The Peter Principle states, "In a hierarchy every employee tends to rise to his level of incompetence."
In his book, The Peter Principle (1968), Laurence Peter's argues that for each individual in an organisational heirarchy, the final promotion is from a level of competence to a level of incompetence. The result being that, over time, every post tends to be occupied by someone who is incompetent.
The practical application of the Peter Principle is that it allows assessment of the potential of any given employee for promotion to a higher level on the basis of job performance in his or her current position. When an employee reaches his or her "level of incompetence", that employee will have a poor or no chance at all of being promoted any further, thus achieving the ceiling of his or her career growth within that organisation.
If you feel you may have reached your level of incompetence, now is the time to assess your career and explore additional opportunities for personal development.
If you have a member of staff who is excellent in their current role, and you are considering them for promotion, you might want to agree a secondment into the role for 6 months to see how well they do.
