I can see how it would be a good way to rid the company of dead wood, but depending on the employees are grouped, it can work very poorly. When it was first implemented in an organization I used to work for, group A already had almost all dead wood (when compared with the overall company) and group B had almost all stellar employees (when compared with the overall company). Some of group A will ended up "at or above the curve" for their group, while some of group B ended up "below the curve" for their. So some of group B got bonuses while some in group A ended up on "performance improvement plans". Poor implementation? I assume so. But it was painful and infuriating to watch. I was in group A and did not end up on a performance improvement plan, thankfully. But my blood still boiled - for myself AND my co-workers.