how to use h.r. processes to avoid the peter principle - bad promotions

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How to Use H.R. Processes to Avoid the Peter Principle

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special Q&A

Session with

HR experts

“In a hierarchy, every employee rises to his level of incompetence.”

THE PETER PRINCIPLE

The key word in the Peter Principle is “hierarchy”.

The Peter Principle suggests that, over time as people continue to be promoted within an organization with a hierarchical structure, they will eventually reach a point of incompetence.

Lean companies with fewer layers of management can hide incompetence easier than bigger companies. They can quickly cross-train employees in other areas where they may prove to be more competent.

©2016 Equilibria, Inc. www.eqbsystems.com @EquilibriaInc

There is a tried and tested method for avoiding the costs and risks associated with making “bad promotions” in your company.

Structure for Success

Identify Metrics

Improve Process

Manage Change

We’ve partnered with two HR experts to help explain this method.

Cathy MissildineChief Performance OfficerIntellectual Capital Consulting

Deborah A. KingSr. Organization Effectiveness ConsultantEvolution Management, Inc.


Business Infrastructure = Business Design + Business Processes



Identify Metrics

Improve Process

Manage Change

1. When companies grow fast, so does their need to hire more people. However, you want to make sure that your business is structured for success.

2. Make sure you define what work needs to be done as well as the skills and qualifications a person should have in order to do that work.

3. Then, you’ll need to identify and document the processes.

Business Infrastructure = Business Design + Business Processes



Identify Metrics

Improve Process

Manage Change

Example H.R. Processes include:

• Recruiting

• Interviewing

• Onboarding

• Conducting Performance Evaluations

• Termination

Once your processes are in place, you’re ready to identify and assign Key Performance Indicators (metrics).


What are some key metrics to look at in measuring performance?


Identify Metrics

Improve Process

Manage Change

Measuring employee performance is often times considered a chore by managers. The key metrics are very dependent on what the organization needs to drive their business strategy. Once those are identified, measurement is easy.

You can measure competencies like customer focus, relationship building, strategic thinker, and decision-making. Also it is important to measure individual SMART goals that are cascaded form the organizational strategy. There’s not a once size fits all answer.


What is the suggested frequency for reporting these metrics?


Identify Metrics

Improve Process

Manage Change

A firm that utilizes an effective performance management system probably formally measures performance once per year, but FEEDBACK is critical for employees on an ongoing basis. It’s hard to course correct if you want until the end of the year to make adjustments. .


How should managers be trained to look for “diamonds in the rough” vs. incompetence?


Identify Metrics

Improve Process

Manage Change

I believe they should be aware of what the needs are the business are and compare that to the individuals using objective criteria to do so.

If someone is really trying and has some basis skills along with a can do attitude then that person may be worth the investment. But on the flip side, if someone doesn’t possess the basics skills and does not have a continuous learning approach, then tough decisions need to be made.


How can managers tell when more training is needed vs. warning and eventually firing someone?


Identify Metrics

Improve Process

Manage Change

That comes down to …the expectations and goals of the job. Making sure those goals are measurable. Either people are meeting those expectations or they are not. The key is to figure out the root cause of non-performance. By asking targeted questions, the manager can figure out if it is a “fixable” training gap or a missing skill or attitude problem.


How can business owners/managers ensure they keep the “right people in the right seat” as their business grows (or is restructured) and their needs change?


Identify Metrics

Improve Process

Manage Change

I believe the secret to the “right people in the right seat” starts with recruiting. Have we been able to match our job with the person with the right skills and have we matched the person with our culture? The same applies when we promote or transfer someone.

Signs that you don’t have a good match include poor performance, absenteeism, lateness and missed assignments. The manager needs to make sure he has feedback sessions with high potentials to make sure they are retained.


Now that you are monitoring your metrics, its time to look for data trends to let you know whether or not someone’s performance is getting low.




Identify Metrics

Improve Process

Manage Change

Process improvement ensures the right things (metrics) are measured the right way.

1. Track metrics onto a graph.2. Investigate root causes for downward

trends.3. Provide feedback.4. Determine whether or not poor

performance is process-related.5. Establish a corrective action plan.6. Track the metrics again.7. Determine next steps for the employee.



Identify Metrics

Improve Process

Manage Change

In this example, the solid green horizontal line represents the expected performance level of a particular process.

This employee is performing above expectations until he is promoted (see yellow star) to a higher level in the company.

Over time, this employee’s competence on the job went from exceptional to poor.

At this point, you’ve structured your business for success, are continuously monitoring performance and making process improvements where necessary.

