The Peter Principle

Just before the more prestigious Nobel Prizes for 2010 are announced, the Ig Nobel Prizes were handed out this week by the editors of the Annals of Improbable Research.  These cheeky awards recognize studies of unusual topics or common-sense conclusions.The biology prize, for instance, went to a group that documented fellatio in bats.

This year’s prize for management went to a paper from a physics journal that applied computer science to the Peter Principle. The Peter Principle states that people in the workplace are promoted until they reach their level of incompetence. Supervisors tend to promote people who are good at their jobs, but then they are put in a new position for which they may not be as well suited.

The paper’s authors simulated this with a computer program that promoted the best performers. Soon, the organization was operating inefficiently. But when the computer promoted people at random, workplace efficiency improved. This paradoxical result may warrant an Ig Nobel Prize, but it also holds a striking lesson for managers who try to balance the development of individual talent with the goals of the entire organization.


One Response to “The Peter Principle”

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