Peter Principle UP205

The Peter Principle is a concept in management developed by Laurence J. Peter, which observes that people in a hierarchy tend to rise to their "level of incompetence": employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.

The concept was explained in the 1969 book The Peter Principle (William Morrow and Company) by Dr. Peter and Raymond Hull. (Hull wrote the text, based on Peter's research.) Peter and Hull intended the book to be satire, but it became popular as it was seen to make a serious point about the shortcomings of how people are promoted within hierarchical organizations. The Peter Principle has since been the subject of much subsequent commentary and research.

The Peter Principle states that a person who is competent at their job will earn a promotion to a position that requires different skills. If the promoted person lacks the skills required for the new role, they will be incompetent at the new level, and will not be promoted again. If the person is competent in the new role, they will be promoted again and will continue to be promoted until reaching a level at which they are incompetent. Being incompetent, the individual will not qualify for promotion again, and so will remain stuck at this "Final Placement" or "Peter's Plateau."

This outcome is inevitable, given enough time and enough positions in the hierarchy to which competent employees may be promoted. The "Peter Principle" is therefore expressed as: "In a hierarchy, every employee tends to rise to his level of incompetence. "This leads to Peter's Corollary: "In time, every post tends to be occupied by an employee who is incompetent to carry out its duties." Hull calls the study of how hierarchies work "hierarchiology."