The age old question for entrepreneurs with growing teams: when does is stop being smart to pay by the hour? When is a salary the right move?

Depending on the employee, how you pay them can make all the difference in both their productivity and your return on investment. And while one option definitely (usually) costs more than the other, what you get back for that money is just as variable.

We had to learn this ourselves, with our own businesses depending on a remote team of dozens.

Our mixture of full-time employees, part-timers, and freelancers requires a careful balance of pay-affecting factors. With pros and cons to both approaches, weighing the cost of employee pay with the value of employee work can be tricky business — especially when the pay structure has a serious impact on the quality of their work.

Today, we discuss how to decide which way you’ll pay a given employee, how to set expectations, and how to ensure you’ll both get what you need from each other in a mutually beneficial arrangement. Click play at the top of the page!