There's been some research on promotions. It is not at all uncommon to promote people who are good at what they do. If they are then good in the new position, they'll likely get promoted again, and again, and again. This continues until they are no longer good at what they are doing. They are not demoted. In this way, promotions ensure incompetent management.
Companies would actually be more effective, it was shown, by promoting randomly or by promoting both the worst and best workers. Being good at the low level of a job, even being great, in no way ensures you can be good at managing that job. The skills are not closely related.