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Encyclopedia > Peter principle

The Peter Principle is a colloquial principle of hierarchiology, stated as "In a hierarchy every employee tends to rise to his level of incompetence." Formulated by Dr. Laurence J. Peter in his 1968 book The Peter Principle, the principle pertains to the level of competence of the human resources in a hierarchical organization. The principle explains the upward, downward, and lateral movement of personnel within a hierarchically organized system of ranks. The Peter Principle is a BBC television show about a branch of the fictional County and Provincial Bank. ... Hierarchiology is the social science concerned with the basic principles of hierarchically organized systems in the human society. ... Wikiquote has a collection of quotations related to: Laurence J. Peter Dr. Laurence J. Peter (September 16, 1919 - January 12, 1990) was an educator and hierarchiologist, best known to the general public for the formulation of the Peter Principle. ... Competence is a standardized requirement for an individual to properly perform a specific job. ... This article or section is in need of attention from an expert on the subject. ...



The Peter Principle is a special case of an ubiquitous observation: anything that works will be used in progressively challenging applications until it causes a disaster. This is "The Generalized Peter Principle." It was observed by Dr. William R. Corcoran in his work on Corrective Action Programs at nuclear power plants. He observed it applied to hardware, e.g., vacuum cleaners as aspirators, and administrative devices such as the "Safety Evaluations" used for managing change. There is much temptation to use what has worked before, even when it may exceed its effective scope. Dr. Peter observed this about people.

On the personal level, the Peter Principle's practical application allows assessment of the potential of an employee for a promotion based on performance in the current job, i.e. members of a hierarchical organization eventually are promoted to their highest level of competence, after which further promotion raises them to incompetence. That level is the employee's "level of incompetence" where the employee has no chance of further promotion, thus reaching his or her career's ceiling in an organization. This article or section is in need of attention from an expert on the subject. ... A promotion is the advancement of rank or position in an organizational hierarchy system. ... Competence is a standardized requirement for an individual to properly perform a specific job. ...

The employee's incompetence is not necessarily exposed as a result of the higher-ranking position being more difficult — simply, that job is different from the job in which the employee previously excelled, and thus requires different work skills, which the employee usually does not possess. For example, a factory worker's excellence in his job can earn him promotion to manager, at which point the skills that earned him his promotion no longer apply to his job.

One way that organizations attempt avoiding this effect is to refrain from promoting a worker until he or she shows the skills and work habits needed to succeed to the next higher job. Thus, a worker is not promoted to managing others if he or she does not already display management abilities. The corollary is that employees who are dedicated to their current jobs will not be promoted for their efforts, but might, instead, receive a pay increase.

One complication is that competent employees sometimes pretend to be incompetent. The simplest reasons for this might be avoiding the jealousy of co-workers and to annoy managers. A more complex reason might be avoiding promotion to management, i.e. "Creative Incompetence", which is especially common in businesses such as big box retail store chains where managers' base pay is low and they are exempt employees un-entitled to overtime pay. Jealousy typically refers to the thoughts, feelings, and behaviors that occur when a person believes a valued relationship is being threatened by a rival. ... A big box is a box that is big. ... An exemption is a rule or law which excepts certain things from another rule or law. ...

It may often happen for cultural reasons, such as a strong identification with the working class leading someone to remain in a working-class job rather than "selling out" or the disdain highly-skilled workers have for management decisions, leading them to avoid management jobs. Companies practicing performance improvement find that employees will deliberately "leave room for improvement" by starting at less than peak effectiveness and reach full productivity later. Employees also deliberately underperform in order to keep quotas and expectations from being set too high. The term working class is used to denote a social class. ... Performance improvement is the concept of measuring the output of a particular process or procedure, then modifying the process or procedure in order to increase the output, increase efficiency, or increase the effectiveness of the process or procedure. ...

A second complication is that entry-level jobs that are detail oriented and restrictive favour detail-oriented workers, yet hinder creative and innovative workers. By definition and necessity, entry-level jobs are the assembly line of an organization, and thus the most creative and innovative employees start in positions of incompetence. The detail-oriented persons are thus promoted over the creative employees. Often these creative employees are incapable of showing their work strengths because of the structured and restrictive assembly line environments, and then are tagged as bad employees.

