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.
Sociopaths (who wield all the power) promote over-performing Losers into middle management thereby making them Clueless. They maneuver the Clueless to escape their own risk. For example, Michael was a top sales person before becoming a Clueless manager.
Sociopaths turn under-performers into Sociopaths and fast-track them to positions of power. Losers that are self-aware (knowing they made a bad economic bargain) seek opportunities to raise their standing before they run out of time and get fired. For example, Ryan the intern who is bad at sales (his actual job) and manipulates his way into management position by David (a Sociopath).
The Losers are left to fend for themselves. They find fulfillment outside of work and do just enough to get by. This is exemplified by Stanley, who knowingly plays along to the delusions of the Clueless and does enough work to never get fired.
- Performance management is a way of preventing the rise of low-performing Losers into Sociopaths in positions of power
- Peter Principle a more popular (and simplistic) explanation of organizational incompetence
- This theory can be thought of as an example of the principal-agent problem, the organization is not properly incentives to counteract the bad behaviors of promoting low-performing Losers and senior managers manipulating the Clueless.
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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.