It's more typical to fire the bottom 10% but that's derisively called rank and yank. Microsoft, HP and others have allegedly used it at one time or another. The assumption is if you do your job well you'll rank well. The reality is your job becomes ensuring you rank well, which may not 100% align with doing the job you were hired for well.
It also neglects that you'll always have a bottom 10%, even if those people are absolutely amazing: hire 10 Harvard PhDs and one of them will be at the bottom.
Yeah defenders of the institution hand wave and say well once you get enough people in the mix, the math works out. I'm skeptical when you're asked to force rank people into a bell curve no matter how small the population. People who are on the bottom due to forcing it into a curve tend to stay there or near there.
Your bottom-most Harvard PhD is unlikely to find himself in the top 10% when mixed into a general population because other human factors come into play, not the least of which is it's incredibly time consuming to review and re-rank every person. So managers tend to leave people where they landed because fatigue eventually sets in.
This in turn inspires other behaviors that are not really what the designer envisioned. For example one manager used to carry around a book of every mistake other teams made: if anyone challenged the ranking of one of his employees he'd start firing off potshots at the other manager's org. Needless to say his rankings were left alone. The irony is not lost on me that this manager eventually left to start a company that allegedly uses AI somehow to help people identify the best candidates. He spent his days subverting a system meant to measure employee performance and now claims expertise in finding the best performing employees.
If the ranking system is accurate (that's a huge "if"), then it doesn't really matter what the bottom x% look like on paper.
The question is whether it's ever possible to devise an accurate measure of value quantitatively. Even if your job is press the red button, a person with low numbers might be such an inspiration to the team that everyone else works 15% faster, more than making up for their shortcoming. And you can't possibly anticipate all such factors in advance.
And even if the evaluations are perfectly accurate and retained staff are equally or more motivated, it's still quite possible that interviews, training and slow productivity ramp up for replacements results in more of a productivity hit than retaining relatively unproductive staff.
> If the ranking system is accurate (that's a huge "if"), then it doesn't really matter what the bottom x% look like on paper.
Unless every employee does the exact same work your ranking system will never be accurate. The difference in the difficulty of jobs will dominate the difference in competence.
It also means that if you're doing a bad job of supporting certain groups of employees, they'll get laid off instead of fixing the problem. You'll winnow out anyone who disagrees with you along with the people who just aren't good at their jobs.
