The Peter Principle is a concept in management developed by Canadian educator Dr. Laurence J. Peter and co-author Raymond Hull in their 1969 book, The Peter Principle: Why Things Always Go Wrong.
The principle states that:
“In a hierarchy, every employee tends to rise to their level of incompetence.”
Key Concepts
- The Promotion Mechanism: Employees in a hierarchical organization are promoted based on their success and competence in their current role.
- The Rise to Incompetence: This process continues until an employee is promoted to a position where they lack the necessary skills, aptitude, or competencies to perform effectively. They have reached their “level of incompetence.”
- The Final Placement: Once an employee reaches this level, they are typically not promoted further (since their performance is no longer satisfactory) and are rarely demoted or fired (as their prior competence earned them the position). They remain “stuck” in this final, incompetent placement, which Dr. Peter called “Peter’s Plateau.”
- The Corollary: This dynamic leads to Peter’s Corollary: “In time, every post tends to be occupied by an employee who is incompetent to carry out its duties.”
Example
A common example illustrates the disconnect between skills:
- Competent Individual Contributor: An excellent and highly productive engineer is rewarded for their technical skill with a promotion.
- The Next Level: They are promoted to Engineering Manager.
- The Disconnect: The new role requires entirely different skills—leadership, conflict resolution, budgeting, and performance management—which the engineer may not possess.
- The Result: The former brilliant engineer becomes an ineffective manager. Their performance is unsatisfactory, and they are now stuck at their level of incompetence.
The core problem, according to the theory, is that the skills that lead to success in one role are often not the skills required for the next, higher-level role.