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Peter Principlethe principle, formulated by the American management writer Laurence Peter (1919-90), that in organizations people are promoted to the level of their incompetence. Individuals rise through ORGANIZATION hierarchies because job vacancies continually arise and need to be filled. The criteria for promotion is successful performance in current and previous posts. But at some point individuals are promoted to posts which are beyond the range of their abilities. From then on their job performance is characterized by incompetence, and promotion will cease. Individuals thus come to stay in jobs which they cannot adequately perform. Hence the principle that ‘every employee tends to move to their level of incompetence’.
Every organization will contain a number of people in this situation. Indeed, in time ‘every post tends to be occupied by an employee who is incompetent’. Thus organizational performance will virtually always be at suboptimum levels. The Peter Principle is generally viewed as a perceptive and humorous insight into organizational processes rather than as a proposition worthy of empirical investigation.