Peter Principle

A theory of management in which employees in a company are promoted until they are at a level of incompetence. For example, you get promoted for doing well at level 1 so you are promoted, but then you never get promoted again.

See also:

  • Baumol Effect

    Salaries rise in response to other salaries rising in jobs that experience productivity gains. For example, the ticket prices in the classical arts rise not because they can put on a concert with half the orchestra, but because the salaries of their patrons have grown. Similarly, the salary of managers grew not because their productivity increased, but because the salaries of engineers the manage grew exponentially.

  • The Gervais Principle

    There are three groups of people within an organization: Sociopaths (tend to be at the top running the company, characterized by self-interest and need to control), Clueless (tend to be middle management, characterized by misplaced loyalty to the organization), and Losers (tend to be at the bottom, characterized by striking a bad economic bargain). The Gervais Principle speaks to the dynamics between these three groups with the Office as allegory.

  • The Shirky Principle

    Institutions end up perpetuating the problems they aim to resolve, either intentionally or unintentionally. For example, TurboTax addresses the issue that taxes are too complicated for individuals to handle independently and then lobbies Congress to hinder efforts to simplify tax preparation for individuals.