Evaluate people by input or output?

According to The Peter Principle, people in hierarchical organizations tend to be promoted until they reach a position at which they are incompetent. The way managers manage depends on whether they have achieved incompetence or are still on the path to it.

The competence of an employee is determined not by outsiders but by his superior in the hierarchy. If the superior is still at a level of competence, he may evaluate his subordinates in terms of the performance of useful work. … This is to say, he evaluates output.

But if the superior has reached his level of incompetence, he will probably rate his subordinates in terms of institutional values: he will see competence as the behavior that supports the rules, rituals and forms of the status quo. Promptness, neatness, courtesy to superiors, internal paperwork, will be highly regarded. In short, such an official evaluates input.

Emphases in the original.

Much of The Peter Principle is humorous and exaggerated, but the excerpt above is neither. It is simply a description of how organizations work.

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11 thoughts on “Evaluate people by input or output?

  1. For a similarly exaggerated (and humorous) but accurate view, I recommend Putt’s Law and the Successful Technocrat, which notes that the Peter Principle does not apply to high-tech, and that in fact technical organizations eventually achieve a competence inversion, as the incompetent continue to get promoted while the competent are stuck at lower tiers.

  2. I’ve always known of the Peter Principle, but never read it. Thanks for pointing out this fascinating passage.

    But does input count for nothing? Factors such as “Promptness, neatness, courtesy to superiors, internal paperwork” may have no direct bearing on output, but they may affect the morale of co-workers. Isn’t it possible that someone might get a lot of useful output, but at the expense of depressing output for the organization as a whole?

  3. Scott: Good points. You have to look at more than individual output. Someone could get a lot done personally and be a drag on others. I’ve seen that.

    The way I see it, the emphasis of the quote is that when someone does not understand what a subordinate actually does, he evaluates what he can understand, and assumes that what he understands is a good surrogate for what he doesn’t. If Mike tucks his shirt tail in and Joe doesn’t, Mike must be the better programmer.

    I had a conversation about telecommuting with a manager who said “If people aren’t here, how can I tell whether they’re working?” Her only way of evaluating people was to tell whether their office lights were on. She couldn’t imagine evaluating by their output.

  4. It’s probably not safe to assume that people cannot learn new things, given time.

    It’s also probably not safe to assume that situations do not change.

    We can approximate these sorts of qualitative drifts by generalizing out and pretending that there’s something constant and fixed going on, but those sorts of approximations can only be valid some of the time.

    Still, as a temporary description, the Peter Principle has some validity.

  5. This reminds me of an absolute absurdity in the engineering world. Your “Productivity” is usually computed as the number of hours billed to projects divided by your total work hours (with the balance taken up by administrative and marketing tasks). Management typically specifies a target percentage depending on your job category. An employee can effectively do little to no work but appear to be productive on paper. And believe me, there are people out there who have MASTERED this game.

  6. Yeah, those studies are a real eye-opener. Jack Welch has long criticized the HR function in general, and performance appraisal in particular as a wasted effort.

    As far as which Marxists, I meant pretty much all of those who actually believe in Marx’s theory that says economic value is determined by the labor input:

    “if the superior has reached his level of incompetence, he will probably rate his subordinates in terms of institutional values: he will see competence as the behavior that supports the rules, rituals and forms of the status quo. Promptness, neatness, courtesy to superiors, internal paperwork, will be highly regarded. In short, such an official evaluates input.”

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