The Peter Principle

Laurence J. Peter is credited as the developer of the Peter Principle. The Peter Principle is a concept that is related to the field of management. The concept was explained in a book titled The Peter Principle in 1969 by Raymond Hull and Dr. Peter.

The book was written as a satire. However, it makes a valid point. Especially regarding promotions in organizations that have a hierarchical structure. It was published in 1969 by William Morrow and Company. The concept is named the Peter Principle after Dr. Peter as it is his research that led to this concept being developed.

What is the Peter Principle?

The Peter Principle is a concept related to management. It states that a person in a hierarchical organization is promoted until they reach a point of maximum incompetence. Essentially, a person who is a good and successful employee is offered promotions until they become incompetent. Unable to excel in the position they have been promoted to.

It is important to remember that Dr. Peter initially wrote this book as satire. However, the concept he has described applies quite aptly to organizations that run on a hierarchical structure. Employees in many businesses are offered positions or promotions based on their work and success. This is based on their current positions rather than on their skills and abilities to manage the new role.

Employees may find themselves expected to demonstrate more or the same success in their new position as they did in their old position. Some people can expand their skill set to demonstrate proficiency in their new role, and as such, they are once again promoted. This process continues until they are no longer able to excel at their new role. Or they begin to show incompetence; this is known as “Peter’s Plateau” or a Final Placement.

The final placement or plateau is the final stop in an employee’s ascension on the ladder of success. They can no longer advance in their hierarchical organizations. They have become incompetent and lack the necessary skill set required to keep advancing. This is a pitfall that almost all employees will fall into, according to Dr. Peter and his principle.

Understanding the Peter Principle

Knowing what the peter principle is, is the first step in understanding the principle. The principle is based on a hierarchical organization in which people will eventually reach a plateau. Due to the fact they are incompetent for the role they have been promoted to. This plateau is something that, according to Dr. Peter, is inevitable because of the structure of these organizations.

That is not to say there are no exceptions that have debunked the idea that the concept is universal. But because there are so many examples that prove the concept is real, you should keep an eye out for it. That way you do not fall, victim.

Many jobs at entry-level require prospective applicants to have unique skills or technical knowledge. The Peter Principle is seen quite often in businesses like technology-based firms. Employees in these companies are promoted to managerial positions despite not having the skills to be productive managers. The reason behind this common occurrence is that many employees in these sectors are hired due to their specific technical skills. They are automatically promoted due to their competence in these areas. Despite not having the ability to work with the same effectiveness as a manager.


A common occurrence in these fields is internal promotions. Many job searchers are drawn to specific businesses due to the possibility of advancement. Rather than the nature of their employment. In many organizations, employees are promoted based on their present performance rather than their suitability for the next one.

Some apparent exceptions to the Peter principle are the promotion of people who are already incompetent in their current post and the awarding of a better job title. However, these can easily be debunked as pseudo-promotions. The promotion of someone who is already incompetent in their current post is known as percussive sublimation. As it is done to encourage other employees. Giving an employee a longer job title is nothing more than a lateral push, a way to shove someone to the side.

It is important to realize that the employee may not be solely to blame for the incompetence they demonstrate at their new level.  The employee may simply be ill-equipped to handle their new role due to a lack of skill or experience. An employee may show great success in marketing working under a manager. This does not necessarily mean that they would make a great marketing manager.


Current competence is the basis of promotions in these structures. This is because these organizations’ competence is measured according to employees’ productivity/output. This is recognizable and quantifiable. The issue with this arises when an employee has been promoted to a position in which they are no longer competent, and so their output has dropped.

Some organizations choose to promote another employee in the hopes of them assisting the employee that was promoted initially. Unfortunately, this rarely works as the new employee may also be incompetent in their new post. There is no benefit in two incompetent people working with each other as neither is capable of working in their new role.

For employees like this, their value as an employee is measured differently. The measure of these employees’ productivity is calculated using their input rather than output. They are evaluated based on punctuality and demeanor.

In fact, according to Dr. Peter, employees that have become incompetent due to being promoted are rarely fired from their post. This is because simply being incompetent is not enough grounds for dismissing an employee. Especially if someone from the business chose to promote them knowing their skill set.

