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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, @08:05PM

    by Anonymous Coward on Friday June 15 2018, @08:05PM (#693678)

    If you are in charge of a hierarchy and you want to keep competent people working at jobs they can handle, then you impose a caste system where you formally or informally place a ceiling on how far people can be promoted no matter how good they are at what they do. And this is definitely operating: Most organizations will not promote the best techie in their organization past the team lead or senior architect level under any circumstances. The odds of the best retail associate in existence getting past store manager is approximately zero. And so forth.

    This is similar to what I have seen happening, but I think for other reasons. First line managers that seem to have stumbled into their jobs by accident, and are exposed to barrages of unrealistic expectations by their superiors and no domain knowledge of the matter they are managing. No way for them to build a career if they want to, because everybody on top is likewise trying to stay in their comfy jobs. And if they want to stay comfortably where they are, they need to keep the shit from above flowing downward, while taking credit when their team succeeds. Headcount is important for status, so even incompetents can stay on as long as the other team members can pull his weight. If someone on the team is career-minded, busy work is piled on him, because 1) he could be a threat to the manager's position, 2) he may not do well in his new responsibilities, and 3) the rest of the team may refuse to accept his leadership role.

    In jobs out of the trenches, I have seen more acceptance to letting someone try out a job with greater responsibility, with the caveat that he gets canned after a year of unsatisfactory performance.