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What does "Don’t shoot yourself in the foot" mean?

Unfortunately, most salary decisions are based on perceived performance, not on actual performance. Don’t shoot yourself in the foot.

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Someone who is saying this to you is telling you, "don't be a fool here or you will come to grief."

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To shoot yourself in the foot alludes to making a gaffe that hurts you. A firearm should be used for protection, or hunting, but a gun can occasionally misfire, and the armed person will shoot themselves in the foot.

NOAD words it like this, under its entry for shoot:

shoot oneself in the foot informal inadvertently make a situation worse for oneself.

Now, to your workplace. Someone (presumably a supervisor or co-worker) has said:

Unfortunately, most salary decisions are based on perceived performance, not on actual performance.

This means that those who get raises and bonuses at your company are not always the ones who do the best work. Instead, the employees who appear to be doing the best work (or the most work) are the ones who get recognized.

Here's an example of how this could be used: Say you're working on a project, and you end up staying late, way past quitting time. The next day, you figure, "I stayed four hours late last night; I can come in an hour late this morning." However, no one was there to see you work four hours past quitting time, yet everyone is there to observe you coming in one hour late! The boss takes notice, and thinks, "That employee is not reliable; I'm going to remember that." You have shot yourself in the foot, you've inadvertantly made things worse by failing to keep up appearences in an environment that recognizes you based on superficial observations.

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Without more context I would interpret this as "Appearances are more convincing than actual work, so do what you can to convince your superiors that your performance is good". The last sentence "Don't shoot yourself in the foot" sounds like advice to someone who isn't very willing to promote his work or performance and expects to be judged by sheer ability, which isn't the case here.

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As far as I know, "shooting yourself in the foot" is using a would-be helpful tool incorrectly or without knowledge. As a result, you do more harm than good.

This phrase is frequently used in IT environment.

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The @Irene's answer was more meaningful in my context –  Shakiba r.abadi Aug 7 '12 at 8:35
    
This answer is the earlier usage, since literally shooting yourself in the foot tends to result from poor trigger discipline, a textbook example of using a tool (gun) incorrectly. It also very occasionally could result from poor maintenance, but that only adds to the incorrect-tool-usage definition. It was extended to mean any self-defeating gaffe. –  rsegal Aug 7 '12 at 15:08

This is equivalent to don't chop off the branch you are sitting on.

Don't do anything to hurt yourself, don't be your own worst enemy, don't act against your own interest, etc.

Don't make a career limiting move.

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I've come across "shot in foot" to mean, "gave too detailed an answer which revealed their ignorance" in the context of exam marking.

For example:

Why do apples fall to Earth?

Answer "gravity" - correct, 1 mark

Answer "gravity causes the apple to move itself closer to the Earth" - incorrect, showed they have the wrong idea about gravity, no mark.

So in the context of your example, going to your boss and giving too much information - "Unfortunately we lost money because I am a poor salesman" instead of just "Unfortunately we lost money" - even though that would help him run the business better - would harm yourself.

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