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The Dunning-Kruger Effect and the Peter Principle: A Fatal Combination

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Ygnacio “Nash” Flores, Don Mason & Tracy Rickman
October 7, 2022

People that rise quickly in an organization possess the trait of confidence and the ability to use their knowledge for the benefit of their organization. Confidence in employees is prized; however, administrators need to be cautious that the confidence of an employee is not a result of the Dunning-Kruger Effect. The Dunning-Kruger Effect results when a person deviates from rational thinking and makes judgements based on a subjective reality they create. This imagined realty is dangerous because its foundation is false. Decisions made on the spectrum of the Dunning-Kruger Effect can range from lost productivity to severe injury or even death.

Working in conjunction with the Dunning-Kruger Effect is the ability of people and administrators not to recognize when a person has reached the level of incompetence as described in the Peter Principle. According to Laurence J. Peter, in his book The Peter Principle, (1969) people in a hierarchy tend to rise in management until they become incompetent in their new tasks. As administrators promote people based on previous accomplishments, there comes a point where the person’s skills and competencies cannot perform at the new level of performance expectations.

Administrators need to be aware of the potential for co-occurences of the Dunning-Kruger Effect and the Peter Principle, coming together when hiring or promoting employees. Recognizing that past accomplishments are not a guarantee for future performance, administrators need to develop the means to evaluate people on what will be required at the next level in the hierarchy of responsibility within an organization.

Likewise, when a person is unaware of their actual abilities, they tend to believe they can do more than their abilities allow them to. The result is failure. While the opposite of the Dunning-Kruger Effect is the Imposter Syndrome, where the individual feels as though they have not earned a reward nor are deserving of recognition, the overzealous person can make decisions detrimental to the organization. The competence or ability of a person at their current role does not directly reflect future success moving forward. Promotions and expanded opportunities within the organization need to be calculated. The belief in the need to promote individuals who have been loyal to the boss, or the organization can have deleterious effects on an organization. Just because a person has completed required tasks does not equate to guaranteed success. The result can lead to less production and future problems when capabilities and skills are overlooked in an evaluation process.

Administrators must look for signs of both the Dunning-Kruger Effect and the Imposter Syndrome as they develop their people. Due to the subjectivity of decision making by those with extreme self-confidence, not having a desire to promote team concepts or explore group dynamics, leaders should view individuals as needing support in rational decision making. This false narrative an administrator imposes on subordinates can lead to a dysfunctional work environment or cause organizational stress as people in the organization see the fallacy of people promoted beyond their skills or capabilities. Promotions, added responsibilities and advanced opportunities benefit the employee and the organization until those individuals can no longer complete the needed tasks, make the needed decisions or simply avoid all responsibilities. This can take place over a brief period or over many years.

Levels of incompetence can be measured in many ways. The assessment of senior administrators, the lack of support from subordinates or the abandonment of peers can lead to a new direction in leadership. The Peter Principle inspires the need for the realization that the individual is not capable of advanced responsibilities, has not been trained to complete associated tasks and does not have the skill set to manage them. Doing well in the past job does not necessarily mean future performance will be successful.

The Dunning-Kruger Effect causes internal and external issues due to the way in which it can mask incompetence. Administrators need to view the current role of the employee and encourage growth while ensuring the needs of the current aspects of the job are being met. The need for promotion, career shifts and support of company or organization goals should always be the focus. Staying internal when making employment decisions or going to the “outside” for hiring are decisions administrators must consider with care. Having knowledge of the Dunning-Kruger Effect while exploring the Peter Principle should be considered essential when developing employees. Many agencies and organizations have a probationary period just for this reason. The possibility exists that advancement internally of a loyal, prized employee might best serve the organization where they currently are as compared to advancement. Knowing when to tell an employee that they are serving an organization best where they are takes a firm resolve.

Authors: Dr. Ygnacio “Nash” Flores and Don Mason are faculty at Rio Hondo College. Dr. Tracy Rickman is faculty at Tarleton State University.

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