Efficient Promotion Strategies in Hierarchical Organizations

TL;DR

This paper investigates promotion strategies in hierarchical organizations, demonstrating that merit-based promotions can reduce efficiency and that alternative methods like random selection can mitigate these effects, with findings applicable to real-world organizational design.

Contribution

It extends previous agent-based simulation results to more realistic hierarchical structures, showing the robustness of alternative promotion strategies in improving organizational efficiency.

Findings

Meritocratic promotions can negatively impact efficiency under certain conditions.

Random promotion strategies can counteract the negative effects of merit-based promotions.

Results are applicable to real organizational contexts.

Abstract

The Peter principle has been recently investigated by means of an agent-based simulation and its validity has been numerically corroborated. It has been confirmed that, within certain conditions, it can really influence in a negative way the efficiency of a pyramidal organization adopting meritocratic promotions. It was also found that, in order to bypass these effects, alternative promotion strategies should be adopted, as for example a random selection choice. In this paper, within the same line of research, we study promotion strategies in a more realistic hierarchical and modular organization and we show the robustness of our previous results, extending their validity to a more general context. We discuss also why the adoption of these strategies could be useful for real organizations.