3 Toxic Pay Myths Costing You Culture

Let’s talk about one of the dumbest ideas to survive this long in the business world:

The belief that money is a motivator.

Now before the LinkedIn police show up with pitchforks and spreadsheets, let me clarify:
Yes, people need to be paid well. Fairly. Transparently.

But this nonsense about tying performance bonuses to individual motivation or alignment with company goals?
That’s where the damage starts.

I know this because I’ve done it. Multiple times. Across multiple industries.
I’ve also had the misfortune of watching other founders step into this exact same trap while trying to build high-performing teams at scale.

So today, I’m going to break down the myth — and offer the uncomfortable, counterintuitive truth that might actually save your culture before it implodes.

🧨 Myth #1: “Bonuses create alignment.”

No. Bonuses create resentment.

Here’s what actually happens:
You introduce a well-meaning bonus system tied to KPIs or “impact” and think you're being strategic. What you’re really doing is handing out emotional grenades wrapped in corporate-speak.

• “Wait, why did Sarah get more than me?”

• “Why did my score go down when I worked 60 hours a week?”

• “I thought we were all in this together?”

Now you’ve got smart, well-intentioned people spending more time doing mental math on everyone else’s compensation than focusing on the work. Welcome to your new culture: a low-trust, high-drama spreadsheet Olympics.

Even worse? In a bad year, nobody gets a bonus — and now your entire company is demoralized, just when you need them most.

🔥 Myth #2: “Everyone influences performance, so everyone should share in the outcome.”

This is where the kumbaya logic really starts to unravel.

The brutal truth?
Most employees don’t have meaningful influence on your revenue, profit, or strategic outcomes.

Not because they don’t work hard. Not because they’re not essential.
But because the levers of change live at the top — with the founders, the product leads, the GTM strategists, and yes, sometimes with the board breathing down your neck.

But try telling that to your junior PM who just got a smaller bonus because Q3 numbers tanked.
It doesn’t build shared ownership. It builds shared confusion.

If anything, performance pay should be reserved for those with actual influence.
But most companies flip that logic — executives get base plus bonus, while frontline staff get underpaid and under-empowered. It’s not just unfair — it’s structurally incoherent.

💣 Myth #3: “If we don’t use money, how will we motivate people?”

Ah yes, the founder’s favorite excuse:
“If I take away bonuses, won’t people stop trying?”

Let’s translate that in plain English:
“I don’t want to do the hard work of actually leading.”

Because here’s what it really takes to motivate people:

• Giving them meaningful work.

• Making them feel part of something.

• Treating them like adults who want to do a good job, not Pavlovian dogs salivating over a 5% carrot.

• Creating clarity, feedback, and belonging — every damn day.

That’s leadership.
Performance bonuses? That’s just duct tape for bad management.

So What’s the Alternative?

It’s simple, but not easy.

✅ Pay people what they’re worth.
✅ Be radically clear about how comp is determined.
✅ Kill the bonus.
✅ And use the headspace you’ve now freed up to actually build culture — not just manage expectations.

When you pay people fairly and stop using money as a manipulation device, something magical happens:

People start showing up because they care.
Not because they’re counting.

They do the work because they believe in it.
Not because there’s a dangling carrot at year-end.

And that’s the foundation of real performance:
Not metrics. Not multipliers. Not spreadsheets.
Shared purpose.

💡 Founders, especially you:

If you're in growth mode right now — this is the moment.
You’re hiring. Structuring comp. Trying to scale culture without breaking it.

Don’t let some legacy MBA logic convince you that variable pay is the answer. It isn’t.
It’s a shortcut dressed as a system.
And it’ll rot your team from the inside out — slowly, invisibly, but surely.

Burn the bonus model.
Build the team.

The ROI is better than anything a spreadsheet can show you.

Want to burn some other invisible rules down while you’re at it?
Stick around. This is Decision Lab — where sacred cows come to die.
🐄🔥

Psst! My book "The Invisible Rulebook" is coming out in Q1 2026. Want to read pre-release chapters, join Inner Circle meet-ups, and actually shape the final book? Get in on it early. I’m looking for folks who want to help craft the final version of the book while enjoying exclusive content.

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