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Paul Carter

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Is the ‘Peter Principle’ on your risk register?


When Peter Parker became Spider-Man, his Uncle Ben warned him that “with great power comes great responsibility”. After a steep learning curve, Peter grew into his superhero role to save the day and reboot a multimillion pound franchise.  

Unfortunately ‘Peter Principle’ had no wise uncle to warn him that without the skills or aptitude to excel in a senior role, chasing money and success can lead to isolation and blame for a failing team or organisation. With the wrong people in the wrong posts, an organisation’s plans for business growth may be little more than a cinematic fantasy.

The Peter Principle management theory, formulated by Laurence J. Peter, suggests that employees continue to rise in a hierarchical organisation until they reach a level of incompetence. Across the organisation, every position will eventually be filled by someone who is not competent enough to succeed in their new post or get promoted, but not bad enough to be fired. A contagion of ineffectiveness that causes stagnation of the talent pool, poor decision-making and reputational risk.

However, this can be avoided by developing effective recruitment, training and appraisal systems. Making the employee lifecycle of attract, recruit, engage, reward and retain or move on the heartbeat of the organisation.

Promote and develop

Steven Collings, Head of Business Intelligence & Analytics at Zoopla, says, “I think there’s some truth in the Peter Principle. If a good analyst is promoted into a management grade because it’s the only realistic promotion available, there is no guarantee they will be as effective. But the real problem is when the move is not followed up with the requisite level of training and support to help them deliver in their new role, which is often the case in organisations that do not invest in talent development.”

Know what you need before you recruit

In CIPD’s Developing Skills for Business Leadership, HR expert Lesley Mearns says the ‘war for talent’ is becoming significantly more important in ensuring both current and future organisational performance.

Mearns believes that modern managers must have the knowledge and skills to identify what competencies are needed to realise their business strategy before they begin the recruitment process.

The decision to develop or buy in talent may be particularly difficult for organisations with high retention rates and identified skill gaps. They have to balance developing existing employees with recruiting externally to evolve the business and meet performance objectives.

Stay positive and seek opportunities

While loyalty and pride are essential components of the psychological contract, if people cannot see a career path their bond with the organisation may start to weaken. But an injection of fresh blood, organisational restructuring and a business needs analysis can provide opportunities for career progression.

By working with capable leaders and peers, aspirational employees can shape a new corporate vision and put their names on the talent grid for promotion and future leadership roles.

Talk the talk and walk the walk

“People who are effective at making decisions progress up the career ladder better,” says entrepreneur James Caan, who is onboard the McDonald’s UK campaign to drive recognition and promotion of soft skills. According to the cross-industry coalition group, communication and interpersonal skills, teamwork and time and self-management are worth £88bn to the UK economy.

With so much money at stake, organisations have to ensure they invest in people who have the knowledge, communication and decision-making skills to succeed in technical or management roles. However, everyone has their limits.

Professor Nick Holley in CIPD’s Changing HR operating models says,We shouldn’t ask people to operate at a level they simply can’t operate at. We need to help people be the best they can be, not try to get everyone to be something they can’t be.”

So be ambitious, never stop learning and go for promotion as everyone deserves to feel like a superhero at work. But remember what Peter Parker’s wise uncle said about power and responsibility as a company can always be revamped. If you no longer fit the superhero role, someone else will.

CIPD’s perspective on the Peter Principle and promotion (an interview with a CIPD Resourcing Advisor):

Q1) How can companies balance developing in-house talent with recruiting externally to plug skill gaps and improve leadership for now and the future?

CIPD: Now is a good time for companies to take stock of their approaches to talent management and see in the light of changing economic conditions whether any part of their strategy needs to be refreshed. Are they currently developing enough talent in house to meet new roles and responsibilities? Is their brand and attraction strategy bringing in quality talent? How diverse are candidates? Is there anything the organisation can do to open up opportunities to the widest possible pool of talent?

Q2) How can companies combat the Peter Principle if an employee is too good for their current role and wants a new challenge, but is untested at the next level?

CIPD: To combat the Peter Principle employers can give potential promotees aptitude tests specifically linked to the new role. They can also think about providing projects relating to that role to work on while still in their current role. This will help with assessing aptitude, interest and strengths related to the new role before making the new move and will be helpful to both parties.

Q3) Should people be scared of promotion or just go for it?

CIPD: Promotion is not something to be scared of, rather it is a positive reinforcement that you are performing well at work and that your skills are being recognised. However, it is important to think through carefully whether it is the right move for you at this point in your career. Will the new role play to your strengths and provide a positive challenge? If work life balance is important to you how might it impact on that?

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Paul Carter

HR Writer

Read more from Paul Carter

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