I absolutely do NOT think it is a good practice. I think it is what lazy companies full of people afraid to lose their jobs do. I think it's most companies.
The reality is that fear is a greater motivator than any other emotion - over anger, sorrow, happiness. So companies create cultures of fear which results in productivity (at least a baseline, 'do what I need to do or not get fired' productivity), but little innovation and often at the expense of growth.
Plus, it's just hell. You want to do great things, but know you are stepping into the abyss every time you try.