The notion that every employee within a hierarchy tends to rise to his or her level of incompetence is referred to as

The notion that every employee within a hierarchy tends to rise to his or her level of incompetence is referred to as "Peter Principle".

Explanation:

Being developed by Laurence J. Peter observes that people in a hierarchy tend to get increased to their "level of incompetence". This was written clearly in 1969 book The Peter Principle written by Raymond Hull and Dr. Peter.

In most of the organisational hierarchies namely corporations, for all the employees (workforce) there will be promotion until they reach the level of their respective incompetencies.