The “Peter Principle”
The Peter Principle concept was introduced Canadian sociologist Dr. Laurence Johnston Peter in his humoristic book of the same title. In his book, he describes the pitfalls of the
bureaucratic organization witnessed during his extensive research into business organizations.
This follows from the use of promotion as a reward for success. As long as a person is competent in his current position, he will be promoted to the next higher one. By iteration, the only way a person can stop being promoted is to reach a level where he is no longer able to do well, and thus does not appear eligible for promotion.
The theory was set out in a humorous style in the book The Peter Principle, first published in 1969. Peter describes the theme of his book as hierarchiology. The central principle is stated in the book as follows:
In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.
The Peter Principle has attained such renown that The American Heritage Dictionary defines it as “The theory that employees within an organization will advance to their highest level of competence and then be promoted to and remain at a level at which they are incompetent.”
The principle is based on the observation that in such an organization new employees typically start in the lower ranks, but when they prove to be competent in the task to which they are assigned, they get promoted to a higher rank.
This process of climbing up the hierarchical ladder can go on indefinitely, until the employee reaches a position where he or she is no longer competent. At that moment the process typically stops, since the established rules of bureaucracies make that it is very difficult to “demote” someone to a lower rank, even if that person would be much better fitted and more happy in that lower position.
The net result is that most of the higher levels of a bureaucracy will be filled incompetent people, who got there because they were quite good at doing a different (and usually, but not always, easier) task than the one they are expected to do.