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  • October 25, 2022 11:36 AM | Dena A Culpepper (Administrator)

    By: Dustin Paschal  

    I recently attended our state’s annual conference, The HR Southwest Conference, in fantastic Fort Worth.  It was the second year back in-person since Covid and only the first year back as a fully in-person conference.  The energy at the conference and amongst the attendees cemented what I already believe – fun is important!


    HR Southwest embodies the tenants of one of my favorite books, Do It Well. Make It Fun. As author Ron Culberson said about the concept of the book, “Do things well, make them fun, and you’ll find more success in your life.”  I have always tried to live my life using this concept but had never seen it boiled down until Ron’s book. 


    I believed in the book so much that when I became President of my local chapter, DallasHR, I bought copies for each of my board members.  I encouraged them to read the book and I committed that as a board, we would attempt to live out its principles during my presidential term.  We had quarterly board-only happy hours that were about nothing more than fellowship.  We celebrated the birthdays of every one of our board members and chapter staff.  We incorporated jokes into our monthly luncheons amid all the announcements.  We added a “Good News” portion to our board meetings and monthly luncheons.  Plain and simple…we just had fun!


    I believe that it’s such an easy concept but it’s also one that we often forget or that is too easily disregarded as unprofessional.  We become so focused on executing the tasks or looking polished or doing the right thing, that we forget to have fun in the process. 


    Let me give you a very basic and simple example that brings us back to HR Southwest.  In my day job, I am an employment lawyer.  I have also presented annually at the conference.  When I’m not presenting, you can find me in shorts and flip flops if the weather is nice.  For years, it was an ongoing joke with regular attendees that you could spot my business partner and me around conference that way – the “lawyers in flip flops.”  That is such a basic example, but I believe it exemplifies the concept.  I could be professional and put energy and effort into an effective and informative legal presentation, but I could also cut loose and have fun at conference with my fellow attendees.  The two are not mutually exclusive.


    One of the most admired companies in the world knows that the concepts of fun and good work are not mutually exclusive.  Southwest Airlines has been living this mantra from its first day.  My cousin is the Senior Director of Employee Experience for Southwest Airlines and I see firsthand how much time, energy, and though Southwest Airlines puts into having fun while not sacrificing good work.  Consider this quote from Herb Kelleher that Ron highlighted in his book: “If work was more fun, it would feel less like work.”


    I am lucky to have a business partner that understands the value of fun as much as I do.  And I have been incredibly blessed to serve alongside volunteers that understand it as well.


    Life is tough and life is hard.  Work sometimes can be an absolute beating and volunteering often brings additional stress.  You can tackle all of that, though, if you just remember to have some fun along the way!

  • October 04, 2022 11:14 AM | Dena A Culpepper (Administrator)

    The Bureau of Labor Statistics (BLS) for August reported the inflation rate was at an annualized rate of 8.3%. This figure was down from the 8.5% mark recorded in July and the 9.1% inflation rate in June, which amounted to the biggest increase in four decades. The BLS of August reports the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent on a seasonally adjusted basis after being unchanged in July 2022.

    Increases in shelter, food, and medical care indexes were the largest of many contributors to the broad-based monthly all items increase. These increases were mostly offset by a 10.6-percent decline in the gasoline index. The food index continued to rise, increasing 0.8 percent over the month as the food at home index rose 0.7 percent. The energy index fell 5.0 percent over the month as the gasoline index declined, but the electricity and natural gas indexes increased. Overall, all items index increased 8.3 percent for the 12 months ending August, a smaller figure than the 8.5 percent for the period ending July 2022 (BLS of August 2022).

    On the flip side, the Federal Reserve Bank of Atlanta, through use of Bureau of Labor statistics data covering wage growth, has developed a Wage Growth Tracking algorithm to measure overall wage growth data in the United States. Since January 2022, the overall wage growth for the year has increased from 3.8% (January 2022) to 6.7% reported in (August 2022). Data from The Atlanta Fed's Wage Growth Tracker can be found here:

    Wage Growth Tracker

    As noted in the Wage Growth tracker, Hourly wage earnings is running 6.7%. This indicates there has been significant movement by employers to adjust somewhat for the talent war, cost of living, and recent inflation rates. It also emphasizes that it has been a sellers’ market when finding a job and getting paid for it. Strategically looking at a pay budget from 5% to 7% for pay increases, adjustments, and promotions, etc. for 2023, to competitively position the company in response to the external environment really comes back to cost, intended strategy, and investing in your employees to engage them in your business.

