Some business owners are of the opinion that you should hire the best, and retain them with great pay and benefits. Some other business owners, who value individual skills less and the bottom line more, argue that you should hire just about anyone who comes through the door, and pay them the lowest amount that they will work for, or an amount that is set in stone. But of course, you need to pay different people for the different levels of contribution that they make to your organization. You should never simply set a group of salaries for everybody, and let that be the only method you use for determining everyone’s compensation. Doing that will be unfair to everyone- and when your best performers jump ship to work for someone who compensates them more fairly, it will be horrendously unfair to you.
Remember that people will, first and foremost, do what they are paid to do. If you pay someone to make a sale, then that is the mission that they will be out to accomplish. They will likely show very little interest in keeping an existing customer happy, unless you then also compensate them for customer retention as well. If you pay someone a salary, their only real goal will be to keep their job and hope that they can acquire a raise. If you pay someone by the hour, they will be motivated primarily to work as many hours as they can stand to.
The trick is, paying a salesperson by the hour would torpedo your business. They could just hide out in the back room, doing busy work or taking a nap. And giving a salary to an employee in a service capacity would likely result in a great increase in their absences as well as record tardiness. And just imagine the farce it would be if you paid your corporate level executives by the hour- so much for having company loyalty.