[jerguismi]

"I'm thinking pay should be based on productivity and value to the company instead of value to me."

Value produced is the upper cap of the pay, the lower cap is dictated by how much competition there is on the market. The employer can look at it like buying any other kind of service. If you work remotely, you compete with all the freelancers/contractors around the world. If the company values local employees, and you can work locally at the office, there is much less competition for that kind of position.