If you underemploy people as a society, you destroy social trust. Social trust increases agility because it reduces transaction costs and increases sharing of knowledge. Proper employmet builds trust. If you want a trust-filled company, then you must ensure that people have roles that fit their size.
If you have someone in a role that is too small for them, and promotion can’t happen, you should fire him or her because if you don’t you build distrust (which is more than destroying trust) among the company. That’s what I was thinking about.
INFOSEC, my previous consulting employer, was right in marginalizing me until I knew it was either I quit or they fire me. There was no way to promote me to a role that fit, even had they wanted to.
Keeping someone in a role that is too small breeds distrust among other employees as well as that person. If you find benefits to having these persons, create a new role that fits and increase their pay accordingly. Otherwise, you must, must, must, must, must get rid of them.
An exception would be if you are growing or transforming a group or division or company. But the rule would hold firm after the crisis has passed. Perhaps this explains why Churchill was useful for the war but given the boot as the Allies were obviously going to win? Even in these cases, it is very dangerous to do.
Image Credit: Winter night, looking down to Chateau D’Oex. © 2008 E. Forrest Christian.