In reality, creative employees may be more suited to management jobs, but, because they are unable to use their strengths in the low-level jobs they hold, they never rise to management, and the innate flexibility and innovation needed for managing is lost to the company. The end result for an organization as a whole is that the organization will collapse when incompetents in the ranks outnumber the competent, resulting in the organization's inability to produce results.


Peter himself suggested that a way of addressing the problem is by means of class, or caste (social stratification). Let us say that we declare an essentially random selection of people to be of the "boilermaker" caste. In that group, there will certainly be one or two persons who will be excellent boilermakers. Thanks to the lack of social mobility they will reach the top of the boilermaker caste and never be promoted out of it, and so the society in question will always have the services of a few very decent boilermakers — although not necessarily the very best possible. Thus, while social stratification seems dysfunctional, it is actually very functional indeed. In a similar vein, some organisations recognise that technical people may be poor managers, and so provide career paths whereby a good technical person may eventually make as much money as a good manager — a reversal of the notion that a manager must always make more money than his or her subordinates. Caste systems are traditional, hereditary systems of social restriction and social stratification, enforced by law or common practice, based on endogamy, occupation, economic status, race, ethnicity, etc. ... In sociology, social stratification is the hierarchical arrangement of social classes, castes and strata within a society. ... Social mobility or intergenerational mobility is the degree to which, in a given society, an individuals social status can change throughout the course of his or her life, or the degree to which that individuals offspring and subsequent generations move up and down the class system. ... This article does not cite any references or sources. ...

Although written in a lighthearted manner, Peter's book contains many real-world examples and thought-provoking explanations of human behavior. Similar observations on incompetence can be found in the Dilbert cartoon series (such as The Dilbert Principle) and in the movie Office Space. Dilbert (first published April 16, 1989) is an American comic strip written and drawn by Scott Adams. ... The Dilbert Principle refers to a 1990s satirical observation stating that companies tend to systematically promote their least-competent employees to management, in order to limit the amount of damage that theyre capable of doing. ... Office Space is an American comedy film written and directed by Mike Judge. ...

In 1981 Avalon Hill made a board game on the topic titled "The Peter Principle Game." [1] Avalon Hill was a game company that specialized in wargames and strategic board games. ...

See also

The Dilbert Principle refers to a 1990s satirical observation stating that companies tend to systematically promote their least-competent employees to management, in order to limit the amount of damage that theyre capable of doing. ... It has been suggested that Management system be merged into this article or section. ... Parkinsons Law states that work expands so as to fill the time available for its completion. ... Negative selection, in politics, is a process that occurs in rigid hierarchies, most notably dictatorships. ... Organizational studies - an overview Organizational development Management development Mentoring Coaching Job rotation Professional development Upward feedback Executive education Supervisory training leadership development leadership talent identification and management individual development planning 360 degree feedback succession planning Skills management performance improvement process improvement job enrichment Training & Development managing change and also change... This is a list of adages named after people (eponymous adages). ... The software Peter principle is used in software engineering to describe a dying project which has little by little become too complex to be understood even by its own developers. ... Systemantics is a book by John Gall in which he proposes several laws of systems failures. ...


  • Dr. Laurence J. Peter; Raymond Hull (1969). The Peter Principle: why things always go wrong. New York: William Morrow & Company, Inc., 179 pages. 
  • Dr. Laurence J. Peter; Raymond Hull (1970). The Peter Principle. Pan Books. ISBN 0-330-02519-8. 
  • Lazear, E. (2001). The Peter Principle: Promotions and Declining Productivity. Working Paper 8094. NBER.

The National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan research organization dedicated to studying the science and empirics of economics, especially the American economy. ...

External links

  Results from FactBites:
Adage - Wikipedia, the free encyclopedia (753 words)
Some adages, such as Murphy's Law, are first formulated informally and given proper names later, while others, such as the Peter Principle, have proper names in their initial formulation; it might be argued that the latter sort does not represent "true" adages, but the two types are often difficult to distinguish.
Peter principle: In a hierarchy every employee tends to rise to his level of incompetence.
Dilbert Principle: In a company, the most ineffective workers are systematically moved to the place where they can do the least damage: management.
  More results at FactBites »



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