Dilbert-Peter model of organization effectiveness: computer simulations

Abstract: We provide a technical report on a computer simulation of general effectiveness of a hierarchical organization depending on two main aspects: effects of promotion to managerial levels and efforts to self-promote of individual employees, reducing their actual productivity. The combination of judgment by appearance in the promotion to higher levels of hierarchy and the Peter Principle (which states that people are promoted to their level of incompetence) results in fast declines in effectiveness of the organization. The model uses a few synthetic parameters aimed at reproduction of realistic conditions in typical multilayer organizations.