#readwise # Peter Principle - Wikipedia  ## Metadata - Author: [[en.wikipedia.org]] - Full Title: Peter Principle - Wikipedia - URL: https://en.wikipedia.org/wiki/Peter_principle ## Highlights - The Peter principle is a concept in management developed by Laurence J. Peter, which observes that people in a hierarchy tend to rise to "a level of respective incompetence": 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.[1] The concept was explained in the 1969 book The Peter Principle (William Morrow and Company) by Peter and Raymond Hull.[2] (Hull wrote the text, based on Peter's research.) Peter and Hull intended the book to be satire,[3] but it became popular as it was seen to make a serious point about the shortcomings of how people are promoted within hierarchical organizations. - The Peter principle states that a person who is competent at their job will earn a promotion to a position that requires different skills. If the promoted person lacks the skills required for the new role, they will be incompetent at the new level, and will not be promoted again.[1] If the person is competent in the new role, they will be promoted again and will continue to be promoted until reaching a level at which they are incompetent. Being incompetent, the individual will not qualify for promotion again, and so will remain stuck at this final placement or Peter's plateau. - Companies and organizations shaped their policies to contend with the Peter principle. Lazear stated that some companies expect that productivity will "regress to the mean" following promotion in their hiring and promotion practices.[9] Other companies have adopted "up or out" strategies, such as the Cravath System, in which employees who do not advance are periodically fired. The Cravath System was developed at the law firm Cravath, Swaine & Moore, which made a practice of hiring chiefly recent law graduates, promoting internally and firing employees who do not perform at the required level.[citation needed] Brian Christian and Tom Griffiths have suggested the additive increase/multiplicative decrease algorithm as a solution to the Peter principle less severe than firing employees who fail to advance. They propose a dynamic hierarchy in which employees are regularly either promoted or reassigned to a lower level so that any worker who is promoted to their point of failure is soon moved to an area where they are productive.