It would be an interesting experiment. Has it been done before? That could lead to some unpleasant things:

    * A lot of unavoidable angst as people of less worth to the business are proven to be paid less in no uncertain terms.
    * More internal strife as people jockey for identifiable rank within the organization based upon their salaries.  "Why is Sue paid $10k more than I am?  Sue wasn't at her desk all week last week while I was here busting my butt."
    * Eventually, many managers and organizations would just sidestep the battle by paying everyone the same thing based upon easy-to-identify metrics like seniority.  As a result, the people with more value to the business will find jobs at companies that pay them according to a better measure of their bottom-line worth.  With no one left but the lowest-common-denominator employees, the company flounders and fails.