This is what happens when failure leads to a promotion

Kim (not her real name) is a scientist and tenured faculty member at a high-profile university. For years, she steadily moved up the hierarchy, yet no one could point to what she accomplished. She kept transferring from role to role, not because she succeeded. In fact, it was the opposite.

Kim wasn’t delivering measurable results, and no one liked working with her. She occupied an uncomfortable middle ground: not unsuccessful enough for the university to dismiss her, but no longer effective enough to stay.

They transferred her to a newly created role. It came with bigger, but opaque responsibilities. The result looked like a promotion, but functioned as avoidance. I study and speak about high achievers in the workplace, including in my recent book, The Success Factor, and have observed this problem resurface, leading to the departure of top performers.

What happened to Kim is what I call promotion by failure. It’s the practice of moving an underperforming or difficult employee into a higher status role, often with increased influence and reduced accountability, to avoid directly addressing the poor performance. Ultimately, this isn’t just a performance issue—it’s a leadership and systems failure.

Achieving promotion by failure

When companies reassign, elevate, or create new positions for under-performing employees, this misaligned intervention sends an alarming signal with reverberating negative ripple effects on teams and the entire organization. The displacement strategy removes the bad employee from immediate friction but ignores the root cause. Sadly, the underperforming employee will eventually repeat their behavior in a new role.

But promotion by failure doesn’t help anyone. It’s not a developmental rotation, and it doesn’t provide a stretch assignment to the troubled employee. What it does do is reward poor behavior without consequence and leaves a trail of damage and mistrust in its wake.

Reasons for this lack of accountability can be structural, psychological, or legal in nature. We typically see this to be more prevalent in large bureaucratic systems, organizations with weak performance management, and cultures that avoid conflict. Letting someone go may open a company up to litigation, especially if there’s a lack of clear performance metrics. As a result, they end up shuffling the employee around so they can make sure that they don’t do too much damage. Organizations then repeat the cycle until the employee leaves on their own, or the issues escalate to the point where companies cannot ignore the issue.

Weak leaders share blame in fueling promotion by failure. They are often conflict-avoidant and worry that any potential grievances will damage their reputation.  They’ve also convinced themselves that the role wasn’t the right fit for the individual or have overestimated the power of a new role for the individual, instead of addressing their capability gaps.

Why high performers leave when this happens

Ultimately, while they might have avoided conflict by promoting a weak performer, there are unintended negative consequences.  Top performers, in particular, can become disillusioned, which leads to employee disengagement, lack of innovation, and retention issues.

High performers value competence, clarity, and fairness. Promotion by failure violates all three. It signals that results don’t matter, negative behavior has no consequence, and excellence is optional. This causes your top performers to be disenfranchised, cynical, and disengaged. And when they feel all those things, eventually they leave the organization.

As a result, organizations don’t only end up losing their best talent, but also their trust. And when these people leave, who remains? Those who operate by smoke and mirrors rather than achieve results.

The organizational cost that leaders underestimate

It’s not just poor leadership. There’s a tangible organizational cost and messaging when you reward poor performance.

• Erosion of performance culture: High performers have the image that optics trump output, and that they don’t reward consistent results as much as visibility or tenure. It also sends a signal that performance standards vary depending on who the company is evaluating.
• Loss of institutional credibility: When communication about merit conflicts with reality, employees no longer trust promotion or role assignment decisions. Employees respond to leaders’ explanations with silence, rather than buy-in.
• Increased attrition among top talent: High performers leave due to neglect. The strongest contributors leave quietly, without waiting for counteroffers. The exit interviews raise red flags of poor leadership rather than workload or salary.
• Normalization of mediocrity: Instead of rewarding high performance and productivity, average becomes the acceptable norm, which stunts innovation. Feedback and brainstorming sessions shift from improvement to reassurance, while the company treats excellence as optional rather than expected.
• Succession pipelines filled with the wrong people: If you ever wondered why certain people are in leadership roles, it’s because in some institutions, promotion is about loyalty rather than capability. Companies fill those roles with people who create the least resistance.

What senior leaders need to do

If you’re a leader who is committed to excellence, it’s time to address this overlooked (yet undeniable) reality.

• Address performance early and directly: Make feedback specific and behavior-based, not tied to outcomes or personality. Give ideas on how to improve performance and communication.
• Separate compassion from avoidance: There is no way around it. Difficult conversations need to happen despite discomfort, not when your top performers leave en masse. It’s necessary for leaders to pair, not substitute, their support with accountability.
• Create consequences that don’t rely on relocation: You should not reward poor performance. If someone is unfit for the role, think about reducing or redesigning their leadership role. Their compensation, scope, or authority changes should reflect performance realities, not wish lists.
• Invest in real development or make hard exit decisions: Measure progress based on pre-agreed milestones. If improvement doesn’t happen, act decisively rather than extending the process indefinitely.
• Audit roles that exist without outcomes: Do an inventory of the leadership roles and flag those positions without clear deliverables. If necessary, redesign or eliminate them, and align titles and influence with measurable contributions.

The mistake you accept becomes the new standard. Promotion by failure is rarely about one person. It mirrors what leaders tolerate, reward, and avoid. Ending promotion by failure is not about being harsher. It’s about being honest, accountable, and fair.

It’s time to stop using title inflation as conflict management.