Earlier quoted context omitted.
People work at a company for a variety of reasons. Some want or need the money. Some really believe in the company's mission. Some like the people they'll be working with. Some want to develop skills for their next move. Some want the brand name or status. Over time, the company will accrete people of all sorts of different motivations. What a buy-out does is take money out of the equation. It makes it so that everyo…
I don't see how the usual buyout amount would be able to take the money out of the equation. "Low performers" who don't have good chances in the job market surely will stay, since their earning potential is greater than what you reasonably offer them in a buyout. The likelihood that the skilled employees will take the money, knowing they will get another job immediately, is much higher.
Imagine your employee base graphed on two orthogonal dimensions: their performance level, and their motivation for working for you. (In reality, "motivation for working for you" is actually many dimensions, and performance is likely to be somewhat correlated with certain motivations, but this illustrates the point at least.) The buyout offer doesn't affect people who aren't financially motivated, so take them out of the equation, and look only at the folks who are strictly financially rational.
You can loosely group them into high-performers (those who are known achievers, who always have an offer in hand as soon as they make overtures toward searching), mid-performers (those who pretty much amble along, and for whom the job search provokes intense anxiety, because they typically have to put in 3-6 months of full-time searching to find a new position), and low-performers (those who don't do anything and everyone already knows it). In most companies, the distribution of these is roughly 10-80-10. You can fire all the low performers; the point of bucketing them into the "low performer" category is that their underperformance is obvious enough that they leave a documented paper trail that makes this unambiguous. And in a company that's run into financial difficulties, the top 10% has probably already left, because they continually get job offers and when your company is going down the tubes, it's to their advantage to take them. That means that most of your financially-motivated employee base probably fits into the middle range, the folks who are average employees and will have average difficulty finding a new job.
The point of a buy-out is to reduce the anxiety levels surrounding getting that new job to the point where anyone who is unhappy at your company but isn't sure they have enough money or skills to go elsewhere ends up taking the leap.