Thursday, May 27, 2010

What is the Peter Principle in Management?

What is the Peter Principle?
Peter Principle Management is the concept that in bureaucratic organizations, 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, generally management. 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 it very difficult to "demote" someone to a lower rank, even if that person would be a much better fit and happier in a non-management role. The net result of this principle is that most of the management levels of a bureaucracy will be filled by incompetent people, who got there because they were quite good at doing different (and usually, but not always, easier) work than the work they are currently expected to perform.

Further Reading
The Peter PrinciplePeter's Quotations:Ideas for Our TimesAccording to Laurence Johnston Pieter: Work is accomplished by those employees who have not reached their level of incompetence. Thus we can see why organizations still function even as Peter Principled employees accept one too many promotions. Laurence Peter provides an insightful analysis of why so many positions in so many organizations seem to be populated by employees who seem incompetent. This concept is likely to be ignored by most senior managers since to admit one's organization is suffering from this bureaucratic malady is admission that people have been improperly promoted. This, in turn, suggests that senior management might have attained their own level incompetence, and the problem is easily ignored, lest it become suggested that senior management be more closely examined for their incompetence.

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