The peter principle revisited: An economic perspective

Effects of Reporting Levels on Team Workers in New Business Sectors

“…An individual's perceived opportunities for lateral transfer were measured by three items that asked the self‐evaluation of opportunities received so far and perceived future opportunities. These items were developed based on insights gained from previous studies, such as receipt of different positions in the organization without changes in hierarchy and salary (Huang, ), scheduled nonmerit upgrades (Acosta, ), and rotating employees across job positions (Schaefer et al, ).…”

“…Th ese items were developed based on insights gained from previous studies, such as opportunities for promotion (Groot & van den Brink, 1996;James & Jones, 1974) and opportunities for growth and advancement (Groot & van den Brink, 1996;Manning, 2010 An individual's perceived opportunities for lateral transfer were measured by three items that asked the self-evaluation of opportunities received so far and perceived future opportunities. Th ese items were developed based on insights gained from previous studies, such as receipt of diff erent positions in the organization without changes in hierarchy and salary (Huang, 1999), scheduled nonmerit upgrades (Acosta, 2010), and rotating employees across job positions (Schaefer et al, 1979).…”

“…Th e literature identifi es lateral transfers as scheduled nonmerit upgrades, task reorganizations, or job reclassifi cations (Schaefer, Massey, & Hermanson, 1979). Lateral transfers are not necessarily merit driven, usually do not involve substantial changes in compensation, and do not imply career advancement (Acosta, 2010).…”

“…Th e literature highlights the importance of lateral transfers to obtain a maximum output from employees (Schaefer et al, 1979). For instance, Volume 28, Number 4 / 2016 DOI: 10.1002/piq 95 Schaefer et al (1979) identifi ed the importance of rotating employees across job positions, by way of lateral transfers, to obtain the most from employees' capabilities.…”

The Peter Principle resuscitated: are promotion systems useless?

“…The Peter Principle states that ‘In a hierarchy, every employee tends to rise to his level of incompetence’ (Peter and Hull, : 25). Although many organisational theorists have either ignored the Peter Principle or treated it as a joke (Jones, ), it has received serious investigation and a measure of validation over the past 40 years (Kane, ; Schaefer et al ., ; Phelan and Lin, ; Lazear, ; Acosta, ; Pluchino et al ., ). At the same time, managers and management theorists continue to espouse the benefits of promoting the best performers (Beehr et al ., ), which is seen as a way to reward good performance and motivate other employees (DeSouza, ).…”