The Peter Principle Tested | Alex Tabarrok

• To assign the suitable person to the managerial role.
• To motivate workers excel in their current roles.

However, If firms promoted workers on the basis of managerial potential rather than current performance, employees may have fewer incentives to work as hard.

Workers can be rewarded through incentive pays without the need of promoting them. Firms will be able to promote a more competent worker suitable for the managerial role that could entail larger teams.

There are also leading companies who used split career ladders allowing their worker to advance as individual contributors. This practice recognize workers for succeeding in one area without transferring them to another.