Righto
That is why somepeople get paid more than others. I agree with you totally. Just because Employee A is better than Employee B doesn't give him a buy from coming into work. That talent just gives you negotiation power at raise time.
The thing that bothers me about this thread is nobody really seems to be answering the question. The poster is being attacked for asking the question and the thread has been hijacked to "what is the proper way to manage people" It appears that his needs are out of his control and he really cannot "trust" the contractors to report their own time accurately. I was a contractor as well, so I have an interest in this topic.