Hours of labor alone seems a rather poor measure - it doesn't reward innovation or efficiency. Just the opposite.Grown-ups can innovate and become more efficient because it makes rational sense to do so. We don't need to reward innovation and efficiency with the power to exploit others' labor; we can do it with social prestige and other mechanisms.
Remember too, capitalism primarily rewards price-cost "efficiency" (monetary price divided by monetary cost) by paying labor the cost of their labor power, not the value of their labor. This is not a mutually beneficial sense of efficiency.
Even under a socialist hours-of-labor-limited extended economy, though, use-labor efficiency (use-value divided by socially necessary labor time) should improve over time, although perhaps not as quickly. But we already have an advanced industrial economy; we don't need to put most of our resources into improving productivity.
If I can build a shoe in an hour just as good as the average good-shoemaker can make in five hours, it seems unfair to force both of us to work five hours before we earn a shoe we can keep.DBB has it backwards here. Under a socialist economy the better shoemaker would indirectly pressure the poorer shoemaker to become more efficient. Because the better shoemaker can make shoes more efficiently, a socialist economy would force him to undercut the poorer shoemaker's price. Since, however, there's not cutthroat competition under socialism, the government would help the poorer shoemaker become more efficient, and the better shoemaker — who is not permitted to exploit his customers' surplus value — wouldn't have a disincentive to keep his competitors from becoming more efficient.
Fundamentally everything in a socialist economy is paid for according to labor time. The subsistence economy comprises those endeavors where the socially necessary labor time is well-understood, easy to calculate, and not easily reduced. The extended economy comprises all endeavors where the socially necessary labor time is not well defined; prices in the extended economy are capped to compensate the individual actual labor time (which is obviously the upper bound on the socially necessary labor time) but can be reduced through truly free market non-cutthroat competition.