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This column is brought to you by arrangement with The New York Times Syndicate. You can e-mail the authors at winning@nytimes.com, include your name, occupation, city and country.

Bonus time just came and went at my company, and once again I got less than I expected, especially considering my performance review. Do I say something to my boss, or just accept the fact that companies will always try to give you as little money as possible?
–Name withheld, Valparaiso, California

If there is one topic that unites employees everywhere, it is compensation. Almost no one thinks he's paid enough. Interestingly, compensation also unites employers. The vast majority will tell you they pay their people fairly, if not better. Plenty of people like you fall into the gulf between those two viewpoints. They wind up confused, frustrated and even cynical about the whole pay game.

Indeed, there are few issues that do more to disenfranchise employees from management like complaints over compensation. Which is too bad, to put it mildly. Because you simply cannot be a great leader and get great results in today's marketplace without paying people the right way – with no nonsense and with tonnes of differentiation.

That doesn't sound like it's happening at your company. Why exactly, we can't tell from your email. But we do know that when people feel underpaid, it's usually because their bosses deal with compensation all wrong. That is, they're either skinflints or sprinklers.

Skinflints first. These types scrutinise expense reports with Scrooge-like vigilance. They look for the errant umbrella charged to the company or, God forbid, the meal receipt with a dessert. Worse, when it comes to giving out raises and bonuses, skinflints practically writhe in pain. Many are experts in delivering the "It's been a rough year" speech even in good times.

Unfortunately, these jerks are everywhere and we can only guess what makes these people tick. But from our experience, most seem to have a constitutional paranoia about being taken. Whatever. Their psychosis is deadly for motivation, creativity, productivity and just about everything good in an organisation.

Some bosses are sprinklers. They aren't necessarily cheap, they just give everybody on their teams about the same size raise or bonus – regardless of performance. Many sprinklers will tell you their approach is fair and promotes teamwork. Indeed, some even use that argument to defend across-the-board pay cuts during tough financial periods.
With very few exceptions, however, such so-called shared sacrifice is just evidence of a manager too weak to make the hard calls. No wonder it's a practice that invariably drives top performers toward the door.
Other sprinklers aren't about fairness as much as they are about phoniness. They distribute equal chunks of change, whether the bonus pool is US$2mn, 200,000 or 20,000. They just can't bring themselves to tell their employees where they really stand, particularly underperformers. It's just so much easier. Some sprinklers will tell you it's kinder, too. Why not just let everyone think they're doing OK? Again, this is merely weak management and inevitably sends good people packing. So how can a boss get compensation right? It's actually very easy.
Step one: Stop the nonsense. Conduct performance appraisals that leave no ambiguity as to where each employee stands.
Step two: Pay accordingly. That means if someone isn't delivering, don't give him a little smidgen of a bonus just to keep to his nose in joint. Pay him nothing additional. If someone is performing so-so, make him feel it with a so-so sized check, and not a dollar more.
But most important, make your compensation system really mean something. Compensate your stars as much as you can. Use money – big money – to make a resounding statement about the payback of delivering superior results. May be giving your top employees bigger-than-ever-before checks won't come naturally to you at first, especially when it comes in tandem with giving other employees smaller-than-usual ones.
But fight the discomfort. Part of being a truly effective leader is embracing a spirit of financial generosity. Indeed, the act of making your best people feel richer than they ever imagined should excite you as much as it does them. It should thrill you. If not, keep giving until it does.
Look, money talks. Of course, as a manager, you have to create a work environment that is exciting and challenging. But never underestimate the power of cash to deliver results. When you pay your people the right way, you don't just get your stars to stay. You build a team that trusts you and wants to win for you. They know you put your money where your mouth is

What characteristics would you say are the most important when choosing a company CEO or the leader of a country?
Simplicio D. Victoria, Los Angeles

Damages? How about deadens? That's a better way to describe what bureaucracy does; it sucks the life out of places. It turns perfectly normal people, given a smidgen of authority, into rule-bound technocrats and transforms what should be candid conversations about real issues into jargon-laden gobbledygook. In short, bureaucracy gums everything up and slows everything down. It's a competitiveness killer.

And yet, for all its destructive power, and for all the people who claim to abhor it, bureaucracy almost never gets the kind of fight-back it deserves. Most people simply suffer through it. We both just finished My Grandfather's Son, the engrossing memoir by Supreme Court Justice Clarence Thomas. In one chapter, Thomas describes the Kafka-like experience of trying to insert innovation into the US Equal Employment Opportunity Commission (EEOC), where he was chairman during the Reagan years. Sure, the EEOC is a government agency. But without doubt, Thomas' story will also sound painfully familiar to the legions of businesspeople who have run headlong into the stultifying effects of corporate officialdom. So why do people put up with it?

Probably because bureaucracy just seems like too big a monster for any one individual to slay. And we'd agree, unless that individual happens to be the leader. After all, leaders set the tone for their organisations through the values they choose and the behaviours they demonstrate. And ultimately, leaders, and leaders alone, have the power to put the bureaucracy eradication process in motion.

Not to make that sound easy. In fact, declaring a war on bureaucracy is not unlike declaring a war on, say, cancer or drugs. From the outset, you know total victory is impossible, and the battle itself will be never-ending. To compound matters, an anti-bureaucracy campaign can really shock a company. Sure, bureaucracy is almost everyone's sworn enemy, but it's still the enemy within. The minute leaders announce they're on its trail and taking no prisoners, people can get defensive. They can really quake. Let them. It's the only way they will believe you're fighting in earnest.

