It sounds as if this system is fairly straightforward and adopted from western business. The best example of this was General Electric under Jack Welch, who adopted a system where the bottom percentage of performers in the company each year were asked to leave.

Basically, you can't manage what you can’t measure. And employees need feedback on their performance in order to perform at high levels. There is nothing wrong with holding employees accountable to a performance system, which can be made even more productive by having performance goals they can work toward, with some kind of bonus system in place to reward achievement.

All the best.
Brad Sugars