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posted by martyb on Friday June 15 2018, @02:57PM   Printer-friendly
from the I'm-not-competent-enough-to-judge dept.

Three authors at the Harvard Business Review briefly discuss the Peter Principle by dealing with a quantifiable data set. That principle is the one which states that people are promoted to rise to their particular level of their incompetence. At the end they propose several possible solutions or work-arounds.

The Peter Principle problem arises when the skills that make someone successful at one job level don’t translate to success in the next level. In these cases, organizations must choose whether to reward the top performer with a promotion or to instead promote the worker that has the best skill match with a managerial position. When organizations reward success in one role with a promotion to another, the usual grumbles ensue; the best engineer doesn’t make the best engineering manager, and the best professor doesn’t make the best dean. The same problem may apply to scientists, physicians, lawyers, or in any other profession where technical aptitude doesn’t necessarily translate into managerial skill.

[...] While the Peter Principle may sound intuitively plausible, it has never been empirically tested using data from many firms. To test whether firms really are passing over the best potential managers by promoting the top performers in their old roles, we examined data on the performance of salespeople and their managers at 214 firms. Sales is an ideal setting to test for the Peter Principle because, unlike other professional settings, it’s easy to identify high performing salespeople and managers — for salespeople, we know their sales records, and for the sales managers, we can measure their managerial ability as the extent to which they help improve the performance of their subordinates. The data, which come from a company that administers sales performance management software over the cloud, allow us to track the sales performance of a large number of salespeople and managers in a large number of firms. Armed with these data, we asked: Do organizations really pass over the best potential managers by promoting the best individual contributors? And if so, how do organizations manage around the Peter Principle?

[...] Both solutions can be implemented as part of the performance evaluation process. One approach, embedded in evaluation regimes like the ninebox, asks raters to decouple evaluating future career potential from prior job performance. People who score highly on future career potential can be rewarded with promotion to management roles and stock options to retain them until their potential can be realized. People who score highly on prior job performance can be rewarded with bonuses, promotions up an individual contributor track, or recognition. The process should be designed to recognize and reward excellence in one’s role without necessarily changing one’s role.

Incentive pay, dual career ladders, and thoughtful performance evaluations can recognize that people contribute to the success of the organization in different ways. But it seems that, at least in sales, companies nonetheless reward sales talent by promoting top sales workers into management.


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  • (Score: 0) by Anonymous Coward on Friday June 15 2018, @04:05PM (6 children)

    by Anonymous Coward on Friday June 15 2018, @04:05PM (#693553)

    Everybody (well, all except incompetents) is needed for the company to work. We each have our role to play.
    But it seems you are really complaining about some workers not getting their "fair share" of the rewards: respect, money, etc.
    Your compensation is based on many things, but the biggies are: how much money do you bring into the company -and- how hard is it to find someone who could do your job?
    In the case of cleaning staff, you bring in nothing, and the bar for someone to replace you is can they push a mop? So low a bar that someone with an elementary school education that speaks almost no English who arrived here yesterday from Honduras can do it and start immediately.

  • (Score: 4, Insightful) by Arik on Friday June 15 2018, @05:13PM (2 children)

    by Arik (4543) on Friday June 15 2018, @05:13PM (#693584) Journal
    Your criticism seems more accurate aimed at socialism in general than the specific argument he was using.

    It's tradition, and the nature of our existence as mammals, not capitalism that causes us to place management at the top of each career path. In traditional societies; hunter-gatherer, pastoralist, agriculturalist etc. this generally made sense. Those who were young and strong did the hardest work, if one survived into older age ones contribution would gradually shift to supervision and teaching rather than brute work, more or less as ones physical ability to do such work waned, so all to the best.

    With industrialization and medical breakthroughs and so forth this has all tended to break down though. Old people in traditional societies are rare - most died young. The handful that lived to show grey hairs were valued for their wit and wisdom. Today we have warehouses full of people that have been written off as too old and too ill to do anything useful. Back then, the knowledge needed to supervise was mostly the knowledge needed to teach the job. More and more supervisors are 'resource managers' who may not even really know what the 'units' under them actually do - just when they are to arrive and leave, what they get paid, their scores from QA, etc. It's all much more specialized.

