If you are constantly putting out more and better quality work than the average, the reward is you ask for more pay or you switch to a higher paying job.
I don't see why that's a problem, provided there's not a lot of constant sandbagging when giving estimates.
Hours based work isn’t perfect but it means you can put in the average amount of effort and have consistent work hours without stressing over every task and if the estimate is perfectly accurate.
This essentially leads to the same result as when estimates are actually estimates, except that I might feel free to overestimate my capabilities a little, but I'd never want to overcommit at all. In other words, if you just let me estimate instead of commit, you're likely to get more work out of me most of the time.