Aims of Panda or Content-Farm Algo Update are noble: to remove poor quality sites from the top of Google’s results pages. According to Matt Cutts "This update is designed to reduce rankings for low quality sites—sites which are low-value add for users, copy content from other websites or sites that are just not very useful. At the same time, it will provide better rankings for high quality sites—sites with original content and information such as research, in-depth reports, thoughtful analysis and so on. Difference b/w Penalty & Algo Change It's important to define the difference between an algo change and a penalty. A penalty must be served if it has a time limit and lifted if it is to be removed. An algo change exists and its results will continue until it is changed, your site changes (or your site gets whitelisted). Panda is an algo change but no ordinary one. It's an algo change that works like a penalty because if your site crosses the Panda Line then the whole site is affected, quality pages too. Panda is penalty by algo. UK Losers after Panda Update You can see here UK losers after panda updates. What should do if hit by a Panda "If you believe you’ve been impacted by this change you should evaluate all the content on your site and do your best to improve the overall quality of the pages on your domain. Removing low quality pages or moving them to a different domain could help your rankings for the higher quality content.†One can take following steps: Find the pages and page types hit worst on your site. Isolate differences between those hit and those not. Test changing those factors on hit pages but use this method of analysis with caution because the pages hit most might not be the pages earning you the penalty. Look at how much of your site (% of pages) is taken up by your lowest quality pages and improve that. If you are scraping or otherwise copying other site’s content, replace it with quality original content or test removing some (or even all) of those pages (and adding 301s from them to relevant pages higher up your site’s hierarchy). If you have a large number of pages with dupe (of your own copy), weak or almost no content, improve them or remove (and 301) them or block them from Google with robots.txt. If you have lots of pages that dupe your own copy (eg, as happens with some content management systems and on a lot of ecommerce sites that build new URLs for ‘faceted’ pages) then add rel=canonical tags to the ‘duped’ pages. This stops Google seeing those pages as dupes. Edit any ‘over-optimized’ pages. Improve anything that might make the user’s experience better. Offer users more when they first enter a page. Eg, images, videos, attractive text and pages linking to your best, related editorial content. Please Give your Suggestion Also...
I want to add one thing that when algo changes then ranking of your website get down and improved when you make changes according to algo. but penalty applied then it is very hard to improve ranking of your website
Well I don't approve in removing pages of your website. It's far better to put a 301 redirect in those pages and make a much better version of that page to land.