The Peter Principle holds that employees who do well in a given role are often promoted to increasingly higher positions—until they eventually reach a job for which they lack the appropriate skills or aptitude. At that point, they plateau: they remain in a role where they are, by definition, no longer competent.
Because promotions are usually based on performance in the current role rather than on the fit for the new one, this dynamic can lead to dysfunction in organizations. Over time, many positions may be held by individuals who are not well suited for them, which can erode performance, morale, and effectiveness.
