This policy of Welch's undoubtedly helped fuel GE's massive profit growth while he was there, by removing a lot of the dead employee weight. (It's outlined in "

This policy of Welch's undoubtedly helped fuel GE's massive profit growth while he was there, by removing a lot of the dead employee weight. (It's outlined in "Straight from the Gut", which is a decent read, if a little too conversational in tone.). However, I've always thought that there approaches a point where this is counter-productive. You're assuming that you can replace those 10% with workers better than they were. But, after you do this long enough, your bottom 10% are probably at least average, or above average, and it may be a better business decision to keep those on instead of hiring and training unknown candidates. At some point there's got to be reduced returns.