Under Jack Welch, GE had a policy to promote and reward the…

Under Jack Welch, GE had a policy to promote and reward the top 20% of its workers, to retain, encourage, and train the next 70%, and to terminate the bottom 10%. Similarly, Netflix tries to pay its employees at the “top of the market” (i.e., the most they could earn if they worked for another firm), but it often fires employees that it would not rehire if given the chance. There are several potential advantages to these policies. Which of the following is NOT true about these advantages?