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Is The “Peter Principle” a Scientific Fact?

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An old business joke insists that people in an organization are “promoted to the level of their own incompetence.” But studies show that this principle may actually be true.

According to an article from MIT’s Technology Review, the challenge may be due to overly simplistic thinking:

Common sense tells us that a member who is competent at a given level will also be competent at a higher level of the hierarchy. So it may well seem a good idea to promote such an individual to the next level.

The problem is that common sense often fools us. It’s not so hard to see that a new position in an organization requires different skills, so the competent performance of one task may not correlate well with the ability to perform another task well.

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These thoughts come from Alessandro Pluchino and his colleagues from the Universita di Catania, who created a powerful computer simulation of an organization to test this theory. Not only does their model show that people do tend to be promoted to the level of their own incompetence, but that promoting employees at random actually produces better results!

You may have heard this before (but hopefully not from business consultants!) It’s sometimes called the “Peter Principle” from a famous book of the same name. And although the premise is only half-joking, science may be showing that this is actually a fact.

A computer simulation does not constitute absolute proof of a theory about real people in real organizations, but it does present an interesting idea. The way we reward and promote people may not always make sense. The way we conduct key tasks at the office—our workflow—is something which requires careful design and evaluation. If something as important as career advancement has broken workflow, what about routine tasks like processing email, answering the phone, handling client requests, or generating proposals?

As Indianapolis consultants, we’re called upon to help companies figure out how to solve problems as sensitive as making decisions about promotions to those as routine as how to solicit a bid. But every element of business matters. If you need business advice, we’re here to help.

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