With outsourcing, payment schemes vary with
different contractual forms, but lump-sum pay-
ments upon completion of certain tasks is the
. usual method for paying contractors (see Fig. 1) .
When contractors hire workers, or when firms
perform the activity in-house by hiring workers
directly, they have at least two options for paying
workers }according to their accomplishments a
. piece wage or on the basis of time spent working
.(a wage) . The latter can further be divided into an
hourly wage or a salary. The means by which
workers are compensated falls under the realm of
contractual arrangements and organizational
. structures (Spence, 1975; Williamson, 1980) , and
different payment schemes have distinctive trans-
action cost implications (Roumasset and Uy,
.
1980) .