Very often, salaried or low-profile employees wonder how someone who was a direct partner and eventually gets promoted to a higher position or to a managerial position ends up becoming so incompetent or inefficient. This curious but common phenomenon is referred to as Peter’s incompetence, a concept that was born in the United States in the late 20th century.

Laurence J. Peter ( 1919 – 1990 ), was a pedagogue, teacher and writer of the famous Peter principle, or Peter’s incompetence , whose conceptual basis lies explicitly in the administrative hierarchies in the world of work. That is, the author analyzed the structures and meritocratic methods that promote the promotions of a company or economic organization.

What is the principle of Peter’s incompetence?

As we have pointed out in the introduction, the Peter principle (formally called the theory of the useless boss) affirms and denounces the malpractice that commercial companies have in their system of promotion and advancement of the most competent employees. He categorically rejects this idea since, according to his study, this implies the incapacity and lack of resolution skills for a worker who assumes the position of maximum responsible , or of high position with many parts of the organization chart below his position of power.

In other words, Peter’s principle of incompetence poses a paradoxical situation in which the organization functions in spite of the incapacity of the top management.

So far all the above sounds familiar, right? There is a problem that extends to all societies and all business areas, where the business is governed by a pyramidal structure that ends up failing in its attempt to culminate. Qualified workers are mistakenly placed in positions that do not correspond, that do not end up being to their liking or that are directly too difficult.

Why does this phenomenon occur in companies?

According to Laurence, it is inevitable that the peak of our professional career will come to an end. No matter how excellent and privileged an employee may be, the peak will come , for one reason or another, but above all, because the time comes when our skills no longer have the capacity to develop.

Peter himself stated: “in a hierarchy, every employee tends to rise to his level of incompetence . The cream rises until it is cut”. This is the best way to reflect the principle of the useless boss. We all have a limit to our abilities, to withstand pressure, to take on responsibilities and obligations. Often, that model employee overflows when they are moved from their area of operation.

Another very obvious reason is the simple fear of rejecting change. In these cases, it is when a worker refuses to accept that he is not cut out for the job and accepts the offer of his superiors so as not to disappoint them -a contradiction, yes- or not to let an opportunity go by that, a priori, will take a long time to come.

Is Peter’s syndrome applicable today?

We cannot ignore the obvious, nor deny the bigger picture. According to a study by the SEA Business School, there are a number of worrying cases in many prestigious companies, especially in multinationals, where the bad decision of a manager or executive can lead to great economic losses .

However, it seems that this trend is changing, especially thanks to the inclusion of a new and increasingly essential department in a company, Human Resources (HR). Today, experts and economic theorists are almost unanimous in their opinion that this department should be included in their ranks to ensure long-term success.

How to avoid work incompetence?

Perhaps forty years ago Peter’s theory of incompetence had little response at the academic or scientific level, but nothing could be further from the truth. As is often the case with any kind of refutable theory, this one in particular has become somewhat obsolete. To begin with, Lawrence forgot a basic premise in life, both on a personal and professional level, and that is that everything in this life can be learned , at least in theory.

Returning to the previous point, companies invest great efforts in including a human resources team that avoids including unskilled people in the staff. This is a task that used to fall to the boss or manager, who, in general, can draw little from a person’s psychology to know whether they are committed, really motivated or want to promote themselves in the company.

That said, the heads of the HR department can and must reduce the symptom described by Peter’s principle , even resorting to the demotion of an employee promoted to his initial position (which used to be practically a chimera) without having to sanction or dismiss him, which has greatly facilitated the dynamics of internal promotion.

To consolidate promotional success, the firms include highly attractive training packages, motivate employees with more direct involvement in important decisions within the company, reward commitment to language courses or interest of each employee and, in addition, ensure that the hierarchy is horizontal rather than vertical.

Bibliographic references:

  • Faria, J. R. (2000). An Economic Analysis of the Peter and Dilbert Principles. UTS Working Papers. 101: 1–18.
  • Peter, L. J. and Hull, R. (1970). The Peter Principle. Pan Books.