Posted October 28, 2005 to Moving Forward | Section Home | Print

Peer Nominations: A Simple Way to Predict Executive Success

Allen Kraut likes to tell the story about former GE CEO Reginald Jones who asked key executives who would replace him should he get killed in an airplane accident. The most common answer was “Jack Welch.”

Kraut, an industrial-organizational psychologist who specializes in organizational development, says the story substantiates what he has been researching for the past 25 years—that a simple and effective way to predict executive success is to ask colleagues on the managerial track.

“People who work with each other day in and day out know who among their ranks is likely to advance to corporate leadership. Colleagues see a different side of each other than management often sees. They know how good a person really is. And, the reverse is true: they know when someone is not executive potential,” says Kraut.

He likens the process to identifying minor league baseball players who not only have the potential to play in the majors but also to become Hall of Famers. “Ask any kid on a team who the best players are and they will be close to total agreement. They know because they see each other perform on a regular basis,” he points out.

Kraut, a professor of management at Baruch College in New York City, will be talking about his research on executive selection at a leadership consortium Oct. 29-30 at the Westin Hotel in St. Louis. The consortium is being sponsored by the Society for Industrial and Organizational Psychology, whose members bring science to a wide range of workplace issues.

For the past 25 years, Kraut has been studying the career paths of middle management executives at a Fortune 100 firm. Based upon peer nominations from managers in an executive training program, of those identified in the top 30 percent of their group as having high executive potential, 14 percent rose to become corporate officers, compared to just 2 percent from the bottom 70 percent. “In others words, people ranked in the top 30 percent are seven times more likely to advance to top corporate offices,” he says.

Kraut acknowledges that peer nominations are not the only method that should be employed in choosing top executives, but “they (peer nominations) have proved to be a valid method of identifying who among the current group of managerial employees has the greatest potential and best chance of advancing to top levels within the organization.”

While there are other types of peer evaluations, he maintains that peer nominations are the most effective and easiest to perform. With that method, peers simply name which of their colleagues they think are the best.

Rating and ranking systems are complicated and often require colleagues to rate each other negatively. “You get the same results with peer nominations, so why bother with rankings and ratings,” Kraut says.

One criticism he has heard about peer nominations is that they are popularity contests. He concedes that some aspects of that charge are true. “However,” he says, “different people have different friends and my research shows that friendship biases tend to balance out.”

“But, since when is being popular a bad thing,” he asks? “Popularity in today’s corporate team-centered environments is important. Teams want to work with someone they like. It certainly is better than the alternative.”

His advice to executives making promotion decisions: ask their management teams for their thoughts on who would be the best men or women for top jobs. It’s simple, it’s effective and there is a lot of research that show peer nominations are a valid predictor of who is likely to rise to the top.

He will be one of several speakers analyzing a variety of aspects of leadership at the “Leadership at the Top” consortium Oct. 28-29 at the Westin Hotel in St. Louis. To see more about the conference, including the speakers and their topics, go to http://www.siop.org and click on the fall consortium homepage.

The Society for Industrial and Organizational Psychology (SIOP) is an international group of 6,000 industrial-organizational psychologists whose members study and apply scientific principles concerning people in the workplace. For more information about SIOP, including Media Resources, which lists nearly 2,000 experts in more than 100 topic areas, visit http://www.siop.org