Overcoming The Peter Principle

Knowing what the Peter Principle is and understanding it can be the first step in trying to avoid it. The principle is not 100% inevitable. But there are things that you can do to reduce or mitigate its effects. Doing this can prove beneficial for the employees and the business as well.

Internal promotion is not harmful in and of itself. It is how and who is chosen to promote internally that can cause issues for everyone involved. When looking to promote internally, it is important to look past a person’s outstanding performance in their current capacity. Because this is what can cause a slip into the peter principle. Evaluate the requirements for the new role and then conduct interviews for all eligible candidates. Select after this process has been carried out. This reduces the chances of promoting someone into a position that they are ill-equipped for.

Technology Fields

For businesses that are technology-based or require employees with unique skills, it may be a good idea to hire people that have managerial capabilities alongside these skills. This allows you to carry out internal promotions without having to promote someone who lacks the necessary skills to lead. You would be able to maintain an employee with greater technical prowess and still have someone in a managerial position. Reward your employees with technical skills in different ways, such as pay increases or bonuses rather than promotions.

Seek training if you have already been promoted to a new and more challenging position. There is a possibility that the person that has been promoted has the capabilities to excel. They may simply require assistance. By asking for feedback from their seniors and training in their role. This may help them avoid becoming incompetent in their new role. If, however, after these efforts, an employee still feels incapable of the role, they should be encouraged to ask to return to their previous position.

Positive Demotions

Using a demotion procedure that is not associated with failure. Assume an employee has been promoted to a position for which he is unqualified. In this case, the firm management has the option of returning the employee to his previous job. The person who made the bad choice to promote the employee, on the other hand, must confess that he made a mistake. This prevents employees from staying in positions where they are incapable of success and unhappy and places the weight of responsibility on the shoulders of those that promoted the employees initially.

Another way to avoid the Peter Principle is to pay employees more without necessarily promoting them. Most employees are ecstatic about the prospect of promotion, not because of the authority or status that comes with it, but because of the financial rewards that come with it. To avoid a repeat of the concept, business owners could raise their employees’ pay in recognition of their operational excellence in their respective positions. Every employee may make enough money while remaining in a job where he is competent in this way.

Lateral Arabesque

Managers should get rid of inept staff without firing them, according to Dr. Peter. To put it another way, a CEO can transfer an ineffective employee to a job with a larger title but fewer duties. The technique was dubbed a “lateral arabesque” by Dr. Peter. The promoted employee will remain unaware that he has been sacked from the position to which he was promoted.

Outsmarting one’s boss is another technique to get around the Peter Principle. If an employee is aware of his or her limits, for example, they can do everything possible to avoid being considered for a job in which they would be inept. This style was coined by Dr. Peter as “creative incompetence.”

Are You a Victim of the Peter Principle?

There could be a chance that you are a victim of the Peter Principle. If you neither wanted or asked for the position you received. Find that now you are struggling to meet the requirements of this new position, you may have fallen victim to the Peter principle.

Even though you were productive and happy at the position you were in, and you had been excelling at it for a long time, you are finding that the new position you are in is just beyond your capabilities. You have done your best by attending workshops and training to become competent at this new post. But, regardless of your desire, you find no joy and find yourself unable to excel in the position.

Another way in which you may have become victim to the Peter principle is that you have found yourself in a position that is far too stressful for your mental health. Due to your past performance, you felt you deserved a reward. The reward you needed was not, however, a promotion. The new role you are in is proving to be a failure for both you and the business. Then you may have become another victim of the peter principle.

What to Do if You Think You Are a Victim of the Peter Principle

If the Peter Principle has you stuck in a position you do not feel qualified for there is hope. The key is to find a coach or group that will act as a sounding board for you to test potential ideas on. The great news is you have found both. If you want specific coaching Contact Me and if you are looking to become part of a group that can help you claim your spot as a RE:MIND Insider below and never miss a thing.

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Aaron Jarrels

I am focused on helping anyone who wants to expand their reach. I help people overcome their limiting beliefs and show them how to gain the confidence to eliminate imposter syndrome that hinders success. I specialize in assisting people with shifting their mindsets and help them master the skills necessary to achieve professional and personal success.