I taught a class yesterday and, as I typically do, when I got to the topic of peer groups I mentioned one of its disadvantages: questionable makeup of the universe. That is, does the manager belong here?

And, as I typically do, I cited an episode of Seinfeld to make my point: the episode where Kramer is telling Jerry and Elaine about his Karate class, and how he’s the #1 student. What he fails to explain is that the other students are all small children.

This raises the question of the appropriateness of the peer group. Perhaps management assignment to peer groups isn’t always so obvious when in error, but there is often a concern as to the appropriateness of placement. Thus, one of the many shortcomings of peer group benchmarks.