> what do you expect? ballmer got his MBA at harvard at the same time the current GE CEO was there. and that's where the ranking system was born, at GE
What you are referring to is the Jack Welch approach. Its a strategy that was developed to eliminate excess employees. It works. Its biggest pro is that once implemented it shows the main result of excess employee elimination in a short period of time. It has two major flaws one that appears in the short term and one that appears in the long term if you continue to the use the strategy. The major flaw in the short term is that you can have a department full of amazing employees but you're forced to eliminate someone, this is probably something most companies are willing to accept when deploying the strategy. The other major flaw which Microsoft is now seeing is what happens when you keep this strategy around for too long. It creates a hostile environment where no one wants to help each other. No department wants to see the other succeed nor do they want to see their co-workers succeed because you're in constant competition for your own job.
Its a strategy that can work and it did for General Electric, but Jack Welch had other strategies he mixed with this strategy that made it work with GE.