Now let’s explore the best ways to communicate the change that comes as a result of these efforts.


What are the steps in creating and executing a communication plan for resolving people and process-related issues?

Planning for, and successfully implementing organizational change requires a significant planned engagement with employees and stakeholders to gather their ideas, suggestions and reactions. This time, which organizations often overlook, sets the stage for helping employees understand why the change is necessary and how the changes will impact their position, responsibilities, future career options.

Cont. on next page…


Identify Metrics

Improve Process

Manage Change


What we know about human behavior is that unless employees are kept informed, human nature will be to “interpret” what is happening – and most likely it will be interpreted incorrectly, leading to rumors and even the possibility of good employees leaving, thinking that they’ve seen the writing on the wall. A good strategy would be to create a communications plan that offers as much information, in a timely manner, as possible to all employees.


Identify Metrics

Improve Process

Manage Change

Information can be shared through avenues such as: town hall meetings, talking points to be covered in staff meetings, access to senior leaders for questions and clarifications, updates in newsletters and system voice messages, email notices of current change activities and progress reports of what’s changing and the success the organization is having with the changes. During times of change – remember to communicate as frequently as possible through as many avenues as possible,, since employees may not be exposed to certain messages. You can’t communicate too much.


How do you reshuffle/reorganize people in a way that promotes/ensures future competence?

As organizations are considering change, they should be thinking about the current level of skill sets and competencies being utilized in the organization, as those that will be needed to be successful after the change. Depending on the amount of time that is available, existing employees may be able to receive appropriate training in order to take their performance to the needed level. If time is not available for training, it will be important for Human Resource professionals to meet with hiring managers to assess where the gaps are, and what options might be suitable to address the immediate needs. Some options might include: outsourcing, using part-time staff until existing staff can perform at the new level of expectations, transition staff to other positions and hire new workers. However, no option should be pursued until a thorough understanding of the needed skill sets is documented.


Identify Metrics

Improve Process

Manage Change


Can you discuss promotion (upward position) vs. a raise (same position) in minimizing the risk of incompetence and sabotage?

From an HR perspective, I don’t think you want to encourage a practice to give someone a raise while they are in the same position, unless it is warranted by their performance review. I can’t imagine a situation where you would give them a raise without restating expectations if the position was changing, so the “promotion” should be demonstrated by additional responsibilities, and therefore, additional compensation.


Identify Metrics

Improve Process

Manage Change


What are your thoughts about “try before you buy” efforts once people are promoted?

As the organization is planning to transition, it may be an option to “try” an existing employee in the new role before promoting them. Of course, this option would require serious consideration of contract rules, if a union is involved. If there is no union to deal with, the Human Resources Manager, Supervisor and employee could have a conversation about the organization’s desire to transition the employees’ role and responsibility.

Cont. on next page…


Identify Metrics

Improve Process

Manage Change


It should be clear that if the employee is open to “trying” the new role, what the exact performance expectations are, when and how often his/her performance would be evaluated, how feedback would be provided, what assistance the employee thinks he/she would require to be successful and the actions that will result after the trial period; either promoted into the new role, or transitioned to another position or out of the firm. The employee should understand there are no guarantees, and all of the communications should be in writing, signed by both the supervisor and employee.


Identify Metrics

Improve Process

Manage Change


What are some best practices for reducing incompetence?


Identify Metrics

Improve Process

Manage Change

During organizational change initiatives it is just as important to communicate what is not changing, as those things that are changing. So, those positions that will continue to do the same tasks, processes, etc. should be made aware of it. They should also know how other positions are changing, and the required skills they will need, so they can consider the information and build it into their professional development plans. There should always be an open door to ask HR for assistance with training plans, and to help identify any internal mentoring, workshops, courses, etc. they might be able to take advantage of.


ConclusionWith proper planning, you can avoid the Peter Principle and break the cycle of bad promotions by:

• Structuring your business for success• Measuring and monitoring performance • Improving processes when necessary• Managing your staff through all changes


Image Credits

• Slide 01: AMC Entertainment, LLC

• Slide 02: http://www.heyuguys.com/4-new-images-breaking-bad-season-5/breaking-bad-2/

• Slide 16: http://skillfulmeanstraining.com/what-2-key-personality-traits-help-managers-manage-change/

• Slide 24: Image Credit: http://www.uhdwallpapers.org/2013/10/breaking-bad.html

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© Copyright 2016. Alicia Butler Pierre for Equilibria, Inc.

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how to use h.r. processes to avoid the peter principle - bad promotions

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