An article in the WSJ argued for a third path, making employees entrepreneurs in their positions, to,be paid based on their performance.
It is a win-win situation, they carry their own professional liability insurance, etc., cover their own worker's comp, (as do I), and get paid better and faster than the average employee because I can pay them better for their services (lower overhead for me). Checks are issued when they hand me the invoice, so they don't even have the pay period lag most employees have.
Or, just pay them in stock.