Peer assessments outperformed psychologists at predicting which officers would survive combat.
Around 1930, the German military psychologist Johann Baptist Rieffert developed a selection methodology for officer candidates in the Reichswehr.1 His system gathered evaluations from superiors, peers, and subordinates simultaneously, an arrangement that had no precedent in personnel assessment. The process included a leaderless group discussion called the Rundgespräch, in which candidates were observed by officers, psychiatrists, and psychologists at the same time.
What emerged from the data surprised the evaluators. Peer assessments predicted battlefield performance more accurately than intelligence tests, personality inventories, or interviews conducted by trained psychiatrists.2 The people who knew a candidate from shared daily experience turned out to be better judges of future conduct than any credentialed expert.
The first documented business application came in the 1950s at the Esso Research and Engineering Company, a predecessor of ExxonMobil. Esso launched a program called "rate your supervisor," which asked subordinates to evaluate the strengths and weaknesses of their managers' leadership.3 The concept spread slowly through the corporate world during the 1960s and 1970s, with Bank of America, Disney, and Bell Labs running early experiments.
General Electric accelerated adoption in the 1980s, when CEO Jack Welch used multi-rater feedback as part of his performance management system.4 By the early 2000s, an estimated ninety percent of Fortune 500 companies were using some form of 360-degree feedback.5
In 2015, a RAND Corporation study commissioned by the U.S. Department of Defense concluded that 360-degree assessments should not be incorporated into the military's formal officer evaluation system, citing concerns about validity, cultural resistance, and the risk of popularity contests undermining military decision-making.6 The tool that began as a way to predict who would survive combat had become, in many organizations, a mechanism whose primary value lay in development rather than judgment.