What is the reason for an employer to have some employees on hourly and some on salary?
For the employer, what are the advantages and disadvantages of the two?
What is it about a particular position that dictates which one the employer chooses?
In: 2
There are a some great answers on the legal aspects of this. There’s also an incentives aspect.
Some jobs are easily divided into hourly chunks. For these jobs it’s generally the case that if you spend 2 hours on something you’ll get twice as much done as if you spend 1 hour on it. For these jobs it common to pay by the hour because that gives you good alignment between what you get and what you pay.
Some jobs are very hard to divide into hours. That’s often because it can be very difficult to figure out if there has been any progress at all until it’s done. Telling someone to spend an extra hour on it often has very little relationship to how much work gets done. For these jobs it’s easier to just give them an annual salary, assume they’re doing their job well and fire them if it turns out they aren’t.
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