[Joeri]

That doesn’t seem very rational. The goal of all managers should be to maximize productivity per dollar spent. Motivated contractors who are well integrated in teams, don’t need to be replaced often, and generally kept happy are far more productive, hence the bottom line of the company benefits by it.

[corty]

It isn't "big picture" rational, but it is rational in a myopic way. Most managers in a company are only responsible for their own little kingdom and will care little about the rest or any overall whole-company picture. Only the highest-ups are responsible, accountable and incentivized to care about the whole.