Peter Principle

Filed Under » ,
Dictionary Says

Definition of 'Peter Principle'

An observation that in an organizational hierarchy, every employee will rise or get promoted to his or her level of incompetence. The Peter Principle is based on the notion that employees will get promoted as long as they are competent, but at some point will fail to get promoted beyond a certain job because it has become too challenging for them. Employees rise to their level of incompetence and stay there. Over time, every position in the hierarchy will be filled by someone who is not competent enough to carry out his or her new duties.
Investopedia Says

Investopedia explains 'Peter Principle'

The Peter Principle was first observed by Dr. Laurence J. Peter and published in his book "The Peter Principle" in 1968. Dr. Peter also states that a promotion to the higher-ranking job position may not necessarily reveal the employee's incompetence, but rather the new position may require different skills the employee does not possess. Dr. Peter sums up the Peter Principle with the saying: "the cream rises until it sours." The Peter Principal can be a problem for businesses which can be solved through continued education. Even with proper employee training, the Peter Principal predicts the employee will eventually get to a position where they are incompetent because of further promotion.
Search results for

'Peter Principle'

  • The Greatest Investors: James D. Slater | Investopedia

    http://www.investopedia.com/university/greatest/jamesslater.asp
    ... and popularizing its use in America through his book, "The Zulu Principle" (1992 ...
    In 1964, he and Peter Walker founded an investment company called Slater Walker ...

  • Investing Lessons From Across The Pond

    http://www.investopedia.com/articles/financial-theory/09/anthony-bolton-investing-lessons.asp
    ... (To learn about Peter Lynch, see our ... In his book he quotes John Maynard Keynes, who
    stated that his "central principle of investment is to go contrary to the ...

  • Institutional Investors And Fundamentals: What's The Link?

    http://www.investopedia.com/articles/fundamental/03/101503.asp
    ... In principle, they will put money into stocks only after lots of ... The legendary investor,
    Peter Lynch, thinks institutional investors make poor role models for ...

  • Profit From Denim Consolidation

    http://stocks.investopedia.com/stock-analysis/2010/Profit-From-Denim-Consolidation-VFC-LIZ-TRLG-JOEZ-JNY0216.aspx
    ... Private Equity Circling Former Jones Apparel Group (NYSE:JNY) CEO Peter Boneparth
    joined ... Applying the same principle to True Religion, you get a share value of ...

  • Can Akamai Offer More Than Relief?

    http://stocks.investopedia.com/stock-analysis/2011/Can-Akamai-Offer-More-Than-Relief-AKAM-LLNW-LVLT-GOOG-AMZN-IBM-CMCSA1028.aspx
    ... for Akamai, investors may want to wait for this relief rally to peter out before ...
    at it as a commodity service, where price is the principle distinguishing trait ...

  • The Greatest Investors: Bill Miller | Investopedia

    http://www.investopedia.com/university/greatest/billmiller.asp
    ... Individual investors can learn from Miller's application of this investing principle,
    which, he says, was the basis for the 15-year benchmark-beating record of ...

  • Warren Buffett: The Road To Riches

    http://www.investopedia.com/articles/financial-theory/08/buffetts-road-to-riches.asp
    ... Buffett's investment philosophy become one based on the principle of acquiring stock
    in what he believes are ... They had three children, Susie, Howard and Peter. ...

  • Infamous Insider Traders

    http://www.investopedia.com/articles/financial-theory/09/defining-insider-trading.asp
    ... The principle behind the decision was that all market participants must have equal ...
    And, although investors like Warren Buffett and Peter Lynch consider insider ...

  • An Introduction To J-Charting

    http://www.investopedia.com/articles/technical/04/060204.asp
    ... J-Chart is similar to Market Profile, developed by J. Peter Steidlmayer in ... have the
    ability to anticipate price reversals thanks to the principle of resonance. ...

Related Articles

Partner Links