Saswata,
Ah yes, "The Peter Principle". It is an old theory and one that is not talked about so much these days, possibly because management styles have changed over the years.
I don't remember all the details as it is a long, long time since I read the book. However, if I remember correctly, he was writing, in part at least, about the UK Civil Service. After I left school, I worked for 20 years for the Australian government and when I joined almost all promotion was done via seniority, not merit. What it meant was that you were promoted when your turn came, and that could take many years. Every year books were published showing your ranking in the service, so you could see how many people were ahead of you in the pecking order. Very scary!!!
That was abolished at some point and when vacancies occurred anyone could apply for the position as people were to be chosen on merit, i.e. did they have what it takes to do the job. Now it was a nice idea in theory, but we all know that there is some bias in selecting candidates for positions. Sadly, within the offices I worked, we all basically knew who would get the job when a position was advertised. We all knew who the boss's friends were and who was good at selling themselves regardless of their poor work skills and ethics. So the wrong people continued to get the jobs. Now there was a new element to this merit-based recruitment, and that was an appeal process. You could lodge an appeal against a decision and if it was judged to have merit, it would be heard by an independent board. But few people managed to overturn a decision. At one point I got promoted to a job next level up, and 4 of my peers appealed the decision. The 4 people in question had been there longer than me, so - theoretically - had more experience and knowledge. However, in terms of work output, ability, skills, and leadership (it was a supervisory position), I ran rings around the other 4. The appeal was dismissed and my promotion was confirmed. Now I suspect that this had been planned as I had been sent on a management course some months earlier, whereas the other 4 had not. The other point was that I was not a buddy of the boss! So nearly 40 years later, I am still mystified how I got the job. I suspect someone higher up the food chain had a hand in it.