Raikkonen facing Ferrari sack
"If you're the highest paid you have to be the best and he's not doing the job, simple as that," the Ulsterman, who was Michael Schumacher's teammate between 1996 and 1999, told Virgin Media.
In his season as reigning champion, Raikkonen had a lackluster 2008, failing to win a race after April's Spanish grand prix and finishing 22 points behind his Brazilian teammate Felipe Massa.
It is believed Massa, just one point shy of winning the 2008 drivers' championship, earns only one third of Raikkonen's Ferrari retainer.
Both drivers have contracts to the end of 2010.
Irvine said of Raikkonen, 29: "If he doesn't beat Massa next year I'd be sacking him or reducing his wages massively.
"In sport if you perform you get paid and if you don't perform you're out."