Stop sending paychecks, they figure it out eventually.
They may have performed work for you, and they might not have gotten paid. You open yourself to so much liability it's not funny. A judge would look very unkindly to such practice.
On odesk you hire people for projects of limited time.
He didn't mean that you don't pay the people you've hired if they do the work they promised - that will get you kicked out of odesk really quickly.
What he does mean by "gentle fire" is "don't hire them again for more work".
And that's how it's supposed to work: odesk freelancers have no right to expect being hired by you for second job if they didn't perform to your satisfaction on their first job, for which they were paid the amount they agreed to be paid (just to make this clear).