I think there is a better alternative to the following two common compensation structures:
a) Hourly wage – this gives an inherent incentive to extend the length of time working on projects, especially if it’s a one-time project.
b) Salaries- this gives an inherent incentive to do just as much required by the position without exceeding expectations.
I’ve found a better approach is paying for long term performance where a request for proposal and and acceptance is made/accepted for every project.
The end goal of staffing should be proactive leadership where all team members have an incentive to analyze opportunities, find solutions and prevent challenges.
I think it’s ideal to make all team members intrapreneurs so the company stays lean and proactive.
Lastly, feedback systems and the increased transparency of information through technology helps ensure team members are accountable and productive.
Business schools advocate a “balanced scorecard” approach for measuring performance where individuals are compensated on multiple factors–qualitative and quantitative.