10 people write 10 reports in 10 hours. If you hire 10 more people how many reports will all 20 people write in the same time? 20, right? Wrong! According to Parkinson’s Law it’s still 10.
Published in 1942, the theory states that “work expands to fill the time available to complete it”. The reasoning is that first, managers crave power and more people to order about and, second, more people create more work for each other. Parkinson’s Law has often been used to victimize the civil service, but it is valid for all organizations devoid of good leadership and permeated by an unimaginative work ethic.
Innovation is anathema to rigid outfits because it involves redesigning work. When it becomes possible through re-engineering (1990s) so 5 people and a machine can generate 100 reports, or through digitalization (these days) so 5 people and a cloud can let users generate any report they might need, the Parkinson crowds get angry. Their power structures and jobs are threatened and they mobilize to deny or resist the new developments. This is why “lean” and “agile” have become buzzwords today.
Now imagine you are an invisible spirit looking around an organization. How many incompetent managers do you see? Do you see plenty who are really not up to their responsibilities? Welcome to the world of the Peter Principle. Published in 1969, this states that “in a hierarchy people are promoted to their level of incompetence”. And we are not talking about nepotism or unfairness. The best are promoted. If they are good they are promoted again. And so on until they reach a level at which they are no longer competent to perform well.
Debates on the merits of meritocracy take place in all organizations and societies. In a competitive context, incompetence does not allow the mediocre to stay afloat for long and meritocracy is valuable and fair.
Performance management in practice means dividing people into two groups, the judges and the judged. It calls for ranking people on talent, drive, behaviour, potential and countless more sub-categories.
Designers of performance management systems have many tools in their arsenal to make the judgement as “right” and as “fair” as possible. Personal reviews can be 360 degree involving subordinates and peers as well as superiors. There are assessments for nearly everything and big data will probably provide more on the less tangible things like creativity and likeability. The judgment will most often be in accordance with the values and practices of the organization’s leadership and imperfect. A promotion, like a recruitment, is always a risk for both parties.
From an innovator’s standpoint, it is better to have a culture of meritocracy and good systems to support it. However the criteria for advancement must give a lot of weight to creativity, collaboration and the capacity to learn and change. This will at least minimize the evils of the Peter Principle, for as long as we do have hierarchies and we value experience.
Parkinson’s Law has done wonders to expose the inefficiencies of bureaucracy, and the Peter Principle has exposed the imperfections of meritocracy. These classics of management theory are surprisingly contemporary too. And if you have a sardonic sense of humor, when you see work expanding to fill people’s time, and people promoted to their levels of incompetence, you will keep smiling.