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I can see the benefit here of keeping people motivated to continually achieve more but it seems based on the assumption that everyone is capable of going all th

I can see the benefit here of keeping people motivated to continually achieve more but it seems based on the assumption that everyone is capable of going all the way to the top. In the worst case scenario, a large number of people go "up" to the point where they're no longer capable of doing the job they're in and then go "out" after a brief period of doing their job badly. These people may well have been very competent at their previous level of authority and so the business as a whole loses out. Additionally companies which state outright this is their policy often have quotas of people who should go "out" which I've seen, in particularly talented groups, lead to an almost random selection of people going out despite the entire group being so close together in ability than no meaningful distinctions can be made. EDIT: re jonnathanson response below, agree completely that if up can mean a person is performing solidly and achieving good results while improving year on year then such a system can be very beneficial. My criticism is much more focussed on systems where up explicitly means moving through grades, especially where there are attempts to apply quotas to who goes up and who goes out.

jonnathanson 14y ago
I think it depends on how we define "up." I think it's entirely fair to have a culture that encourages up-or-out, wherein "up" may mean professional advancement, or it may simply mean that the person is performing solidly and achieving good results, or improving year over year. In this case, "up" means improvement more than it necessarily and literally means up the ladder. I realize this reponse could be interpreted as a bit of a no-true-Scotsman reply, but honestly, it's intended to be a clarification of my original post.
msluyter 14y ago
"In the worst case scenario, a large number of people go "up" to the point where they're no longer capable of doing the job they're in and then go "out" after a brief period of doing their job badly." AKA, "The Peter Principle." http://en.wikipedia.org/wiki/Peter_Principle http://en.wikipedia.org/wiki/Peter_Principle -- The Peter Principle is a belief that, in an organization where promotion is based on achievement, success, and merit, that organization's members will eventually be promoted beyond their level of ability. The principle is commonly phrased, "Employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently. It was formulated by Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous[1] treatise, which also introduced the "salutary science of hierarchiology".
- jonnathanson 14y ago
  Yes, but I see no proof that the Peter Principle is any more prevalent in up-or-out organizations than in other types of organizations. PP occurs in every large company.
  - jholman 14y ago
    Up-or-out is supposed to prevent the Peter Principle. When the PP is active, people "rise to the level of their incompetence", and then stay there indefinitely. In Up-or-out, if you stop rising, then (after some suitable attempts to help you get unstuck) the company starts encouraging you to leave (with increasing vigour). They get the benefit of your knowledge at every level that you can operate at.

jonnathanson 14y ago

I think it depends on how we define "up." I think it's entirely fair to have a culture that encourages up-or-out, wherein "up" may mean professional advancement, or it may simply mean that the person is performing solidly and achieving good results, or improving year over year. In this case, "up" means improvement more than it necessarily and literally means up the ladder. I realize this reponse could be interpreted as a bit of a no-true-Scotsman reply, but honestly, it's intended to be a clarification of my original post.

msluyter 14y ago

"In the worst case scenario, a large number of people go "up" to the point where they're no longer capable of doing the job they're in and then go "out" after a brief period of doing their job badly." AKA, "The Peter Principle." http://en.wikipedia.org/wiki/Peter_Principle http://en.wikipedia.org/wiki/Peter_Principle -- The Peter Principle is a belief that, in an organization where promotion is based on achievement, success, and merit, that organization's members will eventually be promoted beyond their level of ability. The principle is commonly phrased, "Employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently. It was formulated by Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous[1] treatise, which also introduced the "salutary science of hierarchiology".

jonnathanson 14y ago
Yes, but I see no proof that the Peter Principle is any more prevalent in up-or-out organizations than in other types of organizations. PP occurs in every large company.
- jholman 14y ago
  Up-or-out is supposed to prevent the Peter Principle. When the PP is active, people "rise to the level of their incompetence", and then stay there indefinitely. In Up-or-out, if you stop rising, then (after some suitable attempts to help you get unstuck) the company starts encouraging you to leave (with increasing vigour). They get the benefit of your knowledge at every level that you can operate at.