According to the Peter Principle, organizations manage careers so that everyone “rises to the level of their incompetence.” To test how this theory might actually play out, a team of researchers examined sales managers and their employees in 214 firms. Sales is an ideal setting to test for the Peter Principle because, unlike other professional settings, it’s easy to identify high performing salespeople and managers. According to the data, the Peter Principle is real: the best salespeople were the ones who got promoted, but the better the salesperson, the worse they were at managing. To fix this problem, organizations must come up with other ways to reward their top performers, so they can continue to do what they’re best at.
You’ve probably encountered managers you admire more for their technical skills than for their actual leadership skills.
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