In many cases it can actually be inversely proportional to performance, since the one factor they can count in black and white is how much the person costs. Laying off someone making a TC of $500K probably feels like you're saving the company a lot of money, but its also possible the reason they were making that much is because they were more than twice as productive/valuable as the person making $250K. But salary and benefits are easy to quantify, and performance is not.