I think it's slightly different in that it would only apply to the top 10% of the org chart. A first-level manager passed over for promotion wouldn't be dismissed; only VP or C-level executives would, and they would be regardless of whether they were recently promoted. (In fact, because the positions are periodically vacated, they are guaranteed to have been recently promoted.)

It's much closer to term limits and the elected-office/civil-servant split in a democratic government. That has its own set of problems, but is generally fairly good at discouraging empire-building. It also differs in that civil servants generally can't transition to being elected officials (despite their qualifications, they face a lot of obstacles to winning elections), while here executives would generally be drawn from the ranks of ordinary management, keeping the ranks under them dynamic.

> the US military follows something like that practice. It's called "up or out"

During my time as a DoD contractor, I saw this happen.

One particular case was a mid-range officer [I'm never good with ranks so don't bother asking] who was up for promotion; it was an open secret that if he didn't get it he'd retire into civilian [and presumably commercial//industry] life. He didn't get the promotion, retired from military, and was duly replaced.