I saw this post by Rajan Batra which beautifully explains what Steve Jobs meant by only hiring A-players. It shows how B-players are willing to tolerate C-players so that they won't get called out for being B-players. If people start calling out lax work ethic then everyone will keep an eye on each other's performance.

It also helps to weed out petty rules because managers will get tired of having to enforce them and will get the rules changed.

This also relates to the Hawthorne effect which states that people’s performance increase if they know they are being observed.

https://en.wikipedia.org/wiki/Hawthorne_effect

 "I found that when you get enough A players together, when you go through the incredible work to find five of these A players, they really like working with each other. Because they’ve never had a chance to do that before. And they don’t want to work with B and C players and so it becomes self-policing and they only want to hire more A players."

http://www.forbes.com/sites/drewhansen/2013/05/11/steve-jobs-lost-interview/

“I’ve learned over the years that, when you have really good people, you don’t have to baby them. By expecting them to do great things, you can get them to do great things. The original Mac team taught me that A-plus players like to work together, and they don’t like it if you tolerate B-grade work.”

http://recruitloop.com/blog/steve-jobs-top-hiring-tip-hire-the-best/

“Tacit approval is given whenever managers fail to speak out about existing conditions. Tacit approval leads everyone to the assumption that existing conditions right or wrong, are acceptable, will be tolerated and be allowed to prevail.

Not only does tacit approval work against improving performance, it makes it unlikely that current standards will continue to be met. For instance when a supervisor doesn’t say anything to an associate about that associate’s missing name tag, what’s going to motivate that associate to wear one in the future? The manager’s silence implies that it is OK to not wear a name tag. Other associates will see this and before long the rule is generally disregarded. Reinstituting the policy at this stage requires a major retraining effort. To avoid this situation, a supervisor must be vocal – not overbearing, and communicate the needed correction. Timely correction of infractions will bring about a general awareness that no backsliding will is acceptable and also serves to remind everyone that the policy will remain firmly established.

All levels of management are susceptible to the paralyzing results of tacit approval, and any condition or issue – minor or vital – will suffer from the neglect through tacit approval.”

https://www.linkedin.com/pulse/tacit-approval-rajan-batra-cmhs