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Peter Principle

Laurence Peter proposed what has become known as the Peter Principle where each employee of a bureaucracy is promoted to his or her level of incompetence. People who perform well in a bureaucracy come to the attention of those higher up the chain of command and are promoted. If they continue to perform well, they are promoted again. This process continues until they are promoted to a level at which they can no longer handle the responsibilities well—their level of incompetence. There they hide behind the work of others, taking credit for the accomplishments of employees under their direction.

Although the Peter Principle contains some truth, if it were generally true, incompetents would staff bureaucracies, and these organizations would fail. In reality, bureaucracies are remarkably successful. Sociologists Peter Evans and James Rauch (1999) examined the government bureaucracies of thirty-five developing countries. They found that greater prosperity comes to the countries that have central bureaucracies and hire workers on the basis of merit.