(UK at least...) You couldn't just point blank fire the bottom x% each year based on their ranking, you'd need to give the bottom x% warnings and put them on a

(UK at least...) You couldn't just point blank fire the bottom x% each year based on their ranking, you'd need to give the bottom x% warnings and put them on an improvement plan (so they have a chance to improve) and then, for those that don't, you can sack them. Even then it may be tricky if you are cutting too deeply. Taking it to the extreme you couldn't use this method to fire the bottom 99% of employees as a tribunal would take that as constructive dismissal. Firing the bottom 5%, after appropriate warnings/etc, is in the realms of possibility as there's a good chance that the employer can provide documentary proof that the employees fired were performing below expectations should a disgruntled employee take them to tribunal (which, sadly, now costs the dismissed employee £250 to file the claim and £950 if it goes to a hearing.)