Years ago management guru Laurence Peter said something profound: In organizations, employees rise to their level of incompetence and then stay there. This process now is known as the Peter Principle.

You can picture how this process happens. An entry-level employee does good work and as a result gets promoted.

Different skills, involving motivating other employees, are needed at the new job, which might be in management. The employee may have those skills and get promoted again. Yet new skills are needed. These might include handling challenging competition or dealing with demanding supervisors. The employee lacks these skills and performs poorly but always completes assigned work.

The person meets the criteria for neither promotion nor firing and is now stuck in that position. The person has reached his or her level of incompetence.

The Peter Principle explains why so many individuals in organizations are incompetent. They make a living despite performing poorly. They often dislike their job because they sense they are not good at it or because they have no upward mobility.

It would nice if the person could be demoted to a level of competence, but few organizations do that. Demotion is too ego battering. In military fiction, a high-ranking officer breaks an incompetent in rank by pulling the rank insignia off his uniform while the broken soldier stands at attention.

To avoid the sad results of the Peter Principle, some organizations, such as law firms and universities, follow an up-or-out policy. Employees who do not get promoted in a certain period of time are fired. Getting the boot for not rising is even more disheartening than being demoted.

My limited personal experience in rising to my level of incompetence involved moving from work as an academic to work as an administrator. I accomplished my goals for the organisation but at a substantial cost to the organization and to me. I then returned to work as an academic, where life is considerably more fun. My move amounted to self-demotion, and it was one of the best decisions I ever made. 

Years ago I saw a psychotherapy client who had recently been promoted from a sales position to management. He found directing others to be extremely stressful. He was suicidal when I first saw him. Moving back to sales was all the treatment he needed. 

Self-demotion can be a good move.