I just read an article in NewScientist about the “Peter Principle” (based on the theory put forth by Laurence Peter and Raymond Hull in their 1998 book The Peter Principle: Why things always go wrong). The Peter Principle is a fundamental law of “Hierarchiology” that states:
In a hierarchy, every employee tends to rise to his level of incompetence.
That is, in any employment situation where upward mobility is possible, employees will be promoted to higher positions as they demonstrate competence at positions lower down in the hierarchy. But, sooner or later, those successive promotions inevitably will land employees in a position they are NOT competent to perform. Employees will then remain there, at “their level of incompetence,” without the possibility for futher promotion. Like water, which always seeks the lowest level, employees in a hierarchy naturally tend toward their specific level of incompetence. That is why, the theory goes, your boss is incompetent.
Lest you think this is just a clever, slightly humorous, justification of workers’ ressentiment, you should know that the Peter Principle has been modeled and has been proven to have theoretical validity. According to those models, it not only IS the case that the Peter Principle holds in hierarchical organizations where the mechanism of promotion is to reward the best employees, but also that it MUST hold; it is unavoidable. The global efficiency of every such organization will always suffer a signifcant reduction because of the Peter Principle.
Given the gross incompetence we’ve seen in the last several years in corporate, political, military and religious “leadership,” the Peter Principle offers a kind of simultaneously welcome and unwelcome explanatory force. And though it does seem counterintuitive at first to claim that a system that promotes employees on the basis of their skill and competence ends up being the least effective, the Peter Principle is helpful in pointing out one significant variable in that equation that we tend to overlook. Namely, the job to which competent and skilled employees are promoted is often quite different (in terms of the skills and competencies it demands) than the job from which they are rising. So, you may be excellent at installing linoleum tile in bathrooms, but if that competence is rewarded by promoting you to a job that requires you to install the bathroom’s indoor plumbing or, worse, to draw up the floor-plans for the whole house, then both you and the company that employs you are quickly becoming the newest casualties of the Peter Principle.
How do we counteract this? The most obvious answer seems to be to keep employees at the level of their greatest competence, to disallow them from crossing that invisible line between things they can do and things they cannot do. But, alas, how do we know where that line is until it is crossed? Pluchino, Rapisarda and Garofalo (the physicists who did the modeling of the Peter Principle) concluded that the only way to avoid its deleterious effects would be either (1) to promote each time an agent at random, or (2) to promote randomly the best and worst agents in terms of competence. (Those solutions remind me of Borges’ “Lottery in Babylon”!) Somehow, I doubt that those suggestions will be taken seriously.
So, next time you get really frustrated with your boss, take heart. It’s not his or her fault. They’ve just actualized a natural law of hierarchical organizations and are sitting comfortably at their level of incompetence. If it makes you feel any better, you can diplomatically point out that fact to them… though I encourage you also to make note of the theoretical validity of the Peter Principle, just so you don’t seem cheeky.
Some more info on this: some aspects of the Peter Principle may merely be 'observational' (tied to raised expectations needed to act on a promotion): http://client.norc.org/jole/SOLEweb/lazear.pdf
There's also been a flurry of good work on this in organizational economics, pioneered by Oliver Williamson, the guy who shared the Econ Nobel Prize with Elinor Ostrom. The issue is how to incentivize good work within an organization, like a university, where you can't have explicit competition and price variances for promotion, tenure, increased salary, lower course load, etc. One model that has a lot of currency right now compares institutions with more objective performance criteria with those that can't be well-quantified, which emphasize "commitment" or cultural buy-in. Consider the difference between attempts to measure scholarly output and scholarly quality.
In the face of different incentives, people develop different strategies. In more 'objective' institutions, people will tend to churn an idea or work on smaller pieces of a research project, while folks who find themselves in settings that emphasize 'culture,' it's more important to play 'influence games' and cultivate an air of mystery. The same dynamic can be seen in banks or law enforcement: consider that the FBI measures arrests, prosecutions, and convictions, while the NSA can't really measure an individual analyst's "terrorist attacks prevented" stats, so promotion tends to be more about who you know and who likes you.
In light of all this, I'm a lot more agnostic about the effects of the UK's attempt to quantify the productivity of academic research than many other philosophers.
Validity in the technical/logical sense? Or, validity in the common language usage sense?
Nice, informative followup comment anotherpanacea, which makes a good deal of sense when you think about it, but I still have to facepalm over you using "incentivize."
Maybe it's easier said than done, but isn't the most obvious solution to the Peter Principle creating a cultural shift in existing structure, so that demoting or replacing incompetent employees is more socially acceptable to the other employees, business community at large, the employee's bosses, and the "incompetents" in question? That way it seems that every employee would eventually settle right at the threshold of incompetency as opposed to permanently traversing it.