A recent article in the Economist magazine discussed the advantages for both employers and employees of making lateral career moves within the management structure of an organization. These transfers generally mean assuming new duties of similar complexity and value to the company. Let’s look at some of the issues involved in promotional and lateral career moves.

Sometimes employees are victims of “The Peter Principle,” a management concept developed by Laurence J. Peter who observed people in a hierarchy tend to rise to “a level of respective incompetence.” That is, employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills used in previous jobs might not necessarily lead to success in other more demanding positions.

The long-term solution for an organization with employees floundering in work they are incapable of handling is to adopt career development policies that identify those needing additional managerial training and experience before making them eligible for advancement. Possible lateral moves should be included in the guidelines.

There are other strategies employers might develop to move employees stuck in position for which they are underperforming. In some instances, promoted employees must perform or lose their employment with the company. In other cases, employees may be placed in a probationary status for a period of time with both the company and the employee having the option of choosing to return the employee to the previous position or similar lateral jobs, if they exist.

Sometimes employers ease underperforming employees out of the company by offering generous separation packages that includes professional career counseling and sufficient compensation to find that next job.

Occasionally, companies adopt a less humane and more Darwinian approach (e.g. professional sports teams) to right size their management team. This approach involves vigorous competition among many employees for only a few available positions, resulting in some being let go. Workforce morale can suffer using this strategy.

Perhaps a better tactic to developing a management staff is to hire employees with a range of abilities and expectations that does not include everyone reaching for the top job. Since not everybody wants to be the CEO, they will naturally arrange themselves on the management hierarchy. In this arrangement employees might also seek lateral positions if their career aspirations with the company change.

Promoting technical workers into the management ranks can be problematic. Technical skills do not necessary prepare employees for management work. Instead, it’s often better to develop a parallel technical track that advances the employees in both rank and compensation. My experience is that many technical people feel undervalued in technical positions and apply for management positions as they believe it is the only opportunity for advancement and greater compensation.

While employees taking lateral transfers might see themselves as being demoted, it does save their employment and offers time and space to re-assess their future with the company.

Periodic goal-setting activities with employees that includes future career goals can take into account those activities with which the employee has had the greatest success and how that might translate into future promotions. The goal is to identify the sweet spot for the employee’s aspirations within the company and the training and experience necessary to achieve it.

An organization that recognizes its workforce contains employees with a variety of skills, abilities and motivation will make an effort to place each in a position where they can thrive and contribute to the success of the enterprise.

The Peter Principle doesn’t necessarily need to infect a company nor does the Darwinian approach that requires moving up or moving out. Sometimes a creative promotional or lateral move can save a valuable employee.