FWIW, I was introduced to this method by others, and have used/been a part of this method at several companies now; and I find that each company where I have seen it employed has had remarkably low turn-over and high team morale. Much lower turn over, and higher morale, than the companies I've been at that have done otherwise. Also anecdotally, the companies that employ this method have been the same companies that seemed most willing to train and aid an under-performing employee, rather than simply let them go.
I think it's because the awareness of the need to ensure performance is baked-in to the process; rather than having an assumption that the hire should have a high level of performance. Employees aren't like other physical assets, like computers and other hardware, they're malleable human beings that are accepting of improvement.
But I don't know of any large studies on the merits of this approach, so perhaps I've simply been lucky to have had positive experiences.
I think it's because the awareness of the need to ensure performance is baked-in to the process; rather than having an assumption that the hire should have a high level of performance. Employees aren't like other physical assets, like computers and other hardware, they're malleable human beings that are accepting of improvement.
But I don't know of any large studies on the merits of this approach, so perhaps I've simply been lucky to have had positive experiences.