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Dynamics of the Peter Principle

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  • Julius Kane

    (University of British Columbia)

Abstract

In this paper, a realistic Markovian model of hierarchies is considered which reveals that under suitable conditions The Peter Principle applies. That is, above a certain critical hierarchical level, performance decreases slowly, but steadily, with increasing level. This can be true even if there is effective screening and promotion is by merit, rather than seniority. Screening procedures which are uniform, realistic and selective can actually decrease relative performance after promotion. Criteria for the manifestation of this phenomenon will be presented. Basically, it is more likely to manifest itself in bureaucracies having low internal mobility and appears when people who are passed over for promotion improve more with another year's experience than those promoted to new jobs which are unfamiliar and more challenging. Mathematically, the controlling parameter is the ratio of two eigenvalues, each the largest eigenvalue of a 3 \times 3 matrix. These eigenvalues are respectively those of two transition matrices, one describing reclassification of successful candidates after promotion, and the other, the reclassification of unsuccessful candidates.

Suggested Citation

  • Julius Kane, 1970. "Dynamics of the Peter Principle," Management Science, INFORMS, vol. 16(12), pages 800-811, August.
    • Handle: RePEc:inm:ormnsc:v:16:y:1970:i:12:p:b800-b811
    DOI: 10.1287/mnsc.16.12.B800
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    Cited by:

    1. 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.
    2. 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).
    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. João Ricardo Faria & Franklin G. Mixon, 2020. "The Peter and Dilbert Principles applied to academe," Economics of Governance, Springer, vol. 21(2), pages 115-132, June.
    5. Cheng, Yuan & Chang, Meng & Xue, Yanbo, 2020. "A computational study of promotion dynamics and organizational efficiency," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 560(C).
    6. Pawel Sobkowicz, 2010. "Dilbert-Peter Model of Organization Effectiveness: Computer Simulations," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 13(4), pages 1-4.

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