The Peter Principle: Causes and How if affects the workplace

Congratulations on your promotion!!! It is perhaps a message that every employee waits anxiously for. However, is promotion truly a reflection of one’s skill, talent, and hard work? This concept is now called ‘The Peter Principle’. Developed by Canadian educator and hierarchist Laurence Johnston Peter, it is now regarded as a key component of promotions in the workplace, especially for senior roles.

The Peter Principle first came to light when Peter, along with Raymond Hull, a television screenwriter, wrote a book of the same name. So, what is the Peter Principle, and how does it affect a workplace? And is it good or bad for the company? 

The Peter Principle 

In his book, Peter and Hull argued that in a workplace, promotions are based on an employee’s current skills without any regard for whether they have skills required for their future jobs post-promotion. This eventually leads to a person being promoted to a role for which they are not suitable. This is described as the Final Placement where the person is not efficient at his job.

However, before we delve further into this principle, we must first appraise ourselves of one important point. When Peter and Hull wrote this book, they intended it to be satire, which is reflected in their writings. Despite this, the book does raise some brilliant insights about promotions, which stand true even after all these years.

In the book, the authors argued that a person may perform admirably at his current role but is in no way a guarantee that he will be equally competent at his new role. For example, a doctor at a hospital may be excellent at his job performing surgeries and taking care of patients. However, the same doctor could be a terrible director of the hospital, where they also need to be good administrators.

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The authors have stated that not all great followers can become great leaders. Moreover, they also coined two new terms: percussive sublimation and lateral arabesque. These two are considered pseudo-promotions. The former is when the person is promoted but neither his salary nor roles are increased. This is, in fact, a transfer rather than a promotion. In lateral arabesque, a person is promoted and also given a longer job title to make them feel like they have now been given a more important role.

The reason why the Peter principle is prevalent in the corporate sector is because almost all of them have a similar hierarchy. The path to promotion to the upper hierarchy is simple: you join at an entry level where you require technical skills but minimal to no leadership or negotiating traits. However, as one gets promoted, the technical skills take a backseat, and leadership traits gain importance. So, in the long run, a person’s workflow is completely altered.

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Why the Peter Principle is present in the workplace 

There could be many reasons why the Peter principle is present in the workplace. Let’s take one example. Suppose a person has joined a company as a software developer and is passionate about coding. They excel at coding, surpassing all their targets. As a result, they are considered for a promotion to a product manager. However, the new role is more about management rather than actual coding.

In the above example, a person could become dissatisfied with his new role despite the rise in paycheck and position. Such promotions can also kill an employee’s drive, prompting them to lose interest in their job and making them an inefficient worker after the promotion.

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Disadvantages of the Peter Principle 

Decreases organization efficiency 

While competent employees should be rewarded with promotions and a salary hike, this should not come at the expense of their core skills. There are two disadvantages to this: first, such promotions stop employees from performing their core duties, and there is no guarantee of their replacement, so efficiency drops.

Secondly, the person is also inefficient in their new role. For example, a managerial position requires good communication skills for smoother workplace operations. However, a person not adept at such leadership traits will have a domino effect, where every person under there will also be affected, which decreases overall efficiency.

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Decreases innovation in company 

If more people with technical expertise are promoted to managerial roles, it will impact both areas. With more people being promoted to managerial roles, the company now has a person in a role for which he does not have the expertise. We must also understand the difference between acquired and natural skills. While one can always learn new technical skills and traits such as leadership, good communication skills are usually natural and hard to master later in life.

Also, we must understand that the higher in the hierarchy one gets promoted, the more responsibilities one is instructed to have. This means that their actions now impact a lot more people. So, in such a case, having a person not capable of such a role can massively impact the day-to-day workings of a company.

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Can increase attrition rate 

A person dissatisfied with their promotion usually ends up in two ways: either curb their work drive and settle in their new job or look for a job elsewhere. Both cases are not good for a company; however, the second case can cause more harm in the long run as the company starts losing skilled people. This means that their hiring costs then increase massively.

This leads to a situation where the company does not have employees who stay for a long time and get accustomed to the ins and outs of their jobs, which delays projects and reduces efficiency massively.

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Makes work environment toxic 

As mentioned earlier, since the promoted employees are inefficient in their new roles, all those working under them start viewing them as inefficient, which might lead to tensions about why this person was promoted in the first place. This leads to a situation where employee morale decreases. There is a lack of teamwork, and [employees feel resentful toward the one who was promoted].

This also means that the company will find it challenging to attract new talent who would be discouraged by the lack of teamwork and toxicity.

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Leads to poor policy making 

The main job of the upper management at any company is to make policies that determine the direction of the company. And thus, whatever decisions they make have an impact on the entire company. So, having persons who are not suited to such a job can tank the entire culture of the company, In addition, some of these policies are also long-term term, which means that they are in place even if the person who formulated them is no longer in the role 

Also, the company will need to discourage the Peter Principle and promote people who are actually skilled in the role so that they can identify problematic policies and rectify them.

This is why companies are now moving towards Artificial intelligence-backed interview platforms for hiring talented employees suitable for the job. We have got you covered with our state-of-the-art interview tool, BarRaiser. With our software, interviewers can prepare an efficient interview plan for candidates.

Interviewees can use our tool to form a detailed interview plan in a structured interview format. This means that all candidates are judged on the same metric. During the interview, our AI Interview Copilot helps track the interview process. It alerts the recruiter if they have spent too much time on a specific part of the interview, sending them alerts to speed up the process.

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Using BarRaiser, we guarantee you quality hiring that will also bolster diversity and inclusion. BarRaiser is the best AI interview platform that features structured interviews and tools to ensure quality hiring while eliminating biases from the recruitment process. With BarRaiser’s support, you’ll be well-equipped to build a strong team of sales associates who will drive sales and deliver exceptional customer service.