The Peter Principle states that "In a hierarchy every employee tends to rise to his level of incompetence."  A generalized version of it states that "anything that works will be used in progressively more challenging applications until it fails."  We see this all the time in PR.  You have a solid, intelligent, and hardworking consultant or account manager, whom you then proceed to put to work on successively larger clients, or promote regularly like clockwork.  All goes well until the day this person comes to you, all burned out, and resigns.  Of course that day may not have happened yet, which under the Principle simply means they have not reached their level of incompetence. 

We tend to promote quite quickly in the PR industry, especially in very tight labor markets such as, well, most major cities in Asia.  Principally you promote to reward and retain, but it's also sound business sense to match a person's capabilities with their title and billing rate, so they are billed out to clients at the correct rate.  Where the person is not yet ready to be promoted, you create a development plan, so that you can identify areas for improvement, and chart them a path for a promotion down the road, with quantifiable milestones and allowance for course corrections along the way.  Or you have someone who doesn't want a promotion, and is quite happy doing what they do indefinitely.  That's fine too. 

The toughest decision is when you have someone who supposedly can't be developed, and who isn't operating at the level they should be.  Frequently the only option is to exit (an euphemism for termination).  Before you get to that point though, there are many difficult questions to answer, and getting at the truth can often be an art.  How do you decide somebody "can't be developed?" How do you know they wouldn't perform better in a different job? If that's the case, do you have a different job elsewhere in the organization for them? Should you risk it?

This "Promote, Hold, Develop or Exit" philosophy lacks a fifth option, which is demotion.  If you have someone who is promoted to to their level of incompetence, you need to recognize the fact, sit down with them, and have an honest chat.  Because it is YOUR mistake, as their manager, not theirs.  YOU promoted them, and now you must be accountable.  Demotion is a nasty word, because its negative connotation (opposite of promotion) masks its true value (when done with the noblest of intentions), which is redeployment and giving someone a second chance to excel.  It's a pity nine times out of ten an offered demotion (or redeployment) is not taken, because it can lead to much better things down the road.

And don't forget, sometimes you need to ask yourself if YOU have been promoted to your own level of incompetence.  And should you ask to be re-deployed.  That level of self-awareness can be very hard to attain.