ratchet-effect

This chapter outlines the foundational hypotheses and implications of the Peter Principle, which posits that employees in hierarchical organizations tend to be promoted until they reach a level at which they are incompetent. It explains the structural assumptions behind the principle, the ratchet effect preventing demotion, and the statistical tendency for competence to regress to the mean upon promotion. The chapter also discusses manifestations of incompetence in upper-level positions and strategies organizations use to manage or mask such incompetence.