The Peter Principle, introduced by Laurence Peter and Raymond Hull in 1969, suggests that employees typically rise to “a level of respective incompetence.” Organizations continue to promote high performers until their performance declines, often leaving them in place instead of moving them into roles that better use their talents. Over time, this pattern fills management or leadership roles with people whose past success does not align with the demands of managing a team, creating gaps in key proficiencies such as people management skills.
Recent Gallup data suggest that the Peter Principle is playing out among frontline supervisors in the U.S., with potentially negative consequences for employee engagement and organizational performance.
Most Frontline Supervisors Move From Top Individual Performers to Supervisors
Supervisors of frontline employees are those who say they manage workers engaged in “core activities or day-to-day operations such as manufacturing goods, healthcare, retail, food service or providing services.”
Sixty percent of all supervisors surveyed meet this description. Among them, 65% say they obtained their frontline supervisory position based on performance or years of experience in a frontline role. Only 30% say their organization placed them into their position based on supervisory skills, experience as a supervisor or because they began their career as a supervisor.
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The Peter Principle’s Impact on Employee Engagement
Supervisors of frontline employees who obtained their position through performance or years of experience are less engaged (31%) than their peers who obtained their position through supervisory skills, experience as a supervisor, or who began their career as a supervisor (42%).
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This gap in engagement between frontline supervisors who reached the role via individual frontline performance and those who did so based on supervisory skills or experience can have a significant effect on their teams.
Research shows that supervisor engagement influences the employees who report to them. Gallup’s meta-analysis of the relationship between manager and direct report engagement, as reported in Culture Shock, finds that managers’ own engagement, effectiveness, and natural talents account for at least 70% of the variance in team-level engagement, even while controlling for other factors. Furthermore, managers in the top quartile of engagement have teams with engagement levels that are, on average, 11 percentile points higher than the teams of managers in the 50th percentile of engagement.
The effects of the Peter Principle could be especially detrimental to frontline employees who already experience subpar levels of engagement. Frontline workers in the U.S. have lower levels of engagement than the U.S. workforce broadly (26% vs. 32%).
Investing in Better Selection and Training
One way to mitigate the adverse effects of the Peter Principle is to hire and promote based on supervisory talent rather than performance or experience in a frontline role alone. Science-based structured interviews and assessments help organizations identify individuals with supervisory talent. A meta-analysis of 136 studies in which structured interviews and assessments were administered to 14,597 managers found that hiring based on managerial talent increased sales or revenue by 21% per manager and profit by 32% per manager.
Another way to better equip supervisors for success is through supervisory training programs. Yet only 45% of frontline supervisors say they took part in supervisor training or education in the past year. Another 32% say they took part in such training, but not in the past year. Nearly a quarter (23%) say they have never taken part in training.
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Frontline supervisors who have taken part in training specifically focused on becoming a better supervisor in the past year report better outcomes. They are 79% more likely to be engaged, 19% less likely to feel burned out at work very often or always, and 11% less likely to be actively looking or watching for a new job.
Implications
Across industries like manufacturing, healthcare, and retail, most frontline supervisors are promoted based on individual performance or experience as frontline workers. As the Peter Principle suggests, this approach does not guarantee success as a supervisor. In fact, the practice can be costly. The National Bureau of Economic Research found a 7.5% decline in subordinates’ sales performance when organizations promoted high-performing sales representatives to managerial roles.
Gallup research shows that frontline supervisors who reach their roles based on individual performance are less engaged than those selected for supervisory skills or talent. That difference can have a trickle-down effect on the engagement of the teams they manage. However, the data also suggest that investing in more careful selection processes and more timely supervisory training are great ways to address lower engagement levels among first-time frontline supervisors.
Equip your frontline managers with the skills and support they need to succeed.
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