You can on paper have a centrally planned economy where people are paid according to the value they create, but not in practice. The trouble is that bureaucratic proxies are used to determine value, and people inevitably game those proxies.
There is some use of proxies (with the inevitable attendant gaming), but in profit oriented companies it remains largely at the discretion of the manager(s).
Unless you are directly working for the owner of the company your manager is just a bureaucratic proxy for the Owner/CEO/Board/Shareholders.
Managers also generally only have limited control over your salary. If your engineering manager thinks you as a developer contributed more than a VP because of your innovation he would not be able to write you a check for $200,000 as a bonus to reward you for your value creation.
My point is the manager is not a bureaucratic rule. Rules can and inevitably are gamed. Managers know who is producing and who isn't - heck, everyone in the office knows who the performers and slackers are. It's really hard to game that.
Managers can't authorize a check for $200,000, but they can go to bat for you with top management, who can. It would be a mistake to assume this doesn't happen.
