February 15, 2007 (PLANSPONSOR.com) - Changing its
prior holdings, the Internal Revenue Service (IRS) on
Thursday said that an accrual basis taxpayer-employer may
treat its payroll tax liability as incurred in the first tax
year - even if the related compensation is deferred under
§404 that is deductible in the second year.
IRS officials said the new holding would be true if
a
n accrual method taxpayer met the all-events test and
recurring item exception of §461, according to
Revenue Ruling 2007-12
.
According to the new ruling, the deferred
compensation scenario would be allowed if the employer
pays the payroll taxes either in Year One or before the
earlier of September 15 of Year Two or the date the
company files a timely federal income tax return for Year
One, which would mean that the payroll taxes generally
would be treated as incurred by the employer in Year
One.
However, the compensation to which the payroll
taxes relate is deferred compensation that is properly
deductible under §404 in Year Two, the IRS said.
The IRS said Thursday’s holding amplifies
Revenue Ruling 96-51 and revokes Revenue Ruling
69-587.
Tax officials said that because of the rule change,
a taxpayer that wants to change its treatment of payroll
taxes associated with deferred compensation has to get
IRS permission.
But what if the disease that’s being spread IS the
co-worker?
Researchers at the University of Washington have just
published a new study that claims that “bad apples” at work
– people who don’t do their fair share of the work, who are
chronically unhappy and emotionally unstable, or who bully
or attack others
– actually create a toxic work environment that truly does
spoil the whole bunch.
The researchers’ paper, appearing in the current issue
of Research in Organizational Behavior, examines how, when
and why the behaviors of one negative member can have
powerful and often detrimental influence on teams and
groups.
Wife Experiences
It was inspired by the experience of the wife of William
Felps, a doctoral student at the UW Business School and the
study’s lead author.
Felps’ wife was unhappy at work and characterized the
environment as cold and unfriendly. Then, she said, a funny
thing happened. One of her co-workers who was particularly
caustic and was always making fun of other people at the
office came down with an illness that caused him to be away
for several days.
“And when he was gone, my wife said that the atmosphere
of the office changed dramatically,” Felps said. “People
started helping each other, playing classical music on
their radios, and going out for drinks after work. But when
he returned to the office, things returned to the
unpleasant way they were. She hadn’t noticed this employee
as being a very important person in the office before he
came down with this illness but, upon observing the social
atmosphere when he was gone, she came to believe that he
had a profound and negative impact. He truly was the “bad
apple” that spoiled the barrel.”
Following that realization, Felps, together with Terence
Mitchell, a professor of management and organization in the
Business School and UW psychology professor, analyzed about
two dozen published studies that focused on how teams and
groups of employees interact, and specifically how having
bad teammates can destroy a good team.
They found that a single “toxic” or negative team member
can be the catalyst for downward spirals in organizations.
In a follow-up study, the researchers found the vast
majority of the people they surveyed could identify at
least one “bad apple” that had produced organizational
dysfunction.
In one study of about 50 manufacturing teams, they found
that teams that had a member who was disagreeable or
irresponsible were much more likely to have conflict, have
poor communication within the team and refuse to cooperate
with one another. Consequently, the teams performed
poorly.
According to Felps, group members will react to a
negative member in one of three ways:
motivational intervention,
rejection or
defensiveness.
In the first scenario, members will express their
concerns and ask the individual to change his behavior and,
if unsuccessful, the negative member can be removed or
rejected. If either the motivation intervention or
rejection is successful, the negative member never becomes
a "bad apple" and the "barrel" of employees is spared.
These two options, however, require that the teammates have
some power: when underpowered, teammates become frustrated,
distracted and defensive, according to a press release.
Defense Mechanisms
Common defensive mechanisms employees use to cope with
these "bad apples" include:
denial,
social withdrawal,
anger,
anxiety and
fear.
Trust in the team deteriorates and as the group loses
its positive culture, members physically and
psychologically disengage themselves from the team.
Negative Outweighs Positive
Felps and Mitchell also found that negative behavior
outweighs positive behavior -- that is, a "bad apple" can
spoil the barrel but one or two good workers can't cure the
situation.
"People do not expect negative events and behaviors, so
when we see them we pay attention to them, ruminate over
them and generally attempt to marshal all our resources to
cope with the negativity in some way," Mitchell said. "Good
behavior is not put into the spotlight as much as negative
behavior is."
The authors caution there's a difference between "bad
apples" and employees who think outside the box and
challenge the status quo. Since these "positive deviants"
rock the boat, they may not always be appreciated. And, as
Felps and Mitchell argue, unlike "bad apples," "positive
deviants" actually help spark organizational
innovation.
The researchers note that managers at companies,
particularly those in which employees often work in teams,
should take special care when hiring new employees.