    You now may be asking yourself, what numbers should our company be considering making decisions on pay increases for 2023? A faithful compass or barometer that should be considered to make pay increase decisions for 2023 is tracking the wage growth indicator as provided by the Federal Reserve Bank of Atlanta, and to research via the internet / survey sources what pay increase projections other companies are forecasting across the country.

    Employees across the country are feeling the effects of inflation and the pinch in Cost of Living - food costs, healthcare, electricity, new cars, natural gas, housing, utilities, entertainment, etc. For example, 4-6 months ago there was a lot of discussion of providing a gas stipend to employees to offset the high cost of gasoline that did not appear to be changing anytime soon.

    Today, gasoline prices at the pump are now down over 10.6% as the gasoline index continues to decline. Similarly, the high costs for housing and rent appear to be abating somewhat as the prime rate is increased by the Fed which affects the cost of money which leads to driving up interest rates.

    Wage-Price Spiral and Inflation

    Caroline Banton for Investopedia founded the concept of Wage-Price Spiral and Inflation, stating “the wage-price spiral is an economic term that describes the phenomenon of price increases because of higher wages. When workers receive a wage hike, they demand more goods and services and this, in turn, causes prices to rise. The wage increase effectively increases general business expenses that are passed on to the consumer as higher prices. It is essentially a perpetual loop or cycle of consistent price increases. The wage-price spiral reflects the causes and consequences of inflation”. Banton refers to this thought process as a characteristic of Keynesian economic theory.

    Company Culture is Key

    Valuing company culture, such as recognizing and incentivizing employees, will aid in attracting, retaining, and encouraging talent to weather outside environmental conditions along with ensuring you are fair and equitable with your pay. Providing a workspace where employees feel valued and find themselves in line with the company’s mission will result in further building of trust and long-standing employment. On another note, if part of your compensation / total rewards strategy includes participating in a competitive market for talent to attract and retain a high performing workforce, you might consider refreshing your pay data on at least an annual basis. For more information about compensation strategies in a time of inflation and the importance of culture in retaining employees, tune in to this Good morning, HR podcast hosted by HR entrepreneur Mike Coffey, SPHR, SHRM-SCP.


    Bob Cartwright, SPHR / SHRM-SCP

    President / CEO of Intelligent Compensation, LLC


  • August 19, 2022 12:06 PM | Dena A Culpepper (Administrator)

    This may seem like a funny thing to hear employment lawyers say, but now more than ever it is time for Human Resources to truly exhibit HeaRt.  Our capitalization and bolding of the word heart are intentional because as the great Michael Scott would say, “HR is in the word.”

    The last few years have been tough for all of us.  We have been socially isolated more than normal.  We dealt with the fear of contracting a virus that for a lengthy period was largely unknown.  We faced tough decisions about layoffs and reductions in pay.  We faced the fear of losing our jobs.  We have faced the fear of the unknown.  We dealt with unrest and tragedies throughout the country.  We went through a toxic election season.  This has not been an easy few years.

    Like or not our HR professionals have been handed the task of steadying the ship and calming the waters for their employees.  Too often, HR is viewed as the “bad guy” or the “principal’s office” and for better or worse, HR must often take on the disciplinarian role.  But it is times like this when HR professionals can demonstrate that they are more than just the disciplinarians.  They are more than just the policymakers.  They are more than just payroll and benefits.  HR can show that they are the lifeblood of a company and that they are there to serve their employees and be a source of comfort and support.

    Now is the time to open your door and be a willing listener, even if the conversation is personal in nature.  Now is the time to provide those happy moments to your staff.  Now is the time to celebrate milestones and wins. 

