Dilbert-Peter model of organization effectiveness: computer simulations

TL;DR

This paper presents a computer simulation model analyzing how promotion practices and self-promotion efforts impact the overall effectiveness of hierarchical organizations, highlighting potential declines due to the Peter Principle.

Contribution

It introduces a simulation framework that models organizational effectiveness considering promotion biases and self-promotion, providing insights into organizational decline mechanisms.

Findings

Promotion based on appearance can lead to inefficiency.

Self-promotion efforts reduce actual productivity.

Hierarchical effectiveness declines rapidly under certain promotion strategies.

Abstract

We provide a technical report on a computer simulation of general effectiveness of a hierarchical organization depending on two main aspects: effects of promotion to managerial levels and efforts to self-promote of individual employees, reducing their actual productivity. The combination of judgment by appearance in the promotion to higher levels of hierarchy and the Peter Principle (which states that people are promoted to their level of incompetence) results in fast declines in effectiveness of the organization. The model uses a few synthetic parameters aimed at reproduction of realistic conditions in typical multilayer organizations.