The commission is a temporary body, set up to deal with reorganisation appointments.
Mr Peggie told a personnel conference organised by the Convention of Scottish Local Authorities he was surprised the new unitary councils could not be relied on to pursue a sophisticated or professional approach to recruitment.
'I am left with the impression that the exercise of the right of democratically elected members to have a major say in the recruitment of staff must bring with it an overriding responsibility to ensure that all appointments are seen to be made on a fair and unbiased basis applying the highest standards of professional practice,' he said.
Mr Peggie acknowledged potential concerns about interference in the sensitive relationship between members and officers.
The idea of a permanent commission 'does strike at the whole discretion of a local authority to make its own appointments', COSLA secretary general Doug Sinclair said.
'If there is a problem then it is local government which should be putting its own house in order,' he said.
'There may be a role for Cosla to formulate good practice.'