We’ve all heard about the Peter Principle, based on the notion that people are promoted in the workplace until they reach their level of incompetence. The person credited with that concept is psychologist Laurence Peter who claimed this happened because we wrongly assume that people who are good at their current job will also be good at the job one step up the corporate ladder.
Now a group of Italian scientists have come up with a new theory—that was rewarded by the New York Times as one of the most noteworthy ideas of the past year.
The scientists created a computer model of a 160-person corporation and programmed it to act off the Peter Principle—the best performers were promoted, but had “only a random likelihood of being good at their new jobs,” the article said. Before long there were plenty of incompetents scattered around the workplace.
Then the researchers reprogrammed the firm to promote people entirely randomly. What did they discover? Overall efficiency of the company improved. They also tried promoting only the worst or only the best performers and found that worked better too than promoting on merit. According to the article these strategies worked because they tapped into “Parrondo’s Paradox,” a part of game theory in which you win by alternating between two losing strategies.
Andrea Rapisarda, a physicist at the University of Catania in Italy and co-author of the study, told the Times that if you knew who would be the best performer for a job that is the person you should promote. But if you aren’t sure—which is the reality in most promotion situations—then random picks will provide the best result.
Now that’s a radical idea that could turn the notion of performance reviews upside down. Does it make sense to you?