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Management Theory

Peter Principle

Classical Management Theories

The Peter Principle is a concept in management theory holding that members of a hierarchical organization are promoted based on their success in their current role until they reach a position for which they are no longer competent, at which point they stop being promoted and remain in that role. Formulated by Laurence J. Peter and popularized in his 1969 book of the same name with Raymond Hull, the idea uses satire to describe a real pattern observed in bureaucratic and corporate hierarchies, where promotion criteria reward performance in a prior job rather than the skills a new, higher position actually requires. The concept has become a widely cited shorthand in discussions of organizational competence and hierarchy design.

Facts
Core Claim
People in a hierarchy tend to rise to a level of respective incompetence, because promotion is based on success in a prior job rather than on the skills the new job actually requires. 1
Origin Year
1969 1
Classification
Topic (Functional Area)
Human Resources 1
Connections

Critiqued Here

The Peter Principle is a satire of hierarchical promotion in bureaucratic organizations, routinely taught as a critique of Weberian bureaucracy.

Associated With

Cravath System, Management Theories

The Cravath System's up-or-out promotion structure is cited in management literature as an organizational design response intended to avoid Peter Principle dynamics.

Source Wikipedia, Peter Principle
Sources
1. Wikipedia, Peter Principle
Wikipedia
  • Wikipedia, Peter principle lead section
    employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.
  • Wikipedia, Peter principle lead section, second paragraph
    The concept was explained in the 1969 book The Peter Principle (William Morrow and Company) by Laurence Peter and Raymond Hull.
  • Introduction, functional area topic classification
    The Peter principle is a concept in management developed by Laurence J.
  • Associated With: Cravath System
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