English Explanation of Pirkei Avot 2:1

Rabbi Said: which is the straight path that a man should choose for himself? One which is an honor to the person adopting it, and [on account of which] honor [accrues] to him from others.
And be careful with a light commandment as with a grave one, for you did know not the reward for the fulfillment of the commandments.
Also, reckon the loss [that may be sustained through the fulfillment] of a commandment against the reward [accruing] thereby, and the gain [that may be obtained through the committing] of a transgression against the loss [entailed] thereby.
Apply your mind to three things and you will not come into the clutches of sin: Know what there is above you: an eye that sees, an ear that hears, and all your deeds are written in a book.
“Rabbi” in the Mishnah without a name refers to Rabbi Judah Hanasi (the Prince), the son of Rabban Shimon ben Gamaliel. He lived in a city called Beth Shearim, afterwards in Beth Shean and at the end of his life he moved to Tzippori. Rabbi acquired eternal fame as the editor of the Mishnah.
Note that this mishnah through mishnah seven of this chapter continues a list of statements made by descendents of Hillel, whose first statement was in mishnah twelve of the previous chapter.
All of Rabbi’s statements deal in one way or another with the reward that one receives for one’s good deeds and the punishments for transgressions. Rabbi is dealing with the question, how does a person choose a path in life based on the rewards and losses that may come to him through choosing this path. Note that some of these rewards may be the recognition that he receives from others but that usually Rabbi refers to a reward given by God.
The first thing that Rabbi teaches is that a person should choose a path that is both honorable to himself, and will bring him honor from others. Maimonides understood this as advice to take the “golden mean”, the middle path, in all aspects of life. For instance if a person has a lot of money and hoards it all for himself, it might bring honor (pleasure) to him, but if he doesn’t give any to others, others will not praise him. And if he gives all of his money away, others will praise him, but he will not have any for himself. Therefore, one should choose an in-between path (between 10 and 20 percent of one’s money), both in this matter and in all things in life. Another understanding of this statement is that one should strive to choose a path that he himself believes is correct and one which is deemed correct by others. A person must be true both to himself, but he can also not afford to ignore the society in which he lives.
The second statement is that one should be careful in the observance of commandments that seem to him “light” just as he is careful in the observance of what he considers more serious commandments. There is an interesting parable given on this statement. “R. Hiyya taught by way of parable: “A king brought laborers into one of his orchards, but did not inform them in advance what would be the compensation for the respective plants they would cultivate. For had he given them this information, each of them would have looked for that plant for which the compensation was generous and taken care of it. As a result only some of the work in the orchard would have been taken care of; some would have been neglected. Said Rabbi Acha in the name of Rabbi Abba bar Kahana: The Holy One did not reveal what would be the reward for the different commandments of the Torah, lest only some of these be carried out, while some would be neglected.”
The third statement teaches that one should pay attention to the reward that one might receive for performing a commandment, even though there is a financial loss through its performance. The same is true of the opposite. Although one might make a financial gain by committing a sin, there is a loss that is worse than the financial gain. Obviously the reward referred to in the first half of Rabbi’s statement and the loss in the second half are referring to those meted out by God.
All of the above statements were based upon the belief that God rewards those who perform the commandments and punishes those who transgress. [Note this statement is a matter of faith; it cannot be empirically observed in this world]. This is the direct meaning of Rabbi’s last statement. God (figuratively) sees all of our actions, hears all of our words, and records them in a book. A person should always act as if he is in the presence of God. If he keeps that in mind he will distance himself from sin.