The philosopher Michel Foucault actually cites the Panopticon alongside school, military, papal, and other work power structures as being efficient in human discipline.
It arguably worked well for prison power structure too with regards to rehabilitation, until gang infiltration in the late 1960's changed the power status quo.
>Is the idea to figure out who's not working and then Eliminate Them?
Not at all - Foucault looked at discipline in the sense of humans being molded to become skilled and efficient at work - observing everything from monks to boarding schools in an effort to analyze power structures for discipline.
With panopticon, the power model is the all seeing eye, which is necessary to scale to so many prison inmates. With the open office structure, the power structure is more with your work peers, which is more similar to the group/tribal type of power structure.
