works

Promotion tends to be
based on your performance in your current role, rather than your suitability
for the next one. The Peter Principle observes that employees rise through a
firm's hierarchy through promotion until they reach a level of respective
incompetence. As a result, according to the Peter Principle, every position in
a given hierarchy will eventually be filled by employees who are incompetent to
fulfill the job duties of their respective positions (Hayes, 2020).

According to the Peter
Principle, competence is rewarded with the promotion because competence, in the
form of employee output, is noticeable, and thus usually recognized. However,
once an employee reaches a position in which they are incompetent, they are no
longer evaluated based on their output but instead are evaluated on input
factors, such as arriving at work on time and having a good attitude (Hull and
Peter, 1969).

Dr. Peter further
argued that employees tend to remain in positions for which they are
incompetent because mere incompetence is rarely sufficient to cause the
employee to be fired from the position. Ordinarily, only extreme incompetence
causes dismissal. For example, an employee who is very good at following rules
or company policies may be promoted into the position of creating rules or
policies, even though being a good rule follower does not mean that an
individual is well-suited to be a good rule creator.  The fact that the employee is not good at
making policies may however not be reason enough to cause the said employee’s
dismissal. Resultantly, the employee will fail to perform effectively in the
leadership position.

consequences of the peter –principle

In research by Benson,
Li, and Shue (2018), they analyzed sales workers' performance and promotion
practices at 214 American businesses to test the Peter Principle. They found
that companies did indeed tend to promote employees to management positions
based on their performance in their previous position, rather than based on
managerial potential. Consistent with the Peter Principle, the researchers
found that high performing sales employees were likelier to be promoted -- and
that they were also more likely to perform poorly as managers, leading to
considerable costs to the businesses. The Peter Principle may also have the
following consequences for an organization:


Having an individual
in a person they are ill-equipped for may have detrimental effects on the
organization as a whole.   The
organization may fail to perform to the best of its ability. According to
Jaques and Kathryn (1994) if a manager at a higher level was ill-equipped in respect
of his or her inherent mental processing capability, or lacked the required
skills and knowledge the risk is they would interfere in the work of managers
at a lower level generally propelled by their anxiety and insecurity. The
process of delegation would be undermined leading to organizational


If an individual does
not know what they are supposed to do in a given role, there will likely be an
impact on the productivity of the organization. This is because the said
employee will spend more time trying to find their way around their job, and
trying to look for ways to do their job effectively.  The individual may also attempt to mask their
inefficiency by doing tasks that are not related to their job to appear productive.
As a result, there will be no productivity in their given role as they are
unable to perform in the role.

morale and innovation

In the Peter
Principle, if the underperforming employee is in a management position, for
example, the effect may be reduced morale and innovation for their
subordinates. If one is being led by someone who does not demonstrate their
capability, their subordinates may develop a negative attitude to the way they
approach their duties as they do not have any parameters set by their manager
as points of achievement.  This will
result in a possibly a whole department underperforming, affecting the
productivity of the company. With time, this company may be overtaken by other
competitors in the industry as it would have failed to evolve and innovate.

The Peter Principle
may have the effect of bringing down an entire organization. However, the
effects may be mitigated before any disruptive effects on the organization. If
you're promoting from within your team or organization, make sure that you're
choosing the person who's best suited for the role, rather than rewarding
someone for past successes. The individual may have performed well in their
current role, but that does not translate to effective performance in a higher-level

Lindah Mavengere
is a Business Consultant at Industrial Psychology Consultants (Pvt) Ltd, a
business management and human resources consulting firm.

LinkedIn: https://www.linkedin.com/in/lindah-mavengere-552b32b2/

Phone: +263 242

Mobile: +263 717 988

Email: lindah@ipcconsultants.com

Main Website: www.ipcconsultants.com

Editorial Team

This article was written by one of the consultants at IPC

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