Earlier quoted context omitted.
The reality is that most people are paid for their time, not for their output. I think most contracts for salaried employees are along the lines of "work n hours a week". If you want to get paid for output, you can't be a salaried employee.
I don't think this is the reality. It is part of it, but people get paid different salaries, why? Some are more productive than others. Aside from leadership's (and society's) biased ability to determine value, these people theoretically get more because they contribute more.
Productivity might get you a 5k raise more over your colleague on a 160k salary. Meanwhile the same engineer in Taiwan is more productive than you and getting paid 40k while working for the same company on the same product, and putting in more hours to boot.