A number of years ago, I wasn't as passionate about my job as I currently am, so I know that for someone to develop the necessary degree of passion, enthusiasm, and work ethic to perform really well, it can be a long journey.
For that reason, I tend to have the attitude that it's too frustrating and not worthwhile to try to manage the performance of someone non-junior who (for example) regularly isn't even working for the full work day, or shows a clear lack of focus or care. I've recently worked mainly in startup and disruptive businesses, which tend to have a less forgiving culture and expectation of high level of engagement.
The 'soft' approach to dealing with underperformance is well described in the following articles, and whilst this type of approach sounds attractive (and in the past I would be in favour of this), I know that in my own case, underperforming was really a sign that I simply wasn't excited or hard working enough and needed to move on or really address my underlying attitude over an extended period of time.
Imagine if a company simply lets go of some employees who aren't really performing well enough, without attempting to genuinely manage performance. It can create some disruption and leave skill gaps and some short term struggle, but it can also put an end to a business tolerating underperformance and bringing other team members down. What can be other trade-offs between a 'non performance management' versus a 'supportive performance management' approach. I'd be very interested in any objective empirical evidence to suggest the pros/cons each approach.