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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: 1, Interesting) by Anonymous Coward on Friday June 15 2018, @05:12PM (3 children)

    by Anonymous Coward on Friday June 15 2018, @05:12PM (#693581)

    I worked in a company that had the ceiling. I hit the ceiling. I got passed over for promotion. I complained. They did nothing. I quit about 3 months after being passed over. Before leaving, I found both the job they passed me over for and more money at a competitor. Ceilings are not a good idea if you want to keep the best and those people want promotion.

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  • (Score: 2) by Thexalon on Friday June 15 2018, @05:35PM

    by Thexalon (636) on Friday June 15 2018, @05:35PM (#693600)

    Another observation in the original book (totally worth reading if you haven't) is that hierarchies will tend to get rid of 2 groups of people:
    1. People who are so astoundingly lousy at their jobs that they threaten the hierarchy.
    2. People who are so amazingly good at their jobs that they threaten the hierarchy.

    Attempting to get a well-qualified promotion threatened the hierarchy, so they were fine with letting you go to a competitor.

    And for what it's worth, I pulled the same maneuver at one point in my career, many years ago. I still am happy I did it: Had I stayed, it would have been another 10 years before I had gotten to the same title and salary level I was offered elsewhere, and during those 10 years the division I worked for was shut down.

    --
    The only thing that stops a bad guy with a compiler is a good guy with a compiler.
  • (Score: 3, Insightful) by frojack on Friday June 15 2018, @05:44PM (1 child)

    by frojack (1554) on Friday June 15 2018, @05:44PM (#693606) Journal

    You can also hint that you might quit. Might backfire if they really didn't think you were promotion material.

    Or, do what I did, early in my career: Actually quit, start your own business, become a contractor. (Maybe scout some temporary projects for the near future). Then win contracts with the SAME OLD COMPANY doing your old job as an outside contractor. Its utterly amazing how someone they won't listen to as an employee can have them all jumping through hoops as a contractor. Suddenly your word is golden.

    Side benefit: you get to skip all those diversity training sessions, pointless meetings, and office birthdays. You can get it set up and working the way you want it, then hire some reasonably smart guy to run it while you move on to more interesting things.

    --
    No, you are mistaken. I've always had this sig.
    • (Score: 3, Funny) by aristarchus on Saturday June 16 2018, @02:45AM

      by aristarchus (2645) on Saturday June 16 2018, @02:45AM (#693835) Journal

      You can get it set up and working the way you want it, then hire some reasonably smart guy to run it while you move on to more interesting things.

      Hate to break it to you, froj, but there is a fatal flaw in your dastardly plan. It may even be recursive.