If you want to make sure your instructors are focused on the important goals of the school, tie their pay scale to retention, not hours.
Rather than pay $20 an hour or class, pay a reasonable hourly or class wage or a salary, but tie the real bonuses to the number of students who are attending at their three month, six month, nine month, and one year anniversary with bigger bonuses for students earning their black belt.
If you charge testing fees, you can use that to pay these retention goals.