    No one said that being in HR is easy.  In fact, it may be one of the hardest jobs out there.  But it can just as easily be one of the most fulfilling.  So, we say to you…open your HeaRt and fill your cup.  You’ll be glad you did.

    Dustin A. Paschal

    Simon | Paschal PLLC

  • July 18, 2022 10:17 AM | Dena A Culpepper (Administrator)

    I had the benefit this past week of attending our company’s National Sales and Marketing Meeting in Kansas City and it was such an unexpected blessing! Although I have always understood the value of recognition, this week has taught me even more about how crucial showing appreciation to your people is to both your company as well as you as a leader!  

    As Gallup tells, the #1 reason most people leave their jobs is a lack of recognition. We as leaders should strive to find ways to recognize our team members frequently for both the big and small things. This week we heard not only the small and big wins of the sales and marketing teams, but more than anything, the genuine care and concern that each leader has for their people and helping them succeed. I heard about so many weddings, kid accomplishments, milestone birthdays, vacations, and memorable stores all from the leaders as they celebrated their teams on stage. It was evident that those leaders have taken the time to KNOW their people and that means more to people than anything else!

    As we think through all our roles in life – spouse, mom/dad, brother/sister, friend, employee, leader, volunteer leader, member of an association, and many others, EXPERIENCE matters more than we all take the time to realize. People in all those different roles want to be seen, known, and cared for as a person and not a number or person that is helping you succeed. When we take the time to stop and recognize someone for the behaviors we want to encourage, we will see those behaviors grow and spread. In addition, when employees or members of an association feel recognized, they stick around! Attraction and retention are harder than ever before and much of that starts with thanking our people. You would be surprised at how a simple thank you fosters an atmosphere of trust and trust leads to connection which leads to retention.

    Here are some quick and simple things you can do TODAY to begin recognizing your people better:

    • 1.     Write a simple HANDWRITTEN note to say thank you, happy birthday, happy work anniversary, etc. and snail mail it to them. I do this for our team and its amazing how many people tell me that they had never received a handwritten note from someone at work in their entire career. It’s impactful!
    • 2.     Recognize good attitudes – show them how they are a good example to others!
    • 3.     Be detailed and specific – tie your recognition to a specific behavior or accomplishment.
    • 4.     Tie it back to company or chapter values. When we recognize these key values, others will notice and be inspired to do the same.
    • 5.     Elevate it across your chapter or company. Help your people to have a sense of pride and see how they are part of a bigger vision or goal and how valuable that is!

    I hope this encourages you to be better and celebrating your people – it’s not as common as you think and SO EASY! Let’s all start today friends!

    By Holly Novak - Chief People Officer for Jack Henry and Assistant State Director - Core Leadership Areas for Texas SHRM


    This blog is sponsored by Eleserv. 

  • June 15, 2022 4:34 PM | Dena A Culpepper (Administrator)

    Time is fleeting… I was recently reminded about this at the Texas SHRM spring meeting in El Paso, when speaker Lisa Rueth shared the date 1997 and asked do you remember when, then how about 10 years later in 2007, then 10 years later in 2017 as she showed the difference in technology flip phones to touch screen. The session was about transitioning during change. We are all in transition – in fact, she shared the term “transition leaders” which I found really interesting. There is one thing we can all agree on about change, it never changes. There is always something changing ahead. How are we embracing it? How can we become a “Transitional” leader?

    She then mentioned some of the ways to develop as a transition leader…

    • Build community,
    • Keep calm and get real,
    • Talk about the elephant in the room,
    • Work from presence,
    • Have a growth mindset.

    But, what really got my attention was the “transition cycle” she shared that we all experience during change.

