The 'Peter Principle' and why everyone is promoted to incompetence

Think about a brilliant sparky who gets promoted to manager because he’s a wizard with wires. Suddenly, he’s not fixing faults; he’s drowning in spreadsheets, a job he’s actually rubbish at.

Since he’s a mediocre manager, he stops getting promoted. He’s stuck. This is the Peter Principle: people rise until they reach their 'level of incompetence.' They stay there because they aren't good enough to move any higher.

It’s why so many bosses seem useless. They were rewarded for being good at a job they no longer do.

Wait, why can't we just put the sparky back on the tools?

In a perfect world, we would. But in reality, demotion feels like a massive slap in the face. It’s a blow to the ego and usually comes with a pay cut that nobody is going to volunteer for.

Plus, it makes the bosses look like they've got no clue. Admitting the promotion was a mistake means the higher-ups have to own their bad judgment. Most companies would rather leave a bloke drowning in paperwork than admit they stuffed up.

So, you get stuck with a 'senior' manager who’s too proud to go back to the wires and too useless to lead the crew. It’s a lose-lose that everyone just ignores.

If everyone's incompetent at the top, how does the company actually stay afloat?

It’s a bit of a miracle, isn't it? The secret is that the real work is carried by the people who haven’t reached their level of incompetence yet—the legends still on the tools who actually know their stuff.

They’re the engine room keeping the ship moving while the bosses are busy having meetings about meetings. The whole system relies on the 'not-yet-promoted' to keep the lights on and the gears turning.

Eventually, those productive workers get promoted too, and the cycle resets. It’s a constant race between people rising to their uselessness and the actual work getting finished.

Why not just pay the legends more to stay on the tools?

It sounds like a no-brainer—just give the master sparky a fat raise to keep wiring. But most companies view "success" as a ladder. In their eyes, if you aren't climbing, you're failing.

HR departments often have rigid pay scales where a "Technician" hits a ceiling, but a "Manager" gets the big bucks. To give a legend the pay they deserve, the boss is forced to change their job title.

It’s a trap. We trade a world-class craftsman for a third-rate administrator just to bypass a payroll rule. We'd rather break the workflow than rethink how we reward talent.

So, why don't we just create a 'Master' rank with manager pay?

Some clever tech firms actually do this—it’s called a 'dual-track' career path. You can keep climbing the mountain of skill without ever having to touch a spreadsheet or fire anyone. It’s the dream, really.

But in most traditional businesses, the 'Master' rank causes a massive ego meltdown. If the bloke on the tools is out-earning the bloke in the suit, the suit feels like his authority is being undermined. To them, the paycheck is the scoreboard for who’s the boss.

Then you’ve got the bean counters. HR loves 'market rates.' If every other company pays technicians a certain amount, they refuse to break the mold. It’s easier for them to give you a useless 'Manager' title than to explain to the board why a craftsman is worth more than an administrator.