Why would they have to be idiots? Doesn't this just create a crummy atmosphere where promotions only go to people unwilling or unable to leave the organization?
Because when the employee was asked what they wanted to be doing in their career, their answer amounted to "be working somewhere else".
> Doesn't this just create a crummy atmosphere where promotions only go to people unwilling or unable to leave the organization?
There's a difference between "people who are willing to leave the company if it cannot provide them what they want" and "people whose desires appear to center around leaving the company".
OP: "When asked about where I wanted to be in my career [...] I was honest about having my resume out there"
He didn't "advertise" it -- he just gave a honest answer when questioned. If this is "advertising" for you, then your "default" behaviour would be "be economical with the truth", i.e. white lies, i.e. being fundamentally dishonest... which means OP is right.
"I am actively looking for jobs at other firms" is not an answer to the question of "where do you want to be in your career", except insofar as it can be read to imply an answer of "not here".
So, it was honest, but not really (except indirectly) an answer to the question asked, and quite likely, in any case, not the most productive and relevant honest answer.
If the reason other opportunities were being sought is that those opportunities offered features X, Y, and Z that the employee's current position didn't, an honest but more direct and relevant answer would be "I'd like to be doing more of things like X, Y, and Z". That would directly answer the question, and provide something positively actionable by the employer, and be no less honest than "I've got my resume out and am actively looking at outside opportunities".
There's two possibilities (based on the scenario as described): either the employee was fed up with the company and really wanted out, and then the answer given was not only honest but reasonably relevant (if somewhat, perhaps diplomatically, indirect), or the employee had particular things they wanted in their career that they weren't currently getting, and failed to give the most relevant perfectly honest answer to the question asked, and instead gave an incomplete, tangentially relevant non-answer which implied an unfortunate and inaccurate answer to the question actually asked.
It does not amount to that. In many, many, cases people start looking for jobs wishing they could stay at their current job.
Assuming no relevant facts were omitted from the description of events, it does, in the context of the question it was offered in response to.
> In many, many, cases people start looking for jobs wishing they could stay at their current job.
Sure, they do. But the answer to the question "Where do you want to be in your career?" in those cases would focus on the things that they wanted to enable themselves to stay in and love the job with their current employer, not the fact that they are looking for outside opportunities (the latter might be mentioned in the context of specific desires and the fact that certain outside opportunities seemed to be the only way to realize them, but even then the looking for outside opportunities would be secondary to the main answer about desired job features, not the main answer to the question.)