    Catalyst > Builder > Maintainer > Disrupter > Catalyst > Builder > Maintainer > Disrupter > Catalyst > Builder > Maintainer > Disrupter > Catalyst > Builder > Maintainer > Disrupter > Catalyst > Builder > Maintainer > Disrupter >

    It’s a continuous loop of change… When we face change, we need to find our lane or the cycle we are in and work through the transition during change. I really get getting energized in the “catalyst” stage sharing ideas with others and dreaming of the possibilities and then find myself enjoying the builder stage. I thrive in this area and always look for ways to build something that will make impact… I often get stuck in the maintainer stage even thought its comfortable, I know disruption is just ahead, which can cause a lot of pain… Rick Robinson, our LeadHRs program facilitator likes to say “there is no gain without pain”. So, it’s a good thing - right? As we go through the cycle, let’s remember that when we get to changing stages in the cycle, that change is ahead. And when we are in a good place in the cycle, change is ahead. Here are a few questions I thought about that might help us move through the cycle.

    • 1.     Catalyst Stage – This is a great time to ask “what are my goals”? “What am I currently doing to move toward my goals”? “Who are some of the people that have inspired me and what can I take away”?
    • 2.     Builder Stage – “What do I need to do to get started”? “Who are some people that can help me create, develop, and put into action”? “How can I get feedback”?
    • 3.     Maintainer Stage – “When do I know when I am in this stage”? “Is it serving me or others to be in this stage”? What are some of the things I need to think about for improvement.”? “What can change if I stay in this stage”?
    • 4.     Disrupt Stage – “Am I prepared to give up to go up? “What will this look like in the short term, and what are the opportunities in the long term? Is the big pain better in the short term, or continue with the small pain for long term”?

    In our company, we have recently implemented some new technology which is putting us in the builder stage – but it is also in the “disrupter” cycle for me. I will need to learn something new and it’s going to take some work to get there. I know there will be short term pain, but there will be a long-term gain. I remember in 2020 when I moved over to use our virtual survey technology for us to practice safe distance moving services. It was super painful to learn the technology early, but the long-term gain has been fruitful because it elevated the experience for everyone involved – most importantly our customers.

    Recently, I have been thinking about my health and exercise routine and how I might be in the maintainer stage and how I might need to disrupt the cycle to make more progress. It’s painful to change – but when we embrace change, it makes us all better. What about our Texas SHRM local chapter board meetings? How about our education and event planning? Are we focused on the member experience? What stage are we in today? Change is coming – are you ready to be a transitional leader?

    Quote of the Day: “Transition is when the old way is no longer working, but the new way is not yet known.” Lisa Rueth

    Call to Action:  What stage are you in? Share with your team members and some of the challenges you are experiencing. It might help to calm or accelerate the change ahead!

    Want to learn more about Texas SHRM? Visit our website here – and come join us!

    written by Bruce Waller, Texas SHRM, Director of Leadership Development


    This blog is sponsored by Eleserv. 

  • May 16, 2022 11:34 AM | Dena A Culpepper (Administrator)

    By Dustin Paschal

    Earlier this month, I was on the ballot in my municipality’s local school board election. I ran for an open seat, and I spent the last six to seven months campaigning. Campaigning cost me money, time from my friends and family, time away from work, and time away from my other volunteer activities. I was happy to do it, though, because I felt like I could make a difference, and I felt that this was a place I could give back. I lost. Since this was a school board election, I also lost very publicly.  

    News flash – this was not the first time I have lost. I lost an election for a student leadership position in college. I lost a moot court competition my first year in law school. 

    I lost out on several jobs coming out of law school. As a practicing attorney early in my career, I lost an election for an executive leadership position on the young lawyer board. I have lost hearings and trials. Right about now, you are probably wondering how I have any clients at all with this kind of record. 

    Well, I have had plenty of wins too. After the loss in college, I joined a different organization and ultimately became its president. After the moot court competition loss, I entered the competition the following year and made it into the Top 10 of individual speakers. I have won hearings and trials. More importantly, I have a successful law firm and in a few short months we will celebrate our nine-year anniversary.

    Losing is a fact of life. I have yet to meet anyone in my life who has not lost something. 

    In fact, after my recent election loss, two well-respected mayors told me stories about their early election losses. 

    Since we are in the middle of Mental Health Awareness month, talking about loss seems particularly important. 

    I did not and have not always lost gracefully and losing has often caused me pain. I am here to tell you; it is okay to be hurt by loss.  

