Staff promotion is one of the pillars of organizational management. People expect to be rewarded for their hard work and strive to attain a higher position with accompanying benefits. However, being good at one job does not automatically translate into an excellent performance in a new role, and an employee finds themselves struggling while shouldering updated responsibilities. This phenomenon is called the Peter Principle, which explains why people who are promoted to leadership positions can be incompetent after reaching a level beyond their abilities. Although organizations are aware of the issue, resolving it is not effortless as many factors have to be considered, and such approaches as a lateral arabesque, a lottery, and nihilism are implemented with varying degrees of success.
The Peter Principle can be vividly illustrated using salespeople, whose performance is easy to assess. An organization notices the top-performing employees, who usually comprise 20% but are responsible for 80% of sales, and promotes them to management positions, assuming that they will demonstrate the same efficiency (Gladwell 00:21:40-00:22:43). The higher-ups operate on prediction, which backfires once the newly appointed staff displays incompetence due to the job having different responsibilities and skill requirements (Gladwell 00:19:15-00:19:21). For instance, one can excel at promoting products, but managing others can be challenging, especially when no prior training is provided. Other companies attempt to promote average-performing salespeople with sufficient skills, who tend to perform 30% better, to avoid the issue (Gladwell 00:22:45-00:22:57). However, it causes another set of problems, as the top-performing employees become disappointed after seeing the inferior group rewarded, and their performance subsequently declines (Gladwell 00:23:25-00:24:04). One can probably blame the corporate culture for creating the expectation of promotion, which is responsible for the complex issue. Overall, the Peter Principle refers to a promoted employee’s level of incompetency, preventing them from performing well in a new position.
Several solutions to the Peter Principle are suggested, although they are not without flaws. The first one is a lateral arabesque, which implies giving an employee a longer, fancier title without actually promoting them (Gladwell 00:24:05-00:24:18). It is likely to prevent the feeling of disappointment, as the procedure appears similar to promotion, and they will remain competitive in the familiar position. However, one may eventually realize that the new title essentially means nothing and express indignation, which may lead to more concrete actions. Another solution is using a lottery, which will randomly decide who will have an opportunity to be promoted (Gladwell 00:24:24-00:24:33). A clear advantage is that no one will feel betrayed, as the method is straightforward. Simultaneously, the staff might feel resentment towards the person who won the position and considers their efforts worthless, as they do not translate into a reward. Consequently, the remaining employees’ performance and motivation will be affected. Furthermore, the procedure removes some autonomy from the general manager, whose responsibilities will be questioned (Gladwell 00:24:24-00:24:33). Thus, some of the existing solutions are far from perfect, as one advantage may be overwritten by undesirable consequences.
A nihilistic solution may address the core of the issue. The philosophy behind it is that people are unpredictable, so making guesses about whether one will be successful in another position is pointless (Gladwell 00:36:45-00:37:35). If an organization needs a manager, the most sensible outcome is to hire someone for the job (Gladwell 00:36:45-00:37:35). They are likely to have specialized training in the field, so the issue of incompetence will be removed. The question remains on how to reward well-performing employees, who may still anticipate a promotion. An organization may raise their salaries or offer other benefits, such as store discounts, healthcare bonuses, and more paid days off. The perquisites should reflect the amount of effort an employee devotes to the job, and a grading system appears necessary to maintain fairness. Small companies may take a radically nihilistic approach and disregard one’s skills, hiring people based on personal compatibility (Gladwell 00:25:50-00:25:28). The absence of any expectations from both sides may prove to be fruitful until a new employee happens to be incompetent to the point of ruining an organization (Gladwell 00:25:50-00:25:28). In conclusion, the nihilistic solution is against predictions and expectations.
The Peter Principle is born from the desire to climb the corporate ladder until reaching the very top. The reason is likely to be the drive for better income, which is almost always guaranteed with a superior position. However, no one is prepared to handle all the responsibilities that accompany every new post, regardless of the ambition, and a person eventually faces a role they cannot fulfill properly due to insufficient competence. Some of the discussed solutions include a lateral arabesque and a lottery, which have certain benefits. Unfortunately, they do not consider an employee’s feelings, which may have a significant impact on their performance. Moreover, a general manager’s competence will be questioned after several instances of such practices. The least detrimental solution is to abandon the practice of prediction and replace it with targeted hiring and substantial rewards for hard-working employees. People should remain in the position where they perform the best, which benefits an organization.
Reference
Gladwell, Malcolm. “Hamlet Was Wrong.”Revisionist History from Pushkin, 2020. Web.