It assumes that you have perfect measurement. Anyone who knows corporate politics, middle management machiavellianism, and inability to properly instrument development, requirements, scheduling knows this is a fantasy.
That means people will devote SUBSTANTIAL amounts of their day-to-day labor in jockeying and positioning.
People will be hired (wasted money and time) explicitly to be fired/PIP'd.
The jockeying will result in disruption of team development.
People will sabotage their coworkers.
Trust disappears.
Paranoia grows.
Blame deflected.
Difficult problems won't be tackled because why risk it.
Bandaids rather than solutions will result.
YOUR BEST PEOPLE WILL LEAVE. Let me emphasize this. You are selecting for people that aren't good, because good people will have OPTIONS and THEY WILL LEAVE.
What are you left with? A management hierarchy of sociopaths. A subpar set of employees that furthermore will not cooperate in good faith (in the best case) or actively engage in institutional sociopathic behavior. You will have a cesspool, and cesspools repulse good people.
And the signal is right in front of people that apply: the hiring process is abusive hazing with the "raise the bar" bullshit.
Staff turnover means abandoned systems. Abandoned systems will be avoided as bad career risk, or reimplemented before the org has gotten good ROI from them.
THAT IS NOT GOOD MANAGEMENT.
Remember: AWS had a CRAP Christmas. Crap. This is starting to boil up.