I really like the idea of tying tracked productivity to payroll, however in states I have checked with the Labor Boards in ... UNLESS the "employee" is "not an employee" at all but a legally licensed sub-contractor - it is illegal to do so.
Re: Marvelous mashups.
Unfortunately, most locales do not allow you to "punish" an employee for "not performing to your requirements" by withholding their remuneration, all you can do is terminate them with due procedure. Sub-contractors however CAN very easily be held accountable in this way, but be careful that they meet the Federal Guidelines for being an 'official' sub-contractors before instituting this manner of payment. This is the same reason, with a few notable exceptions, why hiring an employee on a 'piece work' basis is almost non-existent in today's manufacturing and production arenas.
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Payroll comment
I almost made the last paragraph say "make employees who didn't track their hours accurately come get their paycheck from the boss's hand and give an explanation" but thought the "no money for no work" idea was stronger. Plus, so many people use direct deposit that paycheck example might not carry much weight any more.
Thanks for your note.