The dead sea effect reminds me of something I've seen firsthand at a few startups, and I'm hoping that somebody here can let me know if it has a name because I'd love to read up about it more.
The phenomenon of interest works something like this:
- A small startup doesn't have the means/clout to hire top talent at every position, so the make-do with some early employees that are poor-to-average performers. - Like the dead-sea effect, those poor-to-average performers will cling to the company because the don't have other options. - If the company starts to grow, two things happen: a) those early employees can use their seniority to move into leadership positions and b) the company starts attracting higher quality new hires. Resulting in departments with lots of talented new hires at the bottom of the org chart and poor-performing (but long-tenured) employees firmly entrenched at the top.
The result is that if a startup undergoes rapid growth/expansion, you can have a situation where employee seniority is inversely related with their performance.
There's also the "A's hire A's, B's hire C's" -- mediocre managers tend to avoid putting potential competitors underneath them. This was observed by Cyril Northcote Parkinson in the 1950s, and arguably goes back much, much further in time. The "A's hire A's..." variant seems to trace to Hire the Best-- and Avoid the Rest, by Michael W. Mercer (~1993) (using Google Books search).
And if the best talent is consistently leaving when it realises that 1) it's being undercompensated 2) advancement and skills development opportunities are limited where it is and 3) both opportunities are greater elsewhere, then yes, you'll see short-lived new hires who may outperform longstanding employees (who lack those mobility options).
Factors such as restricted work visas or other exigent circumstances may give rise to specific employees who lack that mobility, and may also be more talented, but that's statistically rarer and less reliable. The fact still likely explains to some extent why such tools exist.
That said, I'm not aware of any specific widely-recognised name for the situation you describe. There's a considerable literature on talent retention which may turn that up, though much of that literature itself ... reflects limited talent. For numerous reasons. Looking for academic / sociology / organisational behaviour citations might be more useful than a general/trade search.