Kelly Keefe, RNMary Smith first learned of the Peter Principle many years ago when she was promoted from her position as an information technology (IT) clinical analyst to director of patient and physician relations as a member of the hospital administration.

A physician that Smith had been working closely with in IT, who often raved about the work she had been doing, ran into her new office. “I think this is an example of the Peter Principle,” he said. “I’m afraid this is a big mistake.” “You mean robbing Peter to pay Paul?” Smith asked (which was certainly also a true statement in this situation). “No,” the physician replied, and then he went on to explain the Peter Principle and how he felt it applied to Smith.

Rising to Incompetence

As readers may already know, the Peter Principle suggests that, “In a hierarchy, every employee tends to rise to their level of incompetence.” While not an original idea, the concept was further developed by Laurence Peter and popularized in a book, “The Peter Principle,” by Peter and Raymond Hull.

It was hard for Smith not to take offense at the suggestion initially, as it seemed to imply that the physician felt she would be incompetent at her new position. While it wasn’t a position she had pursued, the new role was an offer she couldn’t refuse, and she had grown excited about a new challenge. She decided that she would prove that she was not only competent but that she would excel in this new role.

Smith was in the role for three years, and during most of it, she was miserable. She learned a lot, made a measurable difference, and was actually good at what she did. But she loved what she had been doing previously and missed it. When she saw the opportunity for a new position back in IT, she begged to take it, even though it was a manager position, one step down from a director position, and no longer part of the elite club that was hospital administration.

In IT, she was much happier again, and it eventually led down the path to where she is today. As a woman executive in the field of technology, she will be eternally grateful to this physician for bringing the Peter Principle to her attention, because understanding it has allowed her to excel in her organization and her career.

While she was competent in the hospital administration role, any further promotions would likely have led down that pre-defined career path. She feels that not only would she have been more miserable, but probably would have met with her level of incompetence by now.

The Peter Principle in Action

Instances of the Peter Principle happen all the time in the field of technology and other fields as well. A 2018 study by Alan Benson, Danielle Li, and Kelly Shue, “Promotions and the Peter Principle,” looked at 214 companies in the manufacturing, IT, and professional services sectors and demonstrated that promotion of salespeople to managerial positions based solely on successful sales figures did not correlate to successful managers.

In fact, it demonstrated a significant decrease in overall sales among the new manager’s team.
This resulted in a high cost to the company, through the loss of sales from a previously highly successful salesperson, through decreased team performance, and, eventually, through the replacement of the underperforming manager.

Managing for Staff Success

When thinking about the organization as a whole, has management inadvertently set up a career path for staff that sets them up for failure? Do they fill higher-level positions with staff who have the longest tenure instead of those who are the best fit? Is the path linear, based on who is next in line within a certain team instead of looking outside the team? Does management fill roles out of guilt or the thought that they “owe it” to a certain employee to promote them to the next higher position? Do they assume that because someone is good at their current job that they will be good at their next job?

Frequently in technology, those with strong technical skills are promoted into management positions, despite the fact that management relies on a very different skill set. Of course, there are individuals that can be competent at both the technical and people-oriented aspects of the job, but making assumptions on who would be a good manager solely based on technical proficiency would be setting the organization—and that individual—up for failure.

However, if managers bypass someone who might appear to be next in line for a role in favor of someone who is actually right for the role, won’t that cause unrest in the workplace?

It doesn’t have to. Having a culture where people can be assured that the right person will be hired or promoted for every position will actually lead to a happier, more stable organization. After all, it’s said that most people quit a job because of their boss; wouldn’t that imply that hiring the best person to be the boss means most people won’t be compelled to quit?

A Culture to Confound Peter

How can a company create a culture that defies the Peter Principle? Here are some ideas to put into action:
  • Beginning in the interview and hiring process, set the stage that career growth is available for everyone and that promotion is based on the person most qualified for a position, not necessarily on tenure.
  • Encourage staff to think broadly about their careers. When they consider which direction they want to take, suggest they base it on three things: Will they grow? Will they learn? Will they make a difference? Advise them not to base career moves solely on moving up in the hierarchy or where they think they should go. If they are engaged and learning, the promotions will follow.
  • Require each employee to update their resume at every annual evaluation. An updated resume can help refresh the employee’s boss’ memory of the employee’s skills beyond what is in evidence every day.
  • Employers shouldn’t be afraid to talk to their employees regularly about their career paths. If employees say they see their next step as replacing the person they report to, ask them why they feel they would be the right fit for the role. What might be a different path for them? Introduce that concept early on, and help them gain the training or experience needed to move in a different direction.
  • Employers should be honest with staff about what can be seen as their strengths and weaknesses. Steer them toward the path that plays to their strengths, but also provide them with the means to improve their weaknesses.
  • Be open to assisting with educational opportunities beyond the scope of an employee’s current position. One hospital provided reimbursement only for courses taken that directly related to an employee’s current job. What a missed opportunity! If a caregiver or a dining room aide is interested in taking business courses, this person just might be the hidden gem that will eventually be the best executive director the company has ever seen.
  • Ensure that staff know they can talk openly and honestly with their boss. If someone perceives they have been passed up for a role, putting the previous tips in place should mean that they understand why and that they know about other options for career advancement. It is important for employees always to feel that they can come to the boss to discuss areas for opportunity and growth.
Some say the Peter Principle is inevitable, but upward mobility no longer has to mean a level higher on the organizational chart. Management owes it to the organization and to its staff to hire the best person for the job, regardless of who might be perceived to be next in line. Those are the old rules, and today is a new day.
Kelly Keefe, RN, is vice president of community solutions strategy at MatrixCare. Keefe can be reached at