There are a various underlying assumptions here which aren't necessarily true. First, it's hard to measure candidate and employee quality on one single scale,

There are a various underlying assumptions here which aren't necessarily true. First, it's hard to measure candidate and employee quality on one single scale, with a standard deviation of only 15%. Second, people you hire aren't always going to perform at the level of performance you estimated, independent of the project you put them on. Third, your candidate pool won't always contain people who are smarter than the mean. I'm sure Google is now attracting the best and the brightest, but will the same be true 5 years from now?