Coined by Laurence J. Peter, the Peter Principle supposes that in any hierarchy, be it a company or an institution, employees tend to get promoted based on their performance in their current role, rather than their abilities relevant to the intended role. This generally results in people rising in the hierarchy until they reach a level where they are no longer competent, creating inefficiency. For example, a great salesperson might keep getting promoted until they become a poor manager, struggling with team management and administrative tasks. To circumvent this principle, companies are advised to promote based on future role competency rather than current role accomplishment.