Strategy

Why random promoting works

Thanks to the Peter Principle, promoting staff at random is the best policy.

Randomly promoting workers is the best way to improve a company’s efficiency, according to a group of Italian researchers. Academics at the University of Catania based their research on the Peter Principle, named for Canadian psychologist Laurence J. Peter, which contends: “in a hierarchy, employees rise to their level of incompetence.” The theory asserts that competent individuals will be promoted until they reach a job that they cannot perform well, at which point their climb up the corporate ladder ceases.

Using mathematical modelling, the Italian researchers concluded that, if the Peter Principle is right, promoting top employees will result in a 10% drop in efficiency, while advancing your worst employees will result in a 12% improvement. Furthermore, since the theory may or may not be valid, it is better to select a promotion strategy that improves efficiency regardless of whether the principle is correct. Random promotions result in a 1% improvement in efficiency if the principle is true and a 2% improvement even if it’s not. Organizations can also randomly alternate between advancing their best and worst employees, which would result in a 1.5% hike in efficiency. The research was recently honoured with an Ig Nobel Prize, presented by the Annals of Improbable Research, a light-hearted science magazine.