What you describe sounds like the old Soviet method of manufacturing, in which the goal was not to produce anything of quality, or even functional items. The goal was to produce a quota.
So, for example, a washing machine factory might have a quota to produce 200 washing machines per month. Maybe they had parts for only 100 machines. They would make those 100, and then go on to make another 100 that simply did not have whatever parts were missing. So they might not have agitator shafts, or motor belts, or tubs, or whatever. But that didn’t matter—as long as the factory met its quota.
And I’m sure all the workers were paid exactly the same.
That’s the problem with divorcing productivity from wages and using measures of productivity that are equally divorced from real-world considerations. Unions and leftists want to view the employer as a vehicle for keeping workers employed, regardless of outcome, and the outcome in those situations shows it.
It's really about viewing things as a system where maximizing a single part of the system might inadvertently sub-optimize the whole system. When viewed like that, then productivity itself becomes a team output rather than an individual output.
Compensation, therefore, has to reflect both the individual and system components. That might mean that the individual is rewarded for quality work (as well as seniority uplifts, etc.), and then everyone gets a bonus (pay-at-risk) if the system produces. This way, you avoid pockets of over-producers competing against each other at a cost to the enterprise, and yet reward everyone for exceeding quotas and quality standards.
If slackers under-perform, the system will under-perform and everyone loses the bonus. The team will self-motivate to keep overall performance of the system in balance.
-PJ