The Peter Principle: Why Are There So Many Bad Bosses?

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In 1969, a professor of educational sciences at the University of Southern California formulated a principle that contained one of the reasons for the existence of bad bosses. He called this principle the "Peter Principle."

The incompetence of certain bosses, their lack of resolution when making decisions or their inability to coordinate teams leads many to wonder when someone reaches their highest level of ineptitude. This is what is known as the Peter principle, a principle coined by Laurence J. Peter.

Will good employees really make good bosses? Will they have the skills to manage a team? Will they behave like good administrators? Will they have the necessary empathy and leadership? How much damage can the incompetence of a good employee promoted to boss cause by a wrong decision?

Let's take a closer look at this interesting principle!

Good employees, but bad bosses

Two authors thought deeply about how dangerous it can be for an organization to promote certain employees. We are talking about Laurence J. Peter, an educator and psychologist by training, and the playwright Raymond Hull. In their work "The Peter Principle" they came to say that a good worker does not necessarily have to be a good boss. Furthermore, a competent employee can end up being an incompetent boss. This is what is known as "Peter's principle."

Thus, it can happen that employees go up steps in the hierarchy, subsisting on each step they climb, to finally reach a level in the ladder where they are stuck by their own incompetence. In other words, according to the "Peter Principle", employees perform their jobs correctly until they are promoted to a certain level where they end up becoming incompetent.

Both Hull and Laurence J. Peter speak without mincing words in their work, charging the ink against the administration and bureaucracy that end up weighing down business organizations. In fact, both include a number of concepts related to incompetence that are worth explaining.

Among them we find the following:

  • Hypersyphobia: This is the fear that can beset a manager when faced with brilliant employees with talent for management.
  • Laughing inertia: Lacking the ability to carry out their work, there are those who resort to humor telling jokes.
  • Sway syndrome: It refers to the ineptitude at the time of making a determination.
  • Creative incompetence: It consists of avoiding promotion by being satisfied in a certain job position. To do this, the worker will try to make his superiors see that he is not the right person to be promoted.

As we can see, a rigorous study that shows us many aspects related to the world of business and management.

To what extent is the Peter Principle true?

It is frankly difficult to determine if the "Peter Principle" is a general reality in all companies.

Each organization has its peculiarities and the templates of the different companies are hardly comparable with each other. To all this must be added that in order to verify this assumption, it is necessary to access internal information that companies will surely not want to reveal.

Now there is a really interesting study on the question raised by Hull and Laurence J. Peter. This is the research carried out by Alan Benson, Danielle Li and Kelly Shue. To do this, these three economists used data from more than 200 business organizations that brought together 53,000 workers and included about 1,500 promotions. In this way, they had a good sample to analyze what happened with the personnel that made up the sales force of the companies.

Well, when studying the figures of the sellers, they had information that allowed them to draw conclusions. Thus, it was considered that good salespeople could advance in the company, and thereby gain positions in the ladder. And, there was a belief that a good salesperson is the right person to lead a team.

Indeed, the most talented salespeople had greater opportunities to be promoted. However, the study showed that a successful salesperson didn't have to be a talented boss. Proof of this is that effective salespeople weren't so brilliant when they took the helm. The data that demonstrates this idea is that these salespeople promoted to bosses affected around 6% the performance of their subordinates.

Therefore, it can be concluded that the companies suffered double damage. They ran out of their best salespeople and promoted them to a degree of incompetence where they served as unskilled bosses. A study that, although it can be perfected, is fairly representative after the study cited above.

What reasons explain why a good employee ends up being a bad boss?

Being a boss requires numerous social and administrative skills, among which we can mention leadership, empathy, the ability to motivate teams, and talent for management and administration.

Although salespeople were used to working in front of the public, dealing with people, they used to operate alone, without coordinating teams. Hence, they were not exactly effective when having to manage groups of workers.

Unfortunately, it is a fairly common reality that internal promotion processes result in unskilled managers. For this reason, companies that continually bet on this type of internal promotion end up perpetuating incompetence in their structures.

Thus, the promotion of personnel ends up taking place more on the basis of tradition than on the basis of competition for a managerial position.

How can we combat the Peter Principle?

It is true that many employees see something truly attractive and motivating in the possibility of achieving a promotion. The assumption of new responsibilities is also accompanied by better remuneration and the possibility of achieving greater professional development.

So if according to the "Peter Principle" internal promotion is harmful to companies, should the possibility of promoting employees be eliminated? Would we run the risk of demotivating workers by not having the option to promote in the company?

The truth is that there are several alternatives available to business organizations. One of them would be to reward good employees not with a promotion, but with better remuneration in recognition of their good work. The second option would be to train selected workers for managerial positions, while the third way would mean resorting to so-called creative incompetence. Let us remember that creative incompetence consists in workers making their boss see that they are not qualified to be promoted.

Be that as it may, in short we must point out that each company is different. In this sense, we can complement the selection of internal candidates for a vacancy in a management position, with the selection of external profiles. Likewise, those ways mentioned by the authors of the study, such as training these employees in managerial skills, could reduce the risk of harm that makes companies fear to suffer this interesting principle that today, in Economipedia, we explain.

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