Hourly pay makes sense for disposable employees. You are likely asking for trouble when applying it in a startup. A case study from Charlie Munger: One of my

Hourly pay makes sense for disposable employees. You are likely asking for trouble when applying it in a startup. A case study from Charlie Munger: One of my favorite cases about the power of incentives is the Federal Express case. The heart and soul of the integrity of the system is that all the packages have to be shifted rapidly in o­ne central location each night. And the system has no integrity if the whole shift can't be done fast. And Federal Express had o­ne hell of a time getting the thing to work. And they tried moral suasion, they tried everything in the world, and finally somebody got the happy thought that they were paying the night shift by the hour, and that maybe if they paid them by the shift, the system would work better. And lo and behold, that solution worked .