The idea that high-level incompetence is inevitable was formulated in the 1969 best-selling book The Peter Principle: Why things always go wrong. Its authors, psychologist Laurence Peter and playwright Raymond Hull, started from the observation that while jobs generally get more difficult the higher up any ladder you climb, most people only come equipped with a more or less fixed level of talent that corresponds to their intelligence, knowledge and energy. At some point, then, they will be promoted into a job they can’t quite handle. They will, as Peter and Hull put it, “reach the level of their own incompetence”. And there they will stay, fouling up operations until they either retire or some egregiously inept act gets them fired.
Promoting the best-performing employees merely takes people out of positions where they are doing well and pushes them upwards until they arrive at a position for which they lack the requisite skills. Their promotion history then comes to an end: the Peter principle wins out.
“The system locks incompetence into place,” says sociologist Cesare Garofalo, one of the authors. “This might happen in any organisation where the tasks of the different levels are very different from each other.”
As he points out, companies often try to avoid this outcome by giving employees extra training before a promotion, in the expectation that this will supply any missing skills. But the new analysis suggests that there may be another way to achieve a similar end: subvert the seemingly inescapable logic that the best should always be promoted, and at least sometimes promote the poor performers too. By removing people from jobs for which they have low competence, such a strategy increases overall organisational efficiency, measured as a weighted average of employee competence, with higher-level positions counting for more.
Of course, such a strategy is not without its dangers. Doing your job badly is all too easy, and a promotion paradigm that obviously rewards underperformance would spell disaster. Garofalo suggests how to work round this problem and still use promotion to release poorly performing employees from jobs unsuited to their skills. “This is obviously counter-intuitive,” he says, “but the best promotion strategy seems to involve choosing people more or less at random.”
“This is a really interesting alternative approach to looking at the Peter principle,” says Rajiv Mehta, a professor of marketing at the New Jersey Institute of Technology in Newark. “But it would turn on its head almost every established theory of human behaviour and would face a multitude of problems.”
Among other things, random promotion seems certain to undermine the morale of staff who work hard at their jobs. “I think you’d have dissatisfied and alienated employees with low commitment,” says Mehta. “They’d be disloyal corporate citizens and from there it’s only a hop, skip and a jump to conclude that there’d be high rates of dysfunctional employee turnover.” A better way to stop people getting locked in jobs they do badly, he suggests, would be the more conventional strategy of regular job rotation.
With no obvious solution in sight, perhaps we should just resign ourselves to being ruled by supposed betters who are in fact hopeless incompetents. At least – and here’s a thought to take into the new working year – it means that when things go wrong at the top, it is most probably a cock-up, not a conspiracy.
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