No manager in the history of the world has said to herself, "Boy, I really want to promote mediocre people and create some Dilbert-style dysfunction around here!" Yet anyone who has ever worked at a large company can tell you that, despite the obvious attractions of high standards and good sense, organizations somehow seem to inexorably fall into stereotypical office absurdities as surely as the moon orbits the earth.

Why is that?

Top VC Ben Horowitz thinks he knows the answer. In his much recommended recent book The Hard Thing About Hard Things, Horowitz explicates "the Law of Crappy People," a gem of business wisdom unearthed by the consistently interesting blog Farnam Street recently.

"The Law of Crappy People states: For any title level in a large organization, the talent on that level will eventually converge to the crappiest person with the title," Horowitz explains. "The rationale behind the law is that the other employees in the company with lower titles will naturally benchmark themselves against the crappiest person at the next level. For example, if Jasper is the worst vice president in the company, then all of the directors will benchmark themselves against Jasper and demand promotions as soon as they reach his low level of competency."

A better kind of corporate combat.

If a light bulb of recognition went off in your head upon reading that, be comforted that Horowitz not only explains the phenomenon but also offers a solution to help businesses avoid it. Your promotion process should resemble the process by which students advance at a karate dojo.

Nope, there's no hitting or kicking involved (sorry if you had anyone particular in mind). Instead, ensure fair (and fist-free) combat among your team by starting "with an extremely crisp definition not only of the responsibilities at each level but also of the skill required to perform the duties. When describing the skills, avoid the generic characterizations such as 'must be competent at managing a P&L' or 'must have excellent management skills.' In fact, the best leveling tools get extremely specific and even name names: 'should be a superstar recruiter-- as good as Jenny Rogers.'"

Once these benchmarks for moving up are set, you'll need to set up a "promotions council" to review all promotions across the company. "When a manager wishes to promote an employee, she will submit that employee for review with an explanation of why she believes her employee satisfies the skill criteria required for the level. The committee should then compare the employee with both the level's skill description and the skills of the other employees at that level to determine whether to approve the promotion," writes Horowitz.

Have you witnessed "The Law of Crappy People" at work?