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Hiring a Manager? How to Avoid the Peter Principle

Are you hiring for an open management slot in your company? Are you looking at people who are successful in their current role and giving that success weight in your decision? You could be setting yourself up for The Peter Principle.


Laurence J. Peter first noticed the human tendency to evaluate an employee’s potential for success in a role higher up the corporate ladder based on performance in their current job.

In a hierarchy every employee tends to rise to his level of incompetence … in time every post tends to be occupied by an employee who is incompetent to carry out its duties … Work is accomplished by those employees who have not yet reached their level of incompetence.

Why? Why are they incompetent? There could be a multitude of reasons:

  • A fantastic company comptroller may not have the interpersonal skills needed for a CFO position
  • A successful salesperson may not have the coaching skills for a sales manager position
  • A gifted writer may not have the detail orientation for an editor’s position
  • A superb technical engineer may not have the risk orientation of a start up entrepreneur

Those incompetent in one position are generally highly competent in others so don’t get put off with the word “incompetent.” It simply means not having the needed skills, or not qualified to act in a certain capacity. I’m personally incompetent to fly a helicopter, to act as a tax accountant, or to try a legal case.

How to Avoid the Peter Principle When Hiring

Gallup just published a world-wide survey concluding that only a SCANT TEN PERCENT of current managers are competent for their position. Another 20% can do the job with coaching. Research by Gallup found that organizations pick the wrong people for management positions 82% of the time. EIGHTY TWO PERCENT … did you get that?

The financial implications are massive. Gallup estimates that putting the wrong people into management positions costs the US economy between $319 billion and $398 billion each year. How much is it costing your company?

Why are people promoted to management ranks? Gallup published two reasons and I’ll add my own:

  • Previous success in a lesser role
  • It’s “their turn”

Researchers asked US managers why they believe they were promoted and their reasons were … you guessed it: success in a previous role and tenure with the company.

An additional reason is most likely based on our notion of fairness. It just doesn’t “seem fair” that a 20+ year employee would be passed over in favor of a young hot-shot who’s been in the workforce only three years, even though the young hot-shot may be better suited for the role.

Gallup states that there are five factors that indicate a manager will be in that top 10% grouping:

  1. They have a unique ability to motivate employees
  2. They overcome obstacles by being assertive
  3. They cultivate an accountability culture
  4. They build relationships built on trust
  5. They make educated and unbiased decisions based on the company’s best interest … regardless of the inter-office political implications.

Can you identify these traits with your current hiring processes?

What would your workplace look like with managers and supervisors with those five key traits? What would it look like to have leaders who understood how to provide an environment that motivates employees to do their best work? What would it look like to have leaders and managers who could overcome obstacles and hold their own people and themselves accountable to hit the organization’s targets? What would it look like for these same managers to have trusting relationships with their people? What would it look like to have leaders who made decisions based on the company’s best interests and ignored petty office politics?

Your firm would become an Employer of Choice.

With the right assessment tools, you can identify leaders and managers that fit these criteria. It will require four different validated instruments backed by brain science:

  1. A behavioral analysis to determine how a potential candidate will approach obstacles, accountability, and build trust
  2. A motivators evaluation to determine how a potential managerial candidate will handle office politics
  3. An emotional intelligence assessment to determine how a potential managerial candidate will relate with and understand people
  4. An axiological values analysis to determine how a potential managerial candidate will employ an empathetic outlook, hold themselves and others accountable, and make systematic judgements

Without all four, you’re likely to be in the 82%.

What are the implications of managerial mis-hires for your organization?

Are you willing to do anything about it other than the same old thing you’ve done for the last 15 years?


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Want to learn more? First check out our website and then contact us ( and tell us how we can help you and your company bring out the best in your most important asset – your people.

Certified as a Professional Behavioral, Motivators, and Emotional Intelligence Analyst, Ron Haynes specializes in using the science of TTI’s TriMetrix HD to help companies select and develop their top talent, create genuine Job Matching System solutions, and implement succession planning.

He has recently developed an auditing process to help organizations more accurately calculate true cost of employee turnover. It’s staggeringly higher than you think.

Need a solution to your employee challenges? Contact him at or at 870-761-7881.

Image based on: “Peters principle” by Nevit Dilmen (talk) – Own work. Licensed under CC0 via Wikimedia Commons –

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