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Reviving the 'Peter Principle': Firms Paying More for Less-Qualified Workers

By Carrie Johnson
Sunday, September 24, 2000; Page L01

Thirty years ago, a slim book helped a generation of American workers to understand why their companies seemed so, well, fouled up.

To hear some personnel directors and technology grunts tell it, a new edition might be in order.

The occasionally off-the-wall book first entered popular culture in 1969, before many in the country's vast Net class learned to read. But to this new audience, "The Peter Principle: Why Things Always Go Wrong" holds surprisingly fresh appeal in explaining the failings of management and the guy in the next cubicle. (For them, Amereon House is reprinting "The Peter Principle" in hardcover next month.)

The Peter Principle--which argues that people eventually are promoted to their level of incompetence--is playing out in today's high-tech sector as companies hard-pressed for employees pay more and more money for less qualified candidates. When one start-up fails, the cycle continues as refugees improbably land even more responsibilities and fatter salaries at the Web company down the street.

Ushered in by the imbalance between a dwindling supply of experienced techies and a raging demand for their services, the Peter Principle can carry harsh consequences for employees as well as rapidly growing businesses.

"It's a matter of expectations," says Barbara Mitchell, a human resources consultant at Vienna's Millennium Group International. "If [job seekers] make a big leap and get paid almost more than what they're worth, or the job is worth, and then transition back, they are going to be in for a shock. On both sides, the organization and the applicant need to be smarter."

In recent weeks, @Work readers have called and e-mailed with stories about how difficult it can be to find the right job, only to realize after talking with recruiters or doing research on the Web that their salary demands were far out of line with the market. It doesn't help that while some job seekers share compensation data with friends, the information is prone to exaggeration or can depend on highly individual factors such as how well a person communicates on the job. (Hint: Job hunters should contact professional associations, Web sites and trade publications to get more accurate salary ranges for the position they're seeking.)

Some human resources experts believe the trend toward filling positions with unqualified people will persist for years.

"My take on it is, it's just basic supply and demand," says Gary Cluff, a personnel consultant at Cluff & Associates in Northern Virginia. "As long as we have that supply shortfall, there will be salary creep. All the demographers are telling us this labor shortage will last five to seven years."

Cluff says the problem is exacerbated as desperate technology companies spend too little time interviewing job seekers and make spur-of-the-moment decisions without a clear idea of what qualifications candidates need to succeed. Indeed, he points to some firms that boast they hire workers on the spot--after an hour or less of interviewing--at recruiting events such as job fairs and open houses.

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