|In reality, the theory behind this behavior is not all that important. When a manager keeps the slugs and terminates all but a fraction of the sluggers, it is just a matter of time before the whole department slips to the lowest common denominator. |
With this type of management, the message to the rest of the team is clear: do a mediocre job or you will be on the exit ramp. This practice also causes the employee to view the company as being unfair, inconsistent, irrational, and rather mean-spirited. This does not exactly generate loyalty and commitment. But, it might generate some legal claims, such as for wrongful termination.
The most successful managers try to retain the best employees. Doing so makes the department more successful and makes the manager more promotable, since there are employees who are capable of moving up. Managers who terminate the better employees are either incredibly incompetent or incredibly political. And, in either case, they can create an incredible mess.