The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence.

The Peter Principle is thus based on the paradoxical idea that competent employees will continue to be promoted, but at some point will be promoted into positions for which they are incompetent, and they will then remain in those positions because of the fact that they do not demonstrate any further competence that would get them recognized for additional promotion.

According to the Peter Principle, every position in a given hierarchy will eventually be filled by employees who are incompetent to fulfill the job duties of their respective positions.