What’s wrong with hourly pay?

Hourly pay feels simple — clock in, clock out, collect a paycheck. But for most businesses, it creates the exact kind of behavior you’re trying to avoid: slow work, zero ownership, and wasted budget.

Here’s why hourly pay falls apart for performance-based teams — and what to use instead.

The problem with hourly pay

Hourly pay is based on time, not output. That means:

• Workers get paid the same whether they do a great job or a terrible one
• There's no built-in incentive to work quickly or efficiently
• Your top performers earn the same as your slowest crew members
• Labor costs balloon — even when quality doesn't improve
• There's no accountability for going over budget

And once you build that culture into your company, it's hard to undo. You get workers who say “it’s not my problem” — because it literally isn’t. You’re paying them for time, not results.

What hourly pay teaches your team

Here’s what you (accidentally) teach your workers with hourly pay:

• "The longer I take, the more I get paid."
  
• "I don’t need to help my coworkers — I’ll still make the same."
  
• "I can finish early, but I’ll just be sent home and lose money."
  
• "My boss doesn’t notice when I do great work — why bother?"
  

Even good workers start coasting. No urgency. No pride. Just punch in, punch out.

The alternative: performance-based pay (aka Protiv)

Performance-based pay flips the model:

• Crews get paid for work done, not time spent
  
• Budgets are clear up front, so workers know the target
  
• Top performers earn more — without hurting payroll
  
• You control labor costs without micromanaging
  

When people get paid to hit goals (not just show up), the entire team levels up.

Protiv makes it easy to roll out this system by plugging into your time-tracking tool and automatically creating ProPays (bonus opportunities) tied to real work completed. Workers see what they earned. You see your profits go up.