According to Wikipedia, the Peter Principle states that "in a hierarchy every employee tends to rise to his level of incompetence". Aside from anecdotal evidence, has this ever been proven or disproven by science?
In this discussion paper,
- Lazear, Edward P., [The Peter Principle: A Theory of Decline (April 2003)]. IZA Discussion Paper No. 759. Available at SSRN
the author argues that the effects of the Peter Principle can be explained by a regression-to-the-mean rather than poor promotion practices.
More importantly, for this question, he summarises some of the evidence (with references):
There is substantial evidence of the Peter Principle. In addition to papers from the marketing and organizational behavior literature, there are a number of findings in empirical labor economics that support the claim. In an early paper that used subjective performance evaluation, Abraham and Medoff (1980) reported that workers’ subjective evaluation scores fell, the longer they were on the job. In Lazear (1992), it was found that the coefficient of job tenure in a wage regression was actually negative. The longer a worker was in a particular job, given his tenure in the firm, the lower his wage. The reason presumably is that the better workers are promoted out of the job so those with a given number of years of firm experience who have fewer years in a job are less likely to have gotten stuck in that job. Baker, Gibbs and Holmstrom (1994) replicate this finding in their data and Gibbs and Hendricks (2001) find that raises and bonuses fall with tenure.
So, yes, there is empirical evidence that the Peter Principle holds, even if there is controversy about why it holds.