Why do we even speak about this? In no way because it is a kind of a pet subject for endless Holy Wars where everyone has something to say, but because, once we shape up our own system vision in this regard, we consider it possible to project it and improve it for ourselves.
Yes, we apply hourly rates to pay developers and designers, and we have managed to make it encouraging. How? Come and learn.
— hourly vs. fixed
— Intricacy of hourly pay introduction
— What employees will tell you first three months
— What we gained three years after the introduction
— Estimation of development period with hourly pay system
— Applicability of hourly pay to different businesses
— Other ways of motivating and de-motivating IT personnel
+ Bonus: myths and pitfalls we saw during introduction of this system. A true story, nothing made up.