The Peter Principle is a theory originated by Dr. Laurence J. Peter which states that employees within a hierarchical organization advance to their highest level of competence, are then promoted to a level where they are incompetent, and then stay in that position.
This follows from the use of promotion as a reward for success. As long as a person is competent in his current position, he will be promoted to the next higher one. By iteration, the only way a person can stop being promoted is to reach a level where he is no longer able to do well, and thus does not appear eligible for promotion.
Source: http://en.wikipedia.org/wiki/Peter_Principle
