Flexible work schedules and hourly pay are not mutually exclusive. Salary doesn't suddenly make an employee more productive. An hourly wage does not make an employee unethical.

I've seen well run firms where everyone including the CEO was hourly. Having a meaningful correlation between wages and workflow was an advantage. It provided data for better staffing. Helped employee moral as well.

Disincentivizing inadequate staffing was seen as a good thing.