    While losing is a fact of life and losing may hurt, losing is worthwhile if you learn from it and grow from it

    Losing is a lesson. To make it worthwhile, though, you must examine the loss and determine what the lesson is.

    Did you take the wrong approach?
    Did you make mistakes along the way?
    Were you ready for the challenge?
    Are you in the wrong career/industry/volunteer organization?
    Did you have the right people around you?
    Can you make a bigger difference somewhere else or by doing something else?
    Is this the right time?

    Losing does not always mean that you did something wrong or made the wrong choices. Sometimes, there are circumstances beyond your control and factors at play that are outcome determinative. It is important to acknowledge that and accept that. Sometimes, losing is a gentle nudge to push you in another direction or to encourage you to chase that dream.

    It is just as important, though, to determine where you did make mistakes so that you can correct those moving forward. 

    As Frank Sonnenberg says, “Practice doesn’t make perfect if you’re doing it wrong.”

    It is also critical that you do not let the loss define you and that you do not get mired in the pain. I have always found that I am more driven and more motivated after a loss. After the initial pain, there is a fire in my belly to achieve. I encourage you to use your loss as kindling to light your own fire.

    Losing can make you stronger and more resilient. 

    Losing can make you a better person. 

    As odd as it sounds, I hope that I never stop losing and I hope you feel the same about your life.

    This blog is sponsored by Eleserv. 

  • May 02, 2022 11:35 AM | Dena A Culpepper (Administrator)

    By Holly Novak

    We’ve endured numerous hardships since early 2020, and I imagine everyone would say their mental health has been impacted, whether minor feelings of being down all the way to severe depression, anxiety and other mental health impacts. May is Mental Health Awareness Month, and I had the pleasure of interviewing Nataly Kogan this past week who is the author of a wonderful book titled The Awesome Human Project – Break Free from Daily Burnout, Struggle Less, and Thrive More in Work and Life. One of the most powerful statements that Nataly shares is that “you can’t give what you don’t have.” As a recovering perfectionist and extreme extrovert, I have spent most of my life looking for ways to please those around me and assure that I am exceeding all expectations at work, home, church, and with my friends. Over time, I have realized that finding that work life balance is an impossible task, and that if I don’t stop and take the time to care for myself, I cannot care well for those around me.

    I have discovered that there is no true “work life balance”. Work is a subset of life, not separate from it- especially since many of us work where we live and live where we work! We integrate our work into our hobbies, family and friends, and our life. Just as we integrate work into our lives, we also must integrate self-care and give ourselves permission to step away and find ways to refresh and find ways to increase our mental, physical, and emotional energy. Nataly also says that “Self-care isn’t selfish. It’s your responsibility to yourself, your work, the people you care about and your community.”

    There’s a lot of amazing tips out there (check out Nataly’s book), but here are some things that I have learned personally as I work through my own journey towards self-care and balance. First, I have to have music while I am working. No clue why, but it helps my brain and reduces stress and anxiety throughout the day. Second, I do my hard things at the beginning of the day while my brain is still fresh and save the easy things like email for when my low time comes around 2 or 3 in the afternoon. I also get up and walk away from my desk at least once an hour to give my eyes and brain a rest, and I try to walk outside if possible. Exercise is key for me, and I have to get in a good workout at least 3-4 times a week and eat healthy which helps with my stress level and also helps me to think clearly. Finally, I have learned to give myself a break. None of us are perfect - we fail, we say the wrong things, we talk before thinking fully, we send an email to the wrong person, and we forget things! Although it’s not always easy, I have learned to give myself grace and know that I am enough and so are you!

    The last thing I will leave you with today is the encouragement to ask others for help when you feel overwhelmed. Don’t let stress and anxiety stand in the way of your health and happiness – life is too short! Asking for help is not a sign of weakness, it takes courage and vulnerability and is a clear sign of strength. I hope you join me on this journey to health, happiness and balance! 