And then go for it. At every opportunity, poke fun at anyone who appears to install process for process's sake; rib people who get all puffy about their positions or titles. Make a scene every time someone says something hollow or phony just to avoid a contentious issue. We're not saying be cruel. We're saying be relentless and outrageous. Just make it so unpleasant for people to act rigid or formal that they physically recoil every time they even think of uttering, "That's the way it's always been done." And while you're at it, make people afraid – very afraid – of scheduling any kind of formal presentation, especially if it involves slides in a darkened room. That all-too-common practice is a total bureaucracy enabler. It makes idea-transfer so one-way and ceremonial.

What you want instead is an organisation where ideas flow freely up, down and sideways, in the halls and elevators, and where their value has nothing to do with the stripes on the shoulder of the person talking, and everything to do with the insight and creativity of the brain inside their head. So, if you're a leader, while you're out there making fun of bureaucrats for their more obvious transgressions, make sure you're also building an organisation where people who demonstrate an impassioned and limitless approach to ideas are amply rewarded and celebrated as role models. Love the people who hate presentations.

Finally, leaders can fight bureaucracy by letting their people fail. Not often, of course. But a company that routinely hands its high-potential managers risky assignments and says, "Swing for the fences," inevitably breeds a culture of excitement and engagement and sends the organisation a bold message. This company is not a machine, and you are not a cog. Which brings us back, actually, to Clarence Thomas' story. His entire life, there were people who tried to stop him from challenging the status quo. Because of his race, he could not go to certain schools or work at certain law firms. He could not even hold certain beliefs. In time, Thomas came to consider these dictums offensive. His success is a testament to his refusal to surrender to them. If you're a business leader, you can't surrender to the status quo either. True, you will never be able to eliminate every vestige of deadening bureaucracy from your organisation. But try like crazy anyway. The upside is huge. All it takes is courage.

Why are so many private equity deals blowing up?
–Alan Engle, Great Neck, NY

The short answer is that the world has changed (read: the US sub-prime mortgage mess has erupted). A lot of companies that were once hell-bent on acquiring hot new properties suddenly want out of deals that are starting to look too cold for comfort.
It's sort of like those hours after the Titanic ran afoul of the iceberg. The realists in the crowd didn't exactly stroll to the lifeboats. They bolted. That's what you're seeing now – and not just from private equity firms. Many companies, emboldened by the strong economy and its abundance of low-cost credit, have spent the last few years buying up every acquisition target with a pulse. Along the way, dealmakers didn't exactly ignore risk; they just thought they'd be able to handle any form of mishegoss, or craziness, later.

Well, it's later now, and dealmakers are starting to bail. It's amazing that some can. Or at least, they can try – thanks to MAC, the Material Adverse Change clause embedded in virtually every merger-and-acquisition contract. Indeed, in our view, what's happening with MAC right now provides an important, if wince-inducing, management lesson about when a CEO should delegate the details concerning significant risk – which is basically never. Wince-inducing because it's astonishingly easy to do otherwise. Imagine yourself at the centre of a deal being forged. Your team started out the process by making the target company's team a generous offer of, say, US$23 a share. "Ridiculous!" was their retort. "We're not going to our board with anything less than US$27."

Then, for the next slew of days, if not weeks, you wrangle, begrudging each other US$.50 at a time. Finally, after negotiating every last provision of the financials, the end comes into sight with a price of US$25.50, right in the middle with a little sweetener thrown in for the target.

And, no surprise, it is 8pm on a Friday night. So you and the other CEO shake hands, in equal parts exhausted and exultant, and turn to the lawyers. "Paper this up," you both say, "and have it ready before the market opens on Monday." At which point, the lawyers go into hyper-drive.

One of their jobs is to come up with a list of all the things that could go wrong between the announcement of the deal and its close, like a major strike against the target company or one of its big customers going belly up. Such an accounting of every possible adverse change is the more straightforward part of the contract process, and usually gets done without too much sound and fury.

The hard part – the part that usually gets short shrift – is the clause in the contract that defines exactly what would make any adverse change material, that is, significant enough to merit killing the deal. Materiality is hard to nail down for several reasons, but the main one is simply that the laws governing it are not particularly crisp. That makes it very difficult under any circumstances, let alone high-pressure ones, to put a fine point on the meaning of the term. Is it a 20 per cent hit to earnings? Or a 15 per cent decrease in revenues? Who knows? And so, the lawyers usually end up leaving the language vague enough for both sides to say, "Well, OK. Good enough."

Fast forward, then, to an adverse change, like the sub-prime crisis we're in right now and you understand why so many companies are engaged in legal slugfests over what their MAC clauses technically allow. Sallie Mae, the largest student loan provider in the US, and the private equity firm J C Flowers could be in court for years, for instance, as could Cerberus, the international private investment firm, and United Rentals, the world's largest equipment rental company. What a waste of time, energy and money for everyone involved. In time, of course, credit will loosen and the economy will recover, and when that happens, the details of any given MAC clause will matter a lot less. But even then, there will always be contracts with room for manoeuvering and mischief around their terms, if only because there will always be dealmakers who would rather hedge their bets than face the reality that sometimes, MAC happens.

If the current sub-prime mess teaches us anything, however, it is that principals should stay with their deals through the bitter end, sorting out of every last detail surrounding risk. It's grunt work, we realise, gritty, boring and plain not fun.
But when the stakes are high, you have no choice. Don't delegate the pain away.