The reality is reviews are a part of a process, and your rank in them depends in part on the quota set by HR. Most of the time, HR wants employees to fit within a bell curve for rankings. In some extreme examples, people's reviews were based on a predetermined track and not on actual performance.
Netflix's policy is just HR marketing. If all you do is keep your 4 and 5, then what makes those people 4 and 5 will start to become 2 and 3. It's a moving goalpost, and sounds like an effort to increase productivity without increasing compensation.
I may be jaded.
I think GE was well known for doing a similar practice under Jack Welsch and they still had plenty of long-term employees. I don't think the system is particularly desirable though.
https://en.wikipedia.org/wiki/Jim_Pattison
... used to have a policy in effect in his car dealerships that the worst producing salesman would be fired every month.
For instance, this is remarked upon in this National Post article:
http://www.nationalpost.com/story.html?id=fb5f68f1-5946-4b46...
(search for word "salesman"). I think, no conditions were applied. Worst just meant not as many sales or as much revenue as the second worst salesman.