Petering Out

Many of us have experience of large organizations. We currently work for them, have worked for them, been ruled by them or seen service in them. A pyramid hierarchy is almost universal with one person at the top and increasing number of people in each layer, all the way from senior executives to lowly worker bees like you or me at the base holding up the whole caboodle with our sterling efforts.

The great dream, of course is that we work hard and our merits will be recognized. This in turn leads to our promotion and we move up steadily through the hierarchy as our talents are appreciated. This model of meritocracy is lauded as the best way to run things and is usually only challenged by privately run institutions, whether companies or countries, in which the control is handed down from magnate to offspring and relatives. Even then, below the upper level, meritocracy is rumored to rule.

There is a major problem with this philosophy as Pluchino, Rapisarda and Garafalo of the U di Catania point out in their paper (1) that will shortly appear in Physics A. The fly in the ointment is the good old Peter Principle. You know the one that states that people are promoted to their level of incompetence. Thus our meritocratic pyramid becomes progressively moribund at the higher management levels.

Much better to let people do jobs that they are competent at and make random promotions. This heresy has shown to be robustly correct by simulations made by Pluchino et al. They show that over a 20-year period with random internal promotions filling positions in the level above due to retirements and dismissals, that the company efficiency is markedly higher. A high percentage of the random promotees show unexpected skills.

Those doing great jobs shouldn’t be overlooked, of course. They can be rewarded with increased pay, responsibility or more flexible working arrangements. The concept has similarities to the concept of swarm wisdom that I posted about last April 27. Of course the wild card in all of this is the management consultant who comes in with a big hatchet. Probably a necessary destabilization if a moribund Peter Pyramid has been built, but could be bad if we have promotion by lottery.

For the tycoons amongst us who wish to check out their company, there is a simulation that they can do assigning the number of staff at each management layer along with their levels of competence (2).

  1.  arXiv:1102.2837v2 [physics.soc-ph]

Leave a Reply