I've experienced this first-hand on more than one occasion when I was a game developer at EA. Production consistently rewarded fire-fighters without realizing they were in fact encouraging arson (though fires were always through incompetence and not intentional gaming of the system as far as I know).

If the people who put out fires consistently get the best rewards, don't be surprised when a lot of things catch on fire.

The challenge is that you want to reward the most skilled people. However, "skill" isn't easily visible to some managers. Instead, they observe that:

    effort = difficulty / skill

They can't measure skill directly, so they note the above and try to solve for it. But that only works if you can measure difficulty. That's no easier to measure than skill. The mistake they make (as in the post here) is that they just assume difficulty is a constant.

If you're going to use effort as a metric for skill, you must have a measure of the intrinsic difficulty of the task. If you can't directly measure your employees' skill or the difficulty of the tasks you've given them, you've got real problems.