It puts a number on the wrong things.
If you could perfectly and holistically quantify someone's performance, then there's nothing wrong with this. But you can't, so you not only fail to appropriately compensate everyone, but you additionally start encouraging the wrong motivators.
Amazon.com: Punished By Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes (0046442001816): Alfie Kohn: Books