In theory: All managers are Incompetent

If you are reading this article which means I have managed to catch your attention. To set a context, at times we see professionals frustrated and complain due to stagnation in their profile or role, personally if you ask me it’s time for deep and serious introspection. The answer is in “the peter principal”. so what is peter principal?

In 1969, Laurence Peter and Raymond Hull published The Peter Principle, proposing a farcical theory of organisational dysfunction. The Peter Principle, they explain, is that organisations promote people who are good at their jobs until they reach their ‘level of incompetence’. 

The Peter Principle states that in a hierarchy each employee rises to their level of incompetence. It is the ceiling that every employee will meet at some point in their career. For some this ceiling may be higher than for others. members are promoted as long as they work competently. But, following the Peter hypothesis, sooner or later they will be promoted to a position at which they will be no longer competent (their “level of incompetence”), and there they will remain, being unable to earn further promotions! Peter’s Corollary states that incompetence spreads over the organization since “in time, every position tends to be occupied by an employee who is incompetent to carry out his duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence”.

A research using data on worker- and manager-level performance for almost 40,000 sales workers across 131 firms showed some interesting findings

  1. Promotion decisions place more weight on current performance than would be justified if firms only tried to promote the best potential managers.
  2. The most productive worker is not the best candidate for manager, and yet firms are significantly more likely to promote top front line sales workers into managerial positions.
  3. The evidence also suggests that firms weigh collaboration experience less in promotion decisions than they should if they were trying to maximize managerial match quality.
  4. As a result, the performance of a new manager’s subordinates decline relatively more after the managerial position is filled by someone who is a strong salesperson, but who typically worked alone, prior to promotion. The sales growth of the worker assigned to the star seller was 7.5 percentage points lower than for those whose mangers were previously weaker performers.

Both company and individual should be mindful of this problem, it is very important that companies and individual should acknowledge that they are exposed to this problem or risk which can potentially affect their productivity and performance.

References

Alan Benson, Danielle Li, and Kelly Shue (2016) Promotions and the Peter Principle.

A.pluchino,A.rapisarda,C.Garofalo (2010) The peter principal revisited:a computational study, : http://www.pluchino.it/scienza/talks-html/Peter-Principle-talk.pdf.

Promotions and the peters principal, httpss://voxeu.org/article/promotions-and-peter-principle

Peter principle, : https://en.wikipedia.org/wiki/Peter_principle.

Disclaimer

The ideas, views and opinions expressed in the article represent my own views in my private capacity and not those of any of my current or previous employer, any institutions. The article is a research work based only the limited, dated and open source information. For the sources the statements have been quoted with the authors name. This article is only for the reading pleasure and while I invite the feedback and comments on the article, I will not be responsible or liable to any such comments as the same belong to the responder.