Some companies rank all of their employees, and fire the bottom ~10% every year.

Every company has employee turnover. It's tremendously costly, but allows companies that aren't growing to raise the quality of the team over time, and change the culture with every new replacement hire. It's pretty likely that just paying more to get employee retention has a much better ROI – if the goal is to raise the quality of the workforce. Both firing people and giving existing employees have costs, but if you have a solid margin on each employee, losing their training and experience is usually a larger cost (this insight might be specific to the field I'm in, as that's where all my numbers come from – computer programming).

But if you're already maximizing retention as well as you can, you could lose the opportunity to change culture that natural employee turnover gets you. That's a big shame! In these cases, stack ranking might be useful – but looking at the companies using it, I don't perceive that as being their goal. They aren't paying particularly well at all, or have particularly good work environments.

It's possible I'm a business idiot, and firing people you otherwise wouldn't because you've got so many other good employees makes sense – perhaps the other employees are existence proofs for a more capable job market, which attenuates the risks of firing? But this system seems like it would only be useful to precisely the companies not using it, if it's ever useful to anyone.

The even crazier part is I started with this systems level insight, starting reading about it, and discovered there is essentially no evidence it's useful at all. Now, don't get me wrong, I feel guilty for not reading enough Drucker, I think we all could take the time to learn more. But to invent something specific and costly and not have any notion that it works decades later... indicates you ought to stop.

I don't mean to "yadda yadda yadda" the ethical concerns of stack ranking – it seems quite odious to me, truly – but they've already been discussed and ignored by the leaders at these companies, so new ideas are probably where to invest in persuasion.