Back to Glossary

Definition of Peter Principle:

Identified by Dr Laurence J. Peter, a sociologist, and a business consultant and discussed in detail in his book by the same name, it states that "In a hierarchy every employee tends to rise to his level of incompetence." In other words, when you perform well at work, you will be promoted in the organization’s hierarchy until a point where you can no longer perform well. 

It talks about a workplace reality where employees are promoted based on their current performance and achievements and not for their competency and aptitude for their new role. A common example would be instances where an excellent individual contributor is considered for a managerial position. They may be adept at the technical skills, but managing a team requires a different skill set, which may not be their strong suit, causing incompetency. 

What factors can enable Peter Principle at the workplace?

Most of the entry-level jobs only require technical skills. Companies don’t really focus on their soft skills, as long as they perform their job well. Once they prove their competency at the entry level work, the next step would be to look for advancement in career, in the form of promotion. This promotion is often based on the employee’s performance at their previous level. 

This is a natural progression in every company, which leads to a saturation level where the employee reaches a position where they cannot excel because it is above their competency level. 

How to overcome Peter Principle?