Peter Principle - Overview

Overview

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. 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 to 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 humans.

In an organizational structure, 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 an 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 their career's ceiling in an organization.

The employee's incompetence is not necessarily a result of the higher-ranking position being more difficult. It may be that the new position requires different work skills which the employee may not possess. For example, an engineer with great technical skill might get promoted to project manager, only to discover he lacks the interpersonal skills required to lead a team.

Thus, "work is accomplished by those employees who have not yet reached their level of incompetence."

In addition, Peter suggested the idea of “Super-Competence” in an inappropriately low position. He proposed that this employee will have two paths dependent upon his leadership. Competent People Managers will promote this employee for the betterment of the company. Incompetent People Managers will most likely feel intimidated and/or threatened by this employee. This employee is a disruption to their perceived natural order and will almost certainly drive them to set this employee up for failure and/or dismiss him. Organizations with poor leadership cannot handle this type of disruption to their hierarchical structure. A Super-Competent employee “…violates the first commandment of hierarchical life with incompetent leadership: the hierarchy must be preserved…”