One of the most important things a leader must do is keep his or her business mindset separate from society’s mindset. This task is difficult and takes continual adjustments. Failing to keep the mindsets separate results in leaders becoming too politically correct in the workplace and creates the real possibility the leader will unwittingly usher a welfare state into their workplace. Welfare states evolve slowly in a business. They begin with the weakened mindset and misguided priorities of the leadership in an organization. And when left unchecked, the creep of mediocrity and entitlement gradually diminishes the performance-based culture needed to grow a vibrant organization and puts a business on the quicksand of entitlement. Has your workplace become a welfare state? Here are four sure-fire signs it has and strategies to correct the error:

1. Leaders feel they must spend equal time with everyone. This failure to leverage strengths and misuse resources on weaknesses is a classic sign of a corporate welfare state. Leaders fail here because they have a corrupt understanding of “fairness.” In business, you must run a meritocracy, and in a meritocracy, treating people fairly doesn’t mean you treat them all alike. Instead, it means you treat people in a manner they earn and deserve—and not everyone in an organization has earned or deserves the same pay plan, discretion, schedule, resources or amount of a leader’s time.

2. Compensation structures make it easy for underachievers to make a living. If your pay plan and bonus structure rewards average or below performances, you are conditioning people to be run of the mill and have found unique and creative ways to subsidize the marginal, mediocre and moronic. When you unwittingly endorse and reinforce lousy performances with a misguided pay plan, you can expect to see more of it, and you can’t blame the performer. After all, he’s just behaving in a way that you’ve sanctioned in the past.

3. Tenure, credentials and experience substitute for results. If the next person in line for a job or a raise is anyone other than the person best capable of doing the job, you have created entitlement and welfare in your business. You don’t “owe” anyone a shot at the promotion just because they’ve hung around longer than anyone else. You’re running a business, not the royal family.

4. You measure loyal performers by the number of years they’ve worked in your organization. In a meritocracy, loyalty is not measured merely by the fact that someone shows up at the same place, at the same time, for a certain number of years. This may be good attendance, but it’s not how you should measure loyalty. In fact, measuring loyalty in this manner creates a sense of entitlement in an employee. They think they have something coming just because they’ve racked up a certain number of years with your organization. In a nutshell, loyalty is performance. In fact, the most disloyal thing a person can do to an organization is to stop performing. It’s great that someone has stuck with your company for a long time, but my guess is they weren’t volunteering or kidnapped and pressed into service. They were paid to show up and presented opportunities to grow and advance. It was a win/win. If someone has been with you a long time and still performs well then you really have a winner. But if your prime measurement of being loyal is tenure, you would have to label the one year employee who is your top performer as disloyal. This would be ridiculous and so is measuring loyalty by the calendar. Measure it by results.

If any of these four characteristics ring true, you have work to do. In society, it may be acceptable to treat everyone equally, honor tenure and to be everything to everyone, but in business, it’s a death wish.