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Why Hourly Wage is Inefficient Way of Working

When I talk about hourly wage, I don’t mean just hourly wage. I mean, everything that is tied to time spent working, that might be a monthly salary as well, with fixed hours.

Please note that these are just my opinions.

What are the disadvantages of hourly wages?

The problem with hourly wages is that it will decrease the efficiency of the work done in some cases. There could be much better alternatives to hourly wage. I think the reason hourly wage is so common is that it is very easy to calculate and track.

Hourly wage lowers efficiency

When the salary you will get is tied to hours spent working directly, there is a direct correlation to motivation, and this way efficiency. If you could paint a house in 10 hours, but you work on an hourly wage, why would you ever try to do your best and finish the same job in 5 hours, even if you could?

Let’s take an example. Entry level job with high demand for workers. There are currently three workers, and they are looking for more. Two of the workers realize, no matter how slow they will do their jobs, they won’t be fired since there is already huge demand for workers.

They will perform at half speed compared to normal. The third worker, on the other hand, will do the work twice as fast as a normal worker should. This is because the supply line would collapse unless someone did the work.

If you happen to be the third guy, you would do four times the work the other two were doing. And the best part is that you would still be paid the exact same, or maybe 5% more if someone happened to notice how valuable you are to the company.

How hourly wages affect the economy

Because so many workers are employed at hourly wages, this will have an impact on the economy as well. Let’s say that 50% of the country’s workforce is performing at 75% of their efficiency.

This alone would have a 12.5% impact on the work completed by the country’s workforce in general. With better payment models, the efficiency of workplaces and countries overall could be increased.

When people are truly working efficiently, it will have a positive impact on themselves as well. They will feel like they are doing something important and really working for their money.

They could do the work that took before 8 hours to complete in 6 hours and this way spend more time with their families or doing other things. With increased efficiency, they could also do the work that before took 10 hours in 8 hours, which is just a normal workday. Imagine how much more they would accomplish in one year or a decade.

Effects of hourly wage to mentality

The hourly wage thinking begins at school. Every student must be in class the same amount of time, no matter if some of them could learn the same thing in half the time. This continues through colleges and universities, when courses are defined in hours you would need in order to complete them.

No matter how fast you could learn a certain thing, the hours you have to spend on the course are fixed. This will plant and grow the seed of inefficient work from the early school years, and this will continue until the final years of studying. Then the same thing will continue when entering the working life with an hourly wage.

When working for years on an hourly wage, if you are not at all interested in what you are doing, you will find ways to dodge the things you are supposed to do. That might be in an office job scrolling through Facebook, or just doing the things you are supposed to do, but at a slower pace. This is because the only one who will benefit from working faster is your employer. You will still be paid the same, no matter how efficient your working hours are.

4 day work weeks

There are currently different tests about cutting working hours from 8 to 6 hours per day or cutting working days from 5 per week to 4 per week. I think this could be a step in the right direction.

People have more free time, they get more rest and this way can increase the efficiency of their work. Therefore, they will be able to complete the work that before took the whole 8 hours in just 6 hours when the efficiency increased.

Advantages of hourly wage

Even though I am not a big fan of the hourly wage, I realize that it is the best payment model for some jobs. A few examples that come to mind are cashiers. When ever duty calls and customers show up, you will do the job and that’s it. Even if there are no customers, you still should get paid for being on duty.

Other things that it is good for are firefighters, and ambulance workers. Because on these jobs, when duty calls, there is no room for inefficiency. On jobs like this, it doesn’t matter how you get paid; you will have to perform when ever you are needed.

Final words

Like I said before, these are just my opinions. However, I think there is room for improvement in the payment methods employees are being paid. The hourly wage is a very simple way of payment, and I think that is why it is used so widely. Even in places where it is very inefficient and demotivating way for employees.

With better and more motivating payment methods, the efficiency of workers as well as their happiness when they do the job they are paid to do. Instead of thinking of different ways to dodge their duties, they would be earning their salary. These examples do not apply to every job out there, but sadly I have witnessed some of these things in my life as well.

I don’t have the magical solution for this problem that would just fix everything, but I would encourage you to try to work as efficiently as possible. We only have limited time on this planet, so think hard before you waste your time.

If you hate your job and it makes you want to scroll through Facebook the entire workday, maybe it is time to switch jobs. Or even completely different career. It is never too late to learn something new and do something you truly enjoy.

Maybe you should start your own business and this way you would be rewarded for the efficient work you do. I have written several posts about starting a business. You can read them here. Have a nice day.