Good question, Traveller2...I've had similar questions so I'm glad you asked it out loud!

In my relatively modest experience, it almost seems to be also correlated with the "toughness" of the fight a unit experiences...not just the experience level of the opponent, as overweightninja suggests, but the intensity of that encounter. So a unit on guard mode that slugs it out tooth and nail with a couple of enemy units (even if they have the same or lower experience) and holds its own throughout the fight seems to be much more likely to gain that elusive chevron. But I may be over-interpreting here...developers?