Peter Principle – how to explain how wrong people got into the wrong places in your organization
“In a hierarchy every employee tends to rise to his level of incompetence”
The Peter Principle is a special case of a ubiquitous observation: anything that works will be used in progressively more challenging applications until it fails.
In simple words, it is book by Dr. Laurence J. Peter and Raymond Hull published in 1969 named “The Peter Principle”.
Based on their experience and observations they stated that people and managers are being promoted because they are doing very good job on their current position.
Lets say you are working in factory building furniture. You are one of the best employees, very passionate, meeting targets and always giving this extra. After some time you are noticed and promoted as team leader. Leading the team of people like you who are building furniture. You finding areas where you can improve certain processes, you are communicating with your team brilliantly. So after couple of months or years you are being promoted again to be supervisor of whole floor. Again you finding it intresting, you are passionate because you are able to make everything better and you are still “in-touch” with very heart of the business. Then again for your achievements you are being promoted as vice-president. Then your role is slightly different. Dealing with vendors, banks, and investors. Business meetings, strategies, marketing and other stuff in which you are loosing your interest. Also you are not that great at negotiating terms with vendors, you giving away little percentage not realizing that on this level it will result in millions of costs and so on. Just simple examples. So simply you not really doing great job. But you are staying on this position till the end of your days in this company. As you are not being promoted anymore because you are not doing great job anymore. And you will not be downgraded to previous position as someone else is doing it. And that is how company end with people doing bad jobs. Evaluation process that fails.
And that is what he presented in his book and what we call today Peter Principle. Simple path how wrong people are getting into the wrong places in the organization. By wrong I don’t mean bad, simply thir knowledge, experience, abilities and aspirations do not match the position.
source: http://en.wikipedia.org/wiki/Peter_Principle
http://www-siepr.stanford.edu/Papers/pdf/00-04.pdf
