Well, if your hiring system is perfect (and your talent management, and your leadership, and your product, and luck is on your side) you could have a giant spik

Well, if your hiring system is perfect (and your talent management, and your leadership, and your product, and luck is on your side) you could have a giant spike on the right: all perfect people. That's not realistic, so there's some sort of distribution. It's probably at least somewhat bell-shaped. Even when the average is very high, and your worst performer is still "pretty good", they're still bringing down the quality of your staff. If your process is that good, you could replace that person and go from good to great. This is all hyperbole: this only applies to large populations, this assumes you can normalize (hard), and this assumes no one is lagging (never true).