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passive_fist comments on Open Thread, Jun. 1 - Jun. 7, 2015 - Less Wrong Discussion
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That's a risky game. It makes the company culture less enjoyable. That makes hiring harder and can motivate people to quit. Musk can afford this because of the strength of the vision of his company, that makes people to work there but it's still not clear that it's optimal.
It is a risky game but there are many factors to consider. I used to work for someone who was quite similar in that they would go completely off the rails if someone underperformed (I never got yelled at, thankfully). I actually never observed resentment or quitting due to this behavior (at least, it was never the quoted reason). However, I did observe that when mistakes happened, people tended to try to hide it much harder. There also grew a culture where people would hide the mistakes of their coworkers even if the mistakes were quite serious. All in all, I don't think productivity was much higher than other workplaces I'd been in.
My story is anecdotal of course and I'd love to see actual statistics comparing 'high pressure' workplaces with those that are more lenient.