First, a disclosure.  You should know that I have a deeply personal vendetta against the hourly wage. Before meeting my (hourly-compensated) husband three years ago, there was nothing I loved more in this world  than irresponsible shopping. But my pathological relationship with Macy’s was abruptly cut short thanks to my husband’s hourly pay structure, which put our dollars in terms I could finally understand: time. Now when I go to the mall, I (tragically) see minutes instead of pennies. A nice meal out = an hour to sleep in. A great pair of jeans = an afternoon off. An iPad = a week of vacation. It’s a terrible way to live. So now I’m fighting back. Take this, hourly wage!

5 Reasons to Stop Paying Your Employees Hourly

1. It Sets Low Expectations

The hourly wage was most popular in the industrial age, when jobs were repetitive and mechanical. Almost anyone could do a factory job–children included. People were not paid or appreciated for their ideas, leadership, charisma, or strategic thinking. They were paid for their willingness to do mind-numbing work for long periods of time.

Unfortunately, this compensation model has stuck with us even though so much more is demanded of the average worker in today’s economy.  All employees, no matter their position or authority, are expected to show initiative, problem-solving ability, and customer-service orientation. So why do we pay them as if their only contribution is time in a seat?

2. It Suggests the Job is Boring

Otherwise, you wouldn’t need to pay a person for every minute they spent doing it.

Researchers from the University of Toronto and Stanford have concluded for salaried workers, happiness is not correlated with income.  This is because salaried workers are free to engage creatively with their work. They are encouraged to push the boundaries of their job description to create new value for their employer. Because they are creatively engaged, you don’t have to bribe them to stay in the office between 8 and 5.

The happiness of hourly workers, on the other hand, is highly correlated to income. When it comes to creative engagement, hourly workers are actually forbidden to work outside the parameters of their shift. That means no time working on side projects or innovations, and no time thinking of ways to improve processes or procedures. Clock in, do your job, clock out.

3. It Breeds a Lack of Trust

An hourly compensation model necessitates killer record keeping…ask any HR professional. Unfortunately, keeping meticulous track of 5-minute breaks and 30-minute lunches can lead mutual resentment. If you track 2-minute tardies with military precision, expect your hourly employees to balk if you ask them work through a busy lunch period. Since hourly employees are particularly sensitive to matters of income, you’ll also need to make sure that you’re paying your employees something reasonably close to what they think their time is worth. Otherwise, studies show, they’ll punish you for skimping.

4. It Can Destroy Corporate Culture

Positive corporate values are easier to define and apply in a salaried environment. When employees are given the time, flexibility, and trust needed to excel in their jobs, three things happen:

• turnover decreases
• engagement increases
• sensitive issues like compensation are addressed in a structured and respectful way–not haggled over whenever a time card is due.