The Peter Principle. Why is it a bad idea to promote top performers to leadership positions?

In 1969, a professor of education, Laurence J. Peter, and a playwright, Raymond Hull, published a book entitled The Peter Principle [1], which described a management concept called the Peter Principle. It discredited the model of promotion in hierarchical organizations. Laurence J. Peter observed that a person who is competent at their job will earn promotion to a more senior position which requires different skills.

“An employee is promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.”

That bestselling book was a satire that mocked managerial practices and management books. The authors wanted to make fun of promotion shortcomings.

Despite its humorous tone, a few people took it seriously because it simply sounded true, like a theory. Even nowadays it still sounds like something that could relate to huge corporations.

But is it actually true?

In 2018, economists Alan Benson, Danielle Li and Kelly Shue decided to find out if the Peter Principle was a fact. They analyzed the performance of over 53,035 salespeople working in more than 214 US companies. 1,531 of those people were promoted to managerial positions. This amount of research data was enough to identify effective workers and evaluate their performances before and after being promoted. The salespeople were good candidates for this analysis because the results of their work were particularly measurable.

getting promotion

The authors discovered that highly effective salespeople were more likely to be promoted to managerial positions and once they were promoted they turned out to be terrible managers [2]. The better they were at sales, the worse their team performed under their managerial umbrella.

“As a result, the performance of a new manager’s subordinates declines relatively more after the managerial position is filled by someone who was a strong salesperson prior to promotion.”

A company pays twice for a bad promotion

A company which promotes employees on the basis of their performance in their previous capacity can pay for it twice. Let’s look at an example of salespeople from the Promotions and the Peter Principle paper [2]. Removing the most effective salesperson can result in lower revenue for the company because that person stops selling and starts to manage others. What’s worse, there is a huge risk that a team led by such a person would struggle with under-performing.

“To see that the best salespeople were becoming the worst sales managers was surprising.”

Alan Benson, Danielle Li and Kelly Shue couldn’t say how often companies fell into the Peter Principle trap. But they definitely raised concerns that promoting on the basis of lower-level job skills rather than managerial skills could be extremely costly.

Leave great performers alone!

I’ve seen many engineers, analysts, salespeople and accountants who, to their disadvantage, were promoted to higher positions and finally became managers. They were great performers as domain experts but organizations rewarded them by promoting them to managerial positions which in fact wasn’t a reward neither to them nor to the company.

For example, taking away technology and programming tasks from top performing software developers wouldn’t necessarily make them happy. In fact it’s quite probable that it would  quickly lead to an opposite effect – occupational burnout. From playing with the latest technology and creating something tangible they would move to having to solve different problems.

Their duties would include replying to lots of emails, discussing issues with other managers, spending hours in various meetings, resolving conflicts and so on. Those tasks are completely unrelated to their previous responsibilities. You also need to keep in mind that not everyone treats managerial positions as a prestigious. Some employees prefer to develop their skills in areas they feel competent in.

It’s not always accurate

Of course the Peter Principle is not the only truth and it shouldn’t be treated like that. I bet there are people who don’t have to possess all skills required for a new position but they do work hard to develop them.


Great performance in one capacity doesn’t necessarily imply great performance in another. It is something that should be always considered before any promotion. Sometimes higher positions require different skills which aren’t required at the level below. That’s why you shouldn’t pressure or encourage top performers in your team to become managers. Promotion in the hierarchy isn’t always a good choice.

There is no reason to believe that without communication and leadership skills any individual contributor may become a great manager. And it doesn’t matter how high the salary might be and how prestigious the position appears to be.


[1] Benson, Alan & Li, Danielle & Shue, Kelly. (2019). Promotions and the Peter Principle. Quarterly Journal of Economics. 10.2139/ssrn.3047193.

[2] Laurence J. Peter, Raymond Hull. (2014). The Peter Principle: Why Things Always Go Wrong. HarperBusiness. Reprint edition.