Promotion: It’s Not Always The Top Performer

In my book, Isaac Song has elaborated extensively about Peter Principle (free e-book here if you haven’t read it). What Peter Principle is all about, best performer often receive promotion to the highest position where they can no longer do a good job. Then, they stay there forever. Laurence J. Peter published this way back in 1968, and still Leaders often commit this mistake when promoting someone.

Forbes quoted this study where MIT and Yale analyzed the performance of over 50 thousand sales employee, and has tracked over 1,500 sales employee who were promoted to become sales manager. The analysis further showed that the best sales employee were often perform poorly as sales manager. Consistent with Peter Principle, promotion decisions which places more weight on current performance does not fruitfully predict future performance.

However, employees who are performing well expect opportunities to be promoted into more senior roles. Lack of future career opportunity drives attrition. On the same note, traditional career paths defined by stable, vertical advancements by best performers that causes Peter Principle too are, perhaps as old as dinosaur in modern organization. Instead, leaders should start looking into various components that makes promotion decisions fair and more inclusive.

Promotion Strategy #1 – Overall Integration with Current Talent Strategy

Often when someone is promoted, it is mainly due to a headcount replacement. Career conversations are often short and promotion decision is made based solely on performance at the current step. Leaders need to perform a holistic assessment of readiness for the next role, and not just current performance. Specifically, an effective strategy that defines high-quality inputs and feedback surrounding an employee’s readiness for the next role.

There are a plethora source of information that leaders can tap to ensure that they are assessing readiness for next role. Previous performance ratings and a 360-degree feedback is always a good starting point. However, one company (Philips) has developed a leading strategy on this front. Philips launched a system called Philips Business System, which aims to have everyone work together on well-defined deliverables within a clear framework that covers purpose, strategy, governance, people, processes & tools, culture and performance. In particular, the notion of empowerment is key. It sets employees up with the ability to access opportunities that are a good fit for them, their careers, and ultimately, the business’ performance. Such initiative allows leaders to capture employee career aspirations and availability for mobility.

Promotion Strategy #2 – Mitigating Bias

No matter how well a process is designed, bias is an inherent human nature and will affect talent management process. This will inadvertently create barriers for better-fitting employees to move into senior roles. Mitigating and removing systemic bias requires intentional promotion design that all managers with chief hat to buy-in, and strict adherence to the said design. The design could include:

  1. Transparent promotion criteria for all roles throughout the organization, and remove specific criteria that might exclude specific group of employees.
  2. Career discussion to center around ability to manage increasingly complex objectives, and not availability of such when a new role is available.
  3. Identify potential anomalies in recommended promotion decisions by challenging distribution of feedback from #1.

Promotion Strategy #3 – Cross-calibration of Decisions

An internal board of promotion should be created to discuss candidates for promotion. The goal of such board is to ensure that leaders from various verticals are able to see eye-to-eye on promotion decision and keeping #2 in check. When all promotion criteria are met across promotion criteria and all leaders agree on a single decision, the goal of the board is then fulfilled.

Concurrently, the board should also be utilized to discuss the cascading impact of promotions (ie. when you are promoting an employee, you create another internal vacancy), and how to navigate through that circumstances.