- The Peter Principle still applies in many organizations
- A majority of employees don't get to do what they do best
- Learn how to construct a culture of growth, not a corporate ladder
The corporate ladder still haunts the workplace today.
Over 50 years ago, Laurence J. Peter's The Peter Principle hit the nail on the head when describing the flaws of the ladder. The idea of the Peter Principle is that people rise to their level of incompetence because companies incentivize them to.
Thirty years after that, Gallup's book First, Break All the Rules called our attention to "the blind, breathless climb to the top" -- referencing how unnatural it is for us all to be pining for the same position.
These challenges still ring true today.
Gallup research shows that less than half of employees strongly agree they have the opportunity to do what they do best every day.
People typically have to move up if they want any sort of financial or career growth. Bad bosses are everywhere because employees often end up in positions they don't like or aren't good at. A Gallup study found that people are most likely to say they're promoted based on tenure or success in a prior role, not based on talent or what they do best.
Many of us have been tripped up by the corporate ladder -- even those who've made it to the top.
- We've worked with a leader who wasn't great at their job, wondered how they got there and then became disengaged with the company because of it.
- We've applied for a role that wasn't a great fit, gotten it and ended up not liking it -- but, it came with a higher paycheck and a little more prestige.
- We've joined a company that can't figure out why there is so much turnover despite providing lots of ways to "climb the ladder."
Promoting the wrong people isn't good for companies or individuals. But providing the opportunity for growth is good for both, and people will seek it out.
Two top reasons that people give for leaving their company are lack of career growth and lack of opportunities to do what they do best.
So, let's step outside the traditional career framework for a minute and uncover more creative, proven ways to grow people based on what they do best. Let's think about the explicit and implicit messages in your workplace that reinforce what is accepted and encouraged when it comes to development.
Let's reimagine how to build a culture of growth, not a corporate ladder.
What does your compensation strategy tell employees?
Compensation is an explicit message to everyone that communicates what is valued. And it's one of the biggest culprits in the blind breathless climb, in which people wear themselves out trying to obtain a role they won't succeed in.
If your organization's career development path mainly encourages pay growth or title advancement by securing a management role, it's likely working against what you really want. Not many people have the natural talent to manage, and what you really want is talented people in all roles doing what they do best.
People who have the opportunity to use their strengths are six times as likely to be engaged in their jobs and to strongly agree that they have the opportunity to do what they do best every day. And employees who get to do what they do best are 57% less likely to frequently experience burnout.
Compensation strategies often work against talent management strategies in this sense. Gallup research shows that just 21% of employees strongly agree that their pay and incentives motivate them to achieve individually.
So, consideration of how incentives may align or misalign with people's natural strengths and intrinsic motivators is a first step.
Lean away from asking, "What titles deserve higher pay?" Instead, ask yourself, "What kind of growth paths incentivize people to continue to grow their pay and prestige by developing their expertise in what they are best at -- while also achieving more for the company in the end?"
An alternative to the traditional, hierarchical development path is a growth plan that looks more like a jungle gym or spiderweb. In this way, the employee can experiment with new opportunities by growing horizontally, perhaps with new certifications, or diagonally, by trying out similar skills in a new division or with a new client.
The key is to always be thinking about When does this person shine the most? and then balancing that employee's talents, personal goals and expertise with what the company needs at the time.
There are still basics to creating an effective compensation package, like market comparability, sustainability based on organizational performance, impartiality across roles and tasks, and rewarding exceptional results. However, once the basics are met, leaders should get creative and consider how to build incentive systems that encourage individuals to grow by doing more of what they do best.
There's no doubt that a management or leadership role comes with a lot of responsibility -- but the very best in any role should have the opportunity to make at least as much as (or perhaps even more than) their manager when it makes sense for the company's goals.
Who gets open praise from leadership?
Like compensation, praise and recognition send a powerful cultural message about what leaders value.
When the focus of your recognition is to shine a light on individualized, strengths-based achievements, you encourage people to lean into their unique talents.
Great organizations foster cultures of growth by helping people follow their paths of natural inclination and excellence.
You can develop specific award categories to highlight people's strengths and how they use them to make a difference and get results.
One practical example could be a "Power of 2 Award" celebrating a pair of individuals who have partnered together to achieve something bigger than themselves by each leveraging their own unique capabilities to achieve excellence. Or, a "Team Excellence Award," where a leader recognizes how each member has added something to make a difference for the whole. This sort of collaboration that yields important outcomes happens all the time in organizations but may not be called out or celebrated often enough.
Who gets promoted or recruited to management at your company?
Is it the people who look really good on paper, articulate their achievements well or have been the "most loyal"?
Or, is it the ones who make time to listen to and understand their team members, setting them up for success while navigating the nuances of human relationships?
It sends a positive cultural message when leaders choose managers who prioritize watching out for employees and helping them grow -- coaches -- rather than self-promoters.
Great managers reinforce intrinsic motivators, which more effectively inspire employees than do extrinsic factors. People appreciate when their boss asks candid questions: What do you like to do? or Tell me about your best day at work. What made it your best day ever?
And people love when their manager looks for clues in their answers that help them refine their future assignments and opportunities.
With managers like this, employees don't have to chase "growth by role creep," which happens when job demands start to eclipse personal talents -- because they know their manager has their back and they regularly have open conversations about their development.
Culture of Growth vs. Corporate Ladder
What it comes down to: Great organizations foster cultures of growth by helping people follow their paths of natural inclination and excellence.
A January 2018 Harvard Business Review article cited a great example of how this plays out. The authors pointed to how a director at Facebook, named Cynthia, discovered that she preferred solving problems with clients to "leading a large team of HR business partners."
In this case, the leadership team at Facebook helped Cynthia move from her people leader role into the problem-solving one she preferred. The organization allowed and even encouraged Cynthia to develop according to her unique strengths, thereby helping to spare her from the "blind breathless climb."
Gallup describes workplace culture as how things are done around here. An organization's culture and what its leaders value are communicated regularly by what those leaders say and do -- and especially in the decisions they make.
So, what decisions can you make today that tell employees, "You can grow and get ahead around here by doing more of what you do best"?
Reimagine your company's corporate ladder by helping people do what they do best:
- Download Gallup's perspective papers on creating a strengths-based culture and building a high-development culture through employee engagement.
- Learn how to align your employee compensation and talent strategies.
- Explore Gallup's workplace learning programs that support a culture of growth.
- Join us at the 2020 Gallup at Work Summit to learn from experts on how to transform your workplace strategies.