A Management Theory Flashback – The Peter Principle

by Stacey Lett, Director of Operations – Eastern U.S. – Proactive Technologies, Inc.

In 1979, a book written by Raymond Hull entitled “The Peter Principle”  was a topic of conversation around the water cooler (the precursor to today’s bottled water and a euphemism for a meeting place in the office for casual conversation and gossip…for those young enough to have missed the expression). It lasted throughout the 1980’s and early 90’s. College courses in organizational development and management theory mentioned it in passing, but for most of us its meaning and significance might have been misunderstood.

Although there is a basis of overlap, this is not to be confused with “The Dilbert Principle,” a 1990’s satirical theory by cartoonist Scott Adams based on a comic strip called “Dilbert.” The Dilbert principle roughly theorizes that companies tend to deliberately promote their least competent employees to management to limit the damage they can do. A more cynical view of contemporary management practices, The Dilbert Principle was a way for demoralized employees to express their perception of seemingly incapable supervisors and middle management with a theory that could be mistaken for one that could easily be produced in higher education after thoughtful research. The word “Principle” acts to give it legitimacy and, in a way, mock sincere studies and theories.

The Peter Principle, however, was the result of a lot of thoughtful research and deliberation. Its conclusion was that in an organization’s hierarchy, employees tend to be promoted based on success in their prior job or jobs; not necessarily on whether they have the prerequisite skills and relevant experience to succeed in the job to which they are promoted. Eventually, an employee “tends to rise to his level of incompetence.” Peter’s Corollary for an organization unchecked progression of The Peter Principle, is: “In time, every post tends to be occupied by an employee who is incompetent to carry out its duties.”

The citation of The Peter Principle might have been dismissed by management in its day as nothing more of a disgruntled employee’s attempt to criticize management after being passed over for promotion in favor of someone who isn’t known or respected for their work performance, relevant experience or social skills. But sometimes the choice might have seemed the most counter-intuitive choice for the position by many in the department –acting as further evidence that management was actually out of touch with what was going on in the daily work performed.

Upon reexamination, The Peter Principle describes a phenomenon still around today. While some employees are kept in their position solely because they are too good at what they do and would be difficult to replace, many employees are reassigned latterly or vertically to jobs without guidance or support. Some of those seemed to be moved up, around or out before they prove themselves. Especially for management transitions, there seems to be a misguided expectation that if you were fortunate to be promoted to management, there must be a reason. So, with rarely more than an introduction, many managers are shown their desk and wished “good luck.”

For “hourly” workers transitioning to a new hourly job classification, it is critically important to have the tasks to be performed identified and the best practices for each outlined. Otherwise, management should be prepared to suffer from many of these symptoms: worker under-capacity, unrealized work output and consistency, lower quality yield, noncompliance with safety, quality and engineering standards, and conflicts in what is the best practice between shifts. Without structure, even if there seems to be an informal effort by one person to train another, it could be that the person doing the training was trained by someone who only received a partial introduction to what is expected.

Once a person reaches management level, this lack of training structure is more stark – often consisting of some classes or online courses. Most companies do not feel they need structured on-the-job training for hourly employees, but this bias is more pronounced with management positions. It is assumed by many that management jobs cannot be analyzed for the required tasks and best practices; that managers require more “higher order” core skills and abilities that he or she just applies to tasks that come up. While it is true that management activities require higher order core skills, our experience is that if a job that cannot be job/task analyzed, it probably isn’t much of a job in the first place.

A person isn’t hired for management because they are good at math, good with people, have good organizing skills alone. It may seem that way, but they are also expected to apply those core skills in the performance of a unit of work an employer needs done. If there isn’t a best practice procedure for performing these critical tasks, the company probably doesn’t have long before unwanted variables arise in its operation’s performance. Job and task analysis of management positions is approached a little differently to identify all of the prerequisite core skills, but core skills cannot be honestly identified if there isn’t a procedural step to tie it to.

One Proactive Technologies, Inc. project involved the job/task analysis of 4 mid-management job classifications for a major automobile manufacturer, and the development of a structured on-the-job training program for each – from job description to performance evaluation and everything in between. Each area’s subject matter expert premised their help on the idea that their job classification couldn’t be analyzed; that it was too complex. Within the first two hours of the analysis – the development of a job hierarchy (task listing) that included at least two pages of routine tasks – that perception dramatically changed. After the first task was analyzed for the best practice procedure and all the required components, each manager was not only on board but enthusiastically helped to analyze the rest of their job classification.

When the job/task analysis was over and the materials to support a deliberate structured on-the-job training program were developed and assembled (only days following the analysis using the PROTECH© software system), the results were presented to upper management. After our briefing there was a quiet, but pleasant, surprise expressed by the audience. One supervisor who participated in the project said to upper management “I wished you had done this before I was hired. I was just shown my desk and given the human resources office extension if I had questions. I didn’t know what I didn’t know, or what I should know. I didn’t even know where to pick up the payroll checks to distribute each week or what to what to do with a check if the employee was on vacation. I could have been a better leader, sooner.” In unison, the other project participants nodded in agreement.

At that moment, The Peter Principle from many years prior seemed relevant. Most everyone who came in contact with it might have drawn the wrong conclusion as perhaps the theorist did. Promotion to levels of potential failure was not due to upper management’s negligence or incompetence, it was because of their lack of understanding of the nature of work, perhaps mixed with a bias of “title and privilege;” that anyone selected for promotion to the higher level must have been selected correctly, or the notion that “I didn’t receive any structured training when I was promoted and I did just fine. Sure I made many inevitable mistakes along the way – many of them known by my peers but warnings were never passed on. But finally after years of trial and error I feel I can do everything that is known to be expected of me.” The operative words here is “known” and “passed on.”

This leads to another discussion that management should be having, “did anybody capture the tribal knowledge gained by our workers in case they leave us? Does anyone else know how to run that machine, process that order or repair that equipment?” However, that is a column in itself.

Even though The Peter Principle faded from my memory after I graduated from college, not having given it much attention at the time as to its significance, my experiences since then has given me a new perspective on the theory. Perhaps The Peter Principle sought only to explain the phenomenon and how to avoid the outcomes by dealing with the nature of humans, not to offer systemic solutions to mitigate or eradicate it from management practice. It seemed to skip over the obvious, of  how training for the tasks of the new job could have helped a promotion be successful. It is easier to understand the relationship when presented in the right context. The structure of work is not that much different between the hourly and salary positions. It gives me even more confidence in the accelerated transfer of expertise™ solution that Proactive Technologies offers.

If you would like to know how this approach might work at your firm, and how a pilot project may be the best way to introduce this approach to your organization, contact a Proactive Technologies representative today to schedule a GoToMeeting videoconference briefing to your computer. This can followed up with an onsite presentation for you and your colleagues. A 13-minute promo briefing  is available at the Proactive Technologies website and provides an overview to get you started and to help you explain it to your staff.