Profit First, Bonuses Later

Many companies are under the impression that they should pay high salaries and big bonuses to "keep the employees happy."  While employee satisfaction is important  it cannot come at the expense of profits. 

It is certainly true that happy employees stick around longer and help you grow a profitable business, a company's success depends on consistent profits to keep the cash flow moving and the bankers happy.

It is also important that the CEO instill a culture of "profits first" before handing out higher salaries or big bonuses.  Pay the highest salaries the company can afford while maintaining profitability.  Base bonuses on performance, including your own.

Jim Worrell, The American Entrepreneur