Is Peter also at stake in your organisation?

Within an organization, the Peter Principle can be seen in action when managers use an employee's performance in his current position to assess whether he should be promoted. In other words, because an employee is good at his current job, he is promoted to another position, without taking into account whether he is able to contest the new position.

This is problematic as it means that you end up being promoted above your level of competence. The employee thereby reaches his "level of incompetence". Employees who work at their "level of incompetence" therefore do not perform their work well enough. Therefore, the company's tasks are carried out by the employees who have not yet reached their "level of incompetence".

How to combat the Peter Principle

The best way to combat the Peter principle in an organization is e.g. to implement a policy that makes it legitimate to demote employees to their optimal level of competence. Of course, without them feeling it as a defeat. If an employee is not functioning in a "higher" position, it would be a good idea to let him return to his old position, where he performed very well. In this way, you also fight the Peter principle. However, this requires the manager who made the decision about the mistaken promotion to admit his mistake.

Another solution is to offer your employees a pay rise without simultaneous promotion. Your employees often accept promotions not because of power or prestige, but because of the pay raise that comes with it. If companies are willing to offer large raises for excellent work in the same position, the Peter Principle is averted and the employee can stay in a position he likes and is good at.

Furthermore, as a manager, you can wait to promote an employee until she shows that she has the skills necessary to handle the next job on the career ladder. This means that an employee is only promoted to a managerial position if she shows leadership skills. It follows from this that employees who are enthusiastic about their current job should not be promoted because of their skill, but should instead be rewarded with e.g. a salary increase. Of course, employees must also not be promoted due to a lack of ability. Another corollary is that employees are promoted only after they have received appropriate training. In this way, you can discover e.g. lack of leadership skills before the promotion takes place.

A final method you can use to overcome the effects of the Peter Principle is to hire freelancers. These are typically employed for a shorter period of time, and if they prove not to be competent, it is easier to say goodbye to them than to a permanent employee. . Furthermore, freelancers are typically not part of the organization's hierarchy and therefore cannot be promoted.

In the definitely more satirical end of the book, Laurence Peter explains that a manager who has an incompetent employee has several different options to remove him from the position without firing him. Peter suggests i.a. a so-called "lateral arabesque", which means that you give an employee a longer title with less responsibility. That way, the employee still feels important, but is kept, so to speak, away from flammable material. The same goes for the recommendation that the manager should simply promote the incompetent employee to a position in another department. Likewise with the advice that an employee who does not want a promotion should simply make sure to appear less attractive. According to Peter, this can be done by e.g. putting on a little copious perfume or by regularly parking in the CEO's parking space.