Many companies have a policy of stack-ranking people and tossing out the bottom percentage (ten percent, five percent, whatever) every year.
Sometimes it's clear who to get rid of. Sometimes managers are forced to throw perfectly decent workers under the bus in order to protect other workers. It sucks.
I saw that first hand, and the moral boost for the 20% that get higher than average raises -almost- offsets the fear of being in the 10% that get put on mandatory performance plan. it can be a game where you take one for the team, get on the 10% performance plan and get off it before the next review cycle. if you get put on twice in a row you are out, so at times you can game the system by trading who goes into the 10% bucket.
Sometimes it's clear who to get rid of. Sometimes managers are forced to throw perfectly decent workers under the bus in order to protect other workers. It sucks.