    Some workplaces moreso, some less; there are definitely niches where part of that doesn't apply, but the Peter Principle observation applies to the space outside of those niches. And in that space, when you promote a good worker to management, you all too often lose a good worker and gain a poor manager. Because the skills and even personality needed for the roles just are not the same.
    --
    If laughter is the best medicine, who are the best doctors?
    • (Score: 2) by Thexalon on Friday June 15 2018, @06:10PM (1 child)

      by Thexalon (636) on Friday June 15 2018, @06:10PM (#693622)

      Old people in traditional societies are rare - most died young.

      There were and are lots of hunter-gatherers that live to 70 or so. The 2 major barriers to that depend on your sex:
      - Everybody's at high risk of dying before age 5. Illness, injury, predators, etc. Babies, infants, and toddlers have a really hard time defending themselves and a really easy time doing all kinds of stupid things that get themselves killed.
      - Young women are at high risk of dying when they give birth, particularly to their first child, typically around age 14-17.
      - Young men are at high risk of dying in battle, which in a lot of these societies was around age 15-30.

      Ancient civilizations weren't that different: There are lots of historical figures that made it well past 40. The image of the lives of cave men being nasty, brutish, and short (or even living primarily in caves) is not really in line with either the archaeology or anthropology.

      --
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      • (Score: 2) by Arik on Friday June 15 2018, @08:07PM

        by Arik (4543) on Friday June 15 2018, @08:07PM (#693680) Journal
        "There were and are lots of hunter-gatherers that live to 70 or so"
        "There are lots of historical figures that made it well past 40."

        Indeed there are but it's also quite clear that they were unusual for that fact. As you say, infant mortality was high, and young adulthood was also a time when many died; women in childhood, young men in hunting accidents or conflicts with others. Once someone did get reach what we now think of as middle age, yes, a fair number might then live on several more decades. But the percentage who made it that far was clearly much lower.

        "The image of the lives of cave men being nasty, brutish, and short (or even living primarily in caves) is not really in line with either the archaeology or anthropology."

        That's true, it's not; but no moreso is the romantic image of the noble savage living in perfect health and harmony. "Nasty, brutish, and short" applies more aptly to the lives of the supposedly more advanced agricultural peasants than to the hunter gatherers, that's true, it's good that you appreciate it, but don't jump from one ditch all the way across the road into the other. Relatively good nutrition and constant exercise do make for healthy bodies. But it's also a lifestyle which entails constant risk of injury, and without any real medical care available, many injuries, even ones we would consider minor today, can easily kill you.
        --
        If laughter is the best medicine, who are the best doctors?
  • (Score: 3, Insightful) by JoeMerchant on Friday June 15 2018, @06:47PM

    by JoeMerchant (3937) on Friday June 15 2018, @06:47PM (#693637)

    how much money do you bring into the company

    Which is an impossible metric. Does the head of a project get credit for all the revenue the project team brings in? How is it divided between R&D, Sales, Customer Support, HR, Food Services, etc?

    Generally speaking, I think the people at the top get disproportionate credit for their contributions, primarily because they are the faces that are seen by the next level up. Yes, the head of a project probably does contribute more than a line-worker functionary who participated in it, but... how much? 2x? 10x? 300x? If Cintas is any gauge, assuming they have seven levels of management, each level makes a bit more than twice as much as the level beneath it, on average (2.26^7 = 301), in practice the multiples climb as you climb the ladder, Janitors at 30K, Janitors' managers at 45K, next level at 80K, etc. accelerating to multiples of 3 and 4 nearer the top.

    --
    🌻🌻 [google.com]
  • (Score: 2) by sjames on Friday June 15 2018, @07:14PM (1 child)

    by sjames (2882) on Friday June 15 2018, @07:14PM (#693655) Journal

    Unfortunately, that assessment is usually illogical on it's face. For example, sales is considered a profit center but development and manufacturing are counted as cost centers, as if the sales guys could get anyone to give them a dime if there was no product or service to sell.

    As for cleaning, if the office becomes a festering pit of pestilence, nobody can or will work there.

    As for management, MBAs are plentiful but they still tend to get paid more than the harder to find people they mis-manage.

    • (Score: 0) by Anonymous Coward on Saturday June 16 2018, @01:32AM

      by Anonymous Coward on Saturday June 16 2018, @01:32AM (#693814)

      And if the guy with the key to the building doesn't show up, nobody can get in and start working.
      Does that mean he should get paid the same as the CEO?