Rationale
The effect of choice of what pages to be kept in main memory (as distinct from being paged out to auxiliary storage) is important: if too many pages of a process are kept in main memory, then fewer other processes can be ready at any one time. If too few pages of a process are kept in main memory, then the page fault frequency is greatly increased and the number of active (non-suspended) processes currently executing in the system approaches zero.
The working set model states that a process can be in RAM if and only if all of the pages that it is currently using (often approximated by the most recently used pages) can be in RAM. The model is an all or nothing model, meaning if the pages it needs to use increases, and there is no room in RAM, the process is swapped out of memory to free the memory for other processes to use.
Often a heavily loaded computer has so many processes queued up that, if all the processes were allowed to run for one scheduling time slice, they would refer to more pages than there is RAM, causing the computer to "thrash".
By swapping some processes from memory, the result is that processes -- even processes that were temporarily removed from memory -- finish much sooner than they would if the computer attempted to run them all at once. The processes also finish much sooner than they would if the computer only ran one process at a time to completion, since it allows other processes to run and make progress during times that one process is waiting on the hard drive or some other global resource.
In other words, the working set strategy prevents thrashing while keeping the degree of multiprogramming as high as possible. Thus it optimizes CPU utilization and throughput.
Read more about this topic: Working Set