HRHeadStart #55: The Peter Principle; Probabilistic vs Deterministic Environments

The Talent Agenda

The Peter Principle states that organizations promote competent workers until they become incompetent managers. This tends to happen when promotion policies and practices over-index on performance in current job, rather than the capabilities required to succeed at the next job. After all, skills in one job do not necessarily translate to another.

In this interesting paper, the authors evaluated performance and promotions of sales workers across multiple companies. They analyzed sales performance as well as capabilities that are essential to sales managerial jobs like ability to collaborate. They found that making promotion decisions based on current sales performance actually reduces performance in the future.

The traditional linear career track provides limited opportunities for growth unless one takes up leadership roles. It stunts growth of expertise and individual/team performance. One solution for addressing this situation is to ensure the organization offers dual career tracks - Managerial and Professional/Expert pathways. Employees who wish to be on the managerial track transfer their focus from technical skills to leadership responsibilities. Those who choose to advance up the professional/expert track continue to focus their efforts on innovation and dealing with complex and important technical work. Some guidelines to design dual career tracks are here.

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Working Better

The academic environment differs substantially from organizational environments. In school, we are rated on tests. The answers are either right or wrong. The outcome is a score within a range. It is a deterministic environment. At work, there are no tests. The solutions to problem are rarely black and white. You are rated on the outcomes you create. Creativity, problem-solving and influencing become key skills. It is a probabilistic environment, where there are multiple ways to solve a problem.

Life is a probabilistic game. Take chances. Be open to shifting your mindset.

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Tiny Thought

Humility is not a limitation. It is earned through confidence. It takes confidence to say you may not be right, but you have worked diligently and explored options. Humility keeps you wondering what you might be missing. Humility makes it easy to ask for help from others. Nothing accelerates learning like confident humility.