This would have helped me tremendously when I was studying complex numbers for signal processing. I guess I'm a visual learner. I find that to be helpful in some field in math, but held me back when I was studying statistics.
I would second this advice of staying away from #2. We tried option #2, but it required a lot of handholding. Not to mention the risk of contractors doing the minimum amount of work to meet requirements. Also, after the contract ended, we were left with nobody in our team with enough knowledge of the code to modify it quickly. The process of reading and learning the code (and to merge it into your own thought process) can take as long as writing the code itself.
Unless one is severely underpaid, I don't think asking for a raise without doing extraordinary contribution makes sense.
Mathematically speaking, for someone to get 10% raise above market price, they must demonstrate 10% extra output from market. Granted this is not how the real world works, partly because performance is so difficult to measure objectively without being vulnerable to gaming. So, without rigid metrics and incentive program, this problem degenerates into subjective assessment.
Now how do you feel when you tip someone and they ask for another 50 cents?