'Smokin' is for sure not right. Having to hammer the pads into place is not also. The pads should NOT contact the disks when newly installed, until the brakes are applied. Otherwise indicates either you did not fully retract the pistons, or the pads are incorrect.
When the piston pushes the pad against the disk under hydraulic pressure, The piston seal is in an 'extended' position. On releasing pressure, the seal should retract the piston a few mils, and this should prevent the problem you are having. Note that a fully extended piston with old pads may have contamination hidden by the dust bellows. This can also prevent proper piston retraction if the assembly is not serviced properly.