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The Peter Principle, a great management tool | ToolsHero

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The Peter Principle, a great management tool | ToolsHero
What is the Peter Principle? The Peter Principle states that in a hierarchy each employee rises to their level of incompetence. It is the ceiling that every employee will meet at some point in their career. For some this ceiling may be higher than for others. Read more

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Promotion of Position = Demotion of Value

Promotion of Position = Demotion of Value

When a person is promoted, they usually turn to different responsibilities and roles which requires completely different skills and insights.

Later on, the company will notice that they made ...

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Experience is not everything

Experience is not everything
Experience is a good thing, but this does not automatically make an employee the best person to be promoted to a more responsible job.

Before promoting an employee, the comp...

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SIMILAR ARTICLES & IDEAS:

The Peter Principle

It describes what can happen when an employee does well in one job and is subsequently promoted. She/he does well in the new role and is promoted again. This continues up and until the em...

Avoiding the Peter principle

  • Commit to continuous learning: heading off to a career thinking you’ve learned all you needed to know for the next 40-50 years is a sure way to find yourself stuck in a position you cannot move beyond;
  • Be mindful of what you are good at: there are certain career fields each of us know we are not best suited for.

Responses to the Peter Principle

"Women and minorities were exempted from the idea because they often weren’t promoted despite their competence and so didn’t get the chance to r...

A Reverse Peter Principle

Most managers address the bad boss problem by getting out of the subordinate role as quickly as possible and, by improving their own leadership skills, becoming a good boss.

Incompetence is Everywhere

Incompetence can also be seen on how subordinates deal with their bosses.

Workers feel anxious on how their bosses think about them. Should I correct my boss? Does he think of me as a competitor? Am I capable enough? Should I take an action?

Of course, everyone would think of those question before making a move. But a wise subordinate know can recognize that a boss does not know what he needs and the best thing to do is address their suggestions to the boss. Why? Because the boss is the one with the greater power to act.

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The Peter Principle

The Peter Principle

It refers to an observation wherein people who perform well in their job gets promoted until eventually, they will reach a stage where they are incompetent for that job.

The Evidence for the Peter Principle

A study looked at promotions and performance of some 40,000 sales workers across 131 firms.

It showed that the best salespeople as measured by sales revenue are more likely to be promoted (top figure) but their value added as managers actually declines in their sales revenues (bottom figure).

The "Purpose" of Promoting Workers

  • 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.

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