I think the point is that if you fire 1 as an example, the other 4 will improve. So pick the worst and lose him. If you do indeed need to fire all 5, then do it at once and pay the remaining people more.
I'd be surprised if the problem is that more than 50% of your programmers need to be fired . Maybe 1 or 2 and better managament for the rest. I don't think you need a manager for 8 people, but you probably do need to do a little better yourself at managing. If you are the leader/owner of the company, and it has 8 employees, then you are the manager whether you want to be or not.
I'd be surprised if the problem is that more than 50% of your programmers need to be fired . Maybe 1 or 2 and better managament for the rest. I don't think you need a manager for 8 people, but you probably do need to do a little better yourself at managing. If you are the leader/owner of the company, and it has 8 employees, then you are the manager whether you want to be or not.