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And with it, you run out of poor performers and have to start firing good ones. There may be a constant influx of new people which makes the number of poor performers non-zero, but "non-zero" isn't "enough to satisfy the stack ranking percentage".
This only happens in two failure states. The first is that you stop hiring anyone, in which case your organization is probably in pretty serious decline, and the second is that your HR is so good that you only hire the best of the best, and you hire them perfectly such that all of them are a great fit. In this case, your organization is likely to be so successful, and its expansion so rapid, that there’s enough room to promote everyone good and to hire tons more people, at which point stack ranking will make sense again.
Isn't the other failure state some version of 'your metric of rating high performers is flawed/becomes gamed' at which point you become Enron in which anybody who isn't committing fraud upon fraud upon fraud is fucked.
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That's not necessary. If you fire the X percent lowest performers, and you hire replacements, only X percent of the replacements, on the average, will be as bad as the X percent of the original company that you just fired. But you still have to fire X percent of the whole workforce next year--not fire X percent of the replacements (a much smaller number), so you have to fire good people.
That doesn't require that HR be good at all.
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