That is a failure in leadership, not the system. Also, I assume you were compensated at a better rate as well and received bigger raises.
You nailed it. No one says in these programs that everyone is compensated equally. If you produce more than your coworkers, you should be paid accordingly. Is that rewarding people for overworking? You could look at it that way, but that's capitalism. On the other hand, this model lets employees find their balance instead of the company trying to mandate it.