The Peter Principle Tested

Alan Benson, Danielle Li, Kelly Shue have put the principle to the test (summary here) by looking at promotions and performance of some 40,000 sales workers across 131 firms. Sales workers are a good place to look for the principle in action because it seems natural to promote the best sales people yet the best sales people do not necessarily make the best managers. If firms promoted workers on the basis of managerial potential rather than current performance, employees may have fewer incentives to work as hard.

Source: marginalrevolution.com