This article suggests that firing poor-performing employees may improve work quality.

“A study publishing in the latest issue of Personnel Psychology finds that forced distribution ratings systems (FDRS), where a predetermined percentage of low-performing employees is fired every year, can be an effective way to improve a company's workforce.”

I’m amazed anyone could get funding for this research. So un-PC.

(This was a computer simulation and the short review doesn’t say whether they validated their model by matching model predictions to historical performance of real organizations.)

Employment regulations that prevent firing non-performing employees might significantly hurt a firm’s long-term competitiveness. (Or, in the case of Germany, a nation’s competitiveness.) Anti-discrimination laws whether for race, gender, or age could have large costs.