Earlier quoted context omitted.
Not all people add value to an organization, and they might stop adding value too. Unfortunately, it's not possible to know this for sure prior to hiring, so the only realistic way to maintain the organization is with constant pruning.
I think this is a bit of a fallacy. You don't have to always be firing some percentage of your workforce. While hiring the best is not easy and you may need to let people go you also shouldn't just constantly be on the hunt for the next head to chop. I have seen the effects of stack ranking and it's not pretty.
The process of evaluating the people that make up the organization should be under constant improvement though, and again, simply because of dealing with large numbers, there might be a few false positives, but on the whole as an organization, management should be on the lookout for who isn't performing.