* Because performance vary with time (personal issues, motivation, etc.) so today's low performer may be tomorrow high performer
* Because your metrics might not be good enough to actually discriminate low performers from high performers
* Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)
And probably other reasons.
So I have no problem with:
* Letting go people because the company has to reduce man count, and choices have to be made
* Letting go people because their behaviour is hurting the company
However I'm dubious about the idea that you should keep churning employees perceived as "low performers" to hire new ones who may or may not later reveal to be better.
Yep, the problem isn't deciding to keep low performers; it's that it's extremely difficult to identify them or separate them out from the performance of the system surrounding them.
This is basic Deming management wisdom: most of the overall performance of your company comes from the system and environment surrounding individuals, including the individuals themselves. Optimize the whole, not the parts; focusing on individual performance is just a distraction that drives overall performance down the drain.
> * Because your metrics might not be good enough to actually discriminate low performers from high performers
I think this is very true. For many complex roles you land-up with all sorts of indirection to create 'metrics' which are often some input with a lot of opinion. I've seen lots of situations where you look through performance review data to see employee ratings bouncing all over the place as they (or whole teams) shift from manager to manager. That's not to imply that managers are negligent, it's just that in many roles it's perfectly possible to have a different view of performance (and everything else).
> * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)
See stack ranking!
The other issue is that an organisation can develop a reputation for being too fast to pull the trigger which can impact retaining talent and hiring new people. Given that metrics aren't clear, every 'low performer' situation involves friends and colleagues who don't think that the individual was a low performer. Plus the person leaving is unlikely to be positive about the organisation whatever the compensation is.
That may be fine from a management philosophy perspective, some people think it's good as "only poor or average performers will worry".
If someone is always a low performer that makes sense, but the Netflix question is what do you do with people who have been good performers but aren't at the moment. Netflix philosophy is that you cut those people ruthlessly.
Here are some problems with that: A lack of loyalty to your employees can have a corrosive effect on morale. Employees can end up having very short term goals, or manage their careers in ways that they try to keep themselves in advantageous positions rather than the ones that serve the company. Why should a star take on a risky project, if failure results in termination? Firing can also be a lazy way to deal with a variety of management problems.
