Depends on your company. Sounds like your implementation of hourly vs. salary is one of the less desirable cases. In many cases, there's a really good reason to vary the ways you compensate people based upon the type of work that is needed. But the decision needs to be a fair trade both ways.
For employees in a company, hourly really works best when the connection between productivity and time is very reliable. That usually includes cases like:
Cases where pretty much anyone with the right skills can make X widgets per hour. Whether that's a very concrete thing like a meal or a pair of shoes, or a less physical result like running tests for a certain IT component or installing a server in a very rigid environment.
Cases where being there for some number of hours and dealing with what comes is the majority of the work - retail, customer service, etc - it's not so much "servicing x customers" as answering needs as they arise. If person A isn't there, person B has to be, since we can't have a situation where business is open an no one is doing this. Granted, there's still cases of efficiency measurement - but the general thought is that if there was no need this hour, you'd still get paid just for being there.
This stuff fits well with overtime pay - companies will get a tangible benefit from the overtime, employees get compensated for providing that benefit.
It also implies that in most cases, work could be transferred somewhat easily. If Employee A can't work overtime this week, Employee B can and can relatively easily pick up the work that A would have done.
- overtime pay when extra hours are requested
- very clear on the job/off the job boundaries
- not every job will guarantee a minimum. I know plenty of folks working hourly positions and not picking up enough hours to pay the rent.
- Many truly hourly jobs are lower on the decision and higher on the formal procedures. The company wants to make sure that the connection between your time there and the value they receive for it are tightly linked. Expect more supervision and more specific rules.
- usually linked to specific hours - even in a widget-per-hour job - the employer will likely have some scarce resources so that no everyone can be in at their own choosing. In the service industry, this is an absolute limit - people have to work standard hours and shifts to give the service in a reliable way during business hours.
- income is very tightly tied to company value. If you are easilyi replaceable and highly regimented in the job, it's easier to avoid paying more by finding new employees.
Overwhelmingly, salary is best for a case where work can't easily be boiled down to such a simple equation that is linked to time. For managers, knowledge workers, and other high-decision jobs, the nature of your decision has a radical impact on both the sucess of the company and amount of overtime. In most salaried roles, employees are expected to work smart not hard - finding ways to improve efficiency be means that fit within the corporate rules and local legislation.
The employer should have chosen this method because they can't find a way to link your hours to their benefit. It's too non-deterministic. One week the employee will get tons of work done with no overtime, the next week a crisis will hit, and many hours of overtime will be required to maintain the status quo.
- Most salaried jobs imply a certain degree of authority and decision making. Note - not necessarily managerial authority - a software developer is owner of his code, a lawyer owns his client's projects, a doctor owns his patient's well being.
- There's usually a more flexible give and take with how work is done what training options exist. In higher level positions, employees are expected to control their own training plans.
- Some degree of schedule control - there may be core hours and other specifics, but usually how much overtime is required is somewhat within the employee's purview. If I care about a project deeply, I work extra, if I don't, I do the bare minimum to get the job done and over. It's rare to have truly obligatory overtime (come in and work late or be fired)
- Guaranteed salary
- more formality in hiring/firing
- Overtime happens. The party line is "presumably you've negotiated a high enough salary to compensate for that"
- Your professional development is likely to be more unclear and more your responsibity
But what about contractors?
Especially in tech work, contractors make this rule trickier. They may do the same job as a salaried person - so why do they get to work hourly? Well.. it may be the same skill set but if the company is wise, it's usually that:
- Contractors are satisfying a temporary need - the work will go away in time, so hiring a long-term employee doesn't make sense - the company is paying extra to be able to change or discontinue the work.
- Contractors are providing skilled hard to find labor and not making decisions that impact the company deeply.
- Potential employees are working on a test basis as contractors.
- usually more money - a higher take home salary as compensation for the temporary nature of the work
- less obligation to the company - employees are usually expected to take on work for the company's good that isn't strictly related to their job skills.
- little to no training - the company will provide the bare minimum it can get away with
- can be terminated at any time with little warning
- more expectation to do what you are told, and not take initiative or be invested in the business