having a salary that moves up and down based on performance will lead to pressures on the pilot ie. push the limits to get from A to B, squeeze those last heavy bags on....that sort of thing. This in turn WILL bite someone or the organisation at some point in time and probably to the detriment of the cargo/pax!! and thats not good for business!!
The 'crap' pilots (as you have put it) should be able to be weeded out from their applications and interviews.
Job descriptions with contracts can quite clearly spell out what is required and expected. If the organisation has high expectations - then that is what should go down on the job description as the minimum expectation.
As far as standards go, thats why the regulatory outfits insist on regular flight tests.