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The Peter Principle and learning: A safer way to promote workers

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  • Farias, B.
  • Rapôso, O.
  • Penna, T.J.P.
  • Girardi, D.

Abstract

In 1969, the psychologist Laurence J. Peter made a observation about how organizations promote its members: “The members of an organization climb the hierarchy until the level of maximum incompetence”. The first computational study on this principle suggests that promoting members randomly is the safest strategy. Here, we modify the original model adding the diversity of competences and learning. Our results suggest that, even though the Peter principle negatively affects the efficiency of a business, this effect is less drastic than the one suggested in the previous work when adding the new ingredients. The strategy of promoting the individual with the best performance in a level really seems to be the best strategy, recovering the common sense hypothesis.

Suggested Citation

  • Farias, B. & Rapôso, O. & Penna, T.J.P. & Girardi, D., 2021. "The Peter Principle and learning: A safer way to promote workers," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 576(C).
    • Handle: RePEc:eee:phsmap:v:576:y:2021:i:c:s0378437121002958
    DOI: 10.1016/j.physa.2021.126023
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    References listed on IDEAS

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    1. Edward P. Lazear, 2004. "The Peter Principle: A Theory of Decline," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 141-163, February.
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    3. Pluchino, Alessandro & Rapisarda, Andrea & Garofalo, Cesare, 2010. "The Peter principle revisited: A computational study," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(3), pages 467-472.
    4. Alan Benson & Danielle Li & Kelly Shue, 2019. "Promotions and the Peter Principle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2085-2134.
    5. Julius Kane, 1970. "Dynamics of the Peter Principle," Management Science, INFORMS, vol. 16(12), pages 800-811, August.
    6. Fetta, A.G. & Harper, P.R. & Knight, V.A. & Vieira, I.T. & Williams, J.E., 2012. "On the Peter Principle: An agent based investigation into the consequential effects of social networks and behavioural factors," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(9), pages 2898-2910.
    7. Pluchino, Alessandro & Garofalo, Cesare & Rapisarda, Andrea & Spagano, Salvatore & Caserta, Maurizio, 2011. "Accidental politicians: How randomly selected legislators can improve parliament efficiency," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(21), pages 3944-3954.
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