You're right about the salaries. However, incentives don't work and are more likely to cause problems over the long term by repressing intrinsic motivation in favor of extrinsic motivation. Among other things, this promotes the easiest path to obtaining a goal rather than the best path, promotes competitiveness over teamwork, and effectively promotes cheating.
As my math prof used to say, "The best way to encourage cheating on a test is as follows: start with a very large class. Announce that there is a test today and it will be graded on a curve. Pass out the test. Say you will be back in 30 minutes to collect the test and leave the room."
(I'm now thinking he was a prophet predicting the current financial mess.) An excellent book on this subject is Punished by Rewards .
And, just yesterday, a doctor I know said he finally decided to retire (well past normal retirement age), not because his skills weren't up to par, but because the pressure of being right 100% of the time was too draining -- it's something that is impossible to do, but when you aren't, a person dies. That's what I want in a doctor, someone who cares... and that's not something you can build through incentives.