What mechanism assigns value for anothers work? It is supposed in Marx's writings that the laborer assigns the value by decree. They "say" it is worth so much and as such when divided into the remuneration for their work the "bourgeoisie" "takes" a larger share. Value is in essence dynamic. This is the fundamental flaw in his work.
Water is essential for life right?
If I expend massive amounts of labor to provide water for others, I should get equal compensation.
If someone expends less work they should get less compensation if the commodity, water, is the same?
No, actually they recieve a higher compensation because they made the labor of producing water MORE efficient.
But in Marx's estimation more labor equals a claim to more compensation.
This is why he eventually discards the obvious input output model and develops a somehow not centrally controlled, yet shared, ethos of From each according to his ability, to each according to his needs comes in.

It completely neglects the natural incentive of efficiency driven by competition between compensation given to those who work harder and those who work more efficiently.

You can't just read something and take it as fact, you actually have to compare it to the facts of reality and play out the scenario to its logical conclusion.