  • April 18, 2022 10:14 AM | Dena A Culpepper (Administrator)

    Before the coronavirus chaos, the future of work was already expected to move toward telecommuting. Clearly, the COVID-19 pandemic forced people and businesses to adapt to remote working—whether they were ready for it or not. It forced us to some things that we have always considered, but just not motivated enough to make the change.

    I’ve heard it said the pandemic has acted as a reset button for organizations, showing that we can easily work from home, which will completely change the future of work in a variety of ways. Indeed, the era of everyone working full-time in centralized workspaces appears to be gone for good. According to many pundits and prognosticators, organizations will need to offer a hybrid mix of in-office and remote work—or a fully remote workforce in order to compete for tomorrow’s talent.

    Granted WFH has been working, but work from home as made popular by the pandemic may not translate easily to a new hybrid mix of on-site and remote working. Here are some things to consider, even if your teams are in the office now:

    • A plan to pivot to remote work as needed
    • A work-from home policy more flexible than anything offered in the past


    I can think of three good reasons.

    1)  Without a strategy for managing and retaining remote employees, your company is at risk. Planning for remote operations is a key part of overall preparedness.  From disease to disasters, many situations make remote work a necessity for days, weeks or as in the case of COVID19—two years. When disaster strikes, a quick and easy transition to remote work can minimize business interruptions and reduce employee stress. Success comes to those companies intentional about creating a work-from-home culture that they can deploy on short notice. Being prepared can help organizations avoid chaos and maintain productivity no matter where their employees are doing their jobs.

    2) Expect candidates to ask about flexible work options for their own needs and to assess how prepared your organization is to pivot in a crisis. A clear plan for transitioning to remote work is a plus in the eyes of job seekers. They don’t want to worry about how you’ll handle the next crisis.

    3) Even when they’re back in the office, employees with experience working remotely may expect more leeway to use technology to accommodate their personal schedules. And, employers that offer such flexibility are in a better position to retain talent.

    Accepting fully remote or hybrid work as the new norm requires a mindset shift on the part of managers and leaders. And, it requires structure, accountability and connection in order to succeed.

    The foundation of a successful remote work policy is built on three elements:

    1. Structure
    2. Accountability
    3. Connectedness

    They’re interrelated, but each plays its own role in supporting remote employees, maintaining innovation and making work from home a success.


    Each organization has its own level of need for structure, and perhaps surprisingly, each generation of workers needs different levels of structure to stay productive and creative.

    Multiple studies and surveys have found that Generation Z workers and younger millennials do best with a more structured WFH environment. Structure can also help new hires and young workers build their network at work, something that’s more difficult without face time in the office.

    No matter what age your workforce is, some level of structure is necessary to keep ideas flowing and interpersonal connections growing within your organization.

    Not only do your employee teams need structure, but your leaders need it as well. The goals should be to:

    • Stay connected within and across teams and organization levels.
    • Maintain an open pipeline for sharing ideas and building connections.
    • Help everyone to stay focused and innovative while balancing home responsibilities.

    Much of your structure, in practice, will likely depend on how well your managers implement your plans and make themselves available for their team while they’re out of the office.


    As you think about the best way to manage future changeovers to remote work or optimize your current work-from-home operations:

    • Make sure your managers understand the unique requirements of managing remote employees.
    • Ensure they’re accessible to employees on their teams on an established schedule.
    • Discourage micromanaging, which can reduce employee productivity and morale.

    The goal is to provide structure through regular check-ins, support productivity and foster the sense of connectedness that can be a real challenge for workers at home.


    Employees who work from home may still feel connected to their co-workers because they know how to get in touch with their teammates and, one would hope, their managers. However, feeling connected to headquarters, the C-suite and the overall organization can be much more challenging.

    That’s a problem, because when employees don’t feel connected to their employer, they often stop innovating and sharing new ideas – just at a time when companies need to be at their most innovative.

    The new normal is now

    A remote work policy that implements the structure, accountability and communication changes that support optimal remote work and innovation, will make it easier and more successful to transition to the future of work. Because, the future of work is now.
  • March 04, 2022 9:27 AM | Dena A Culpepper (Administrator)

    By Jimmy Taylor 

    After two years of non-stop impact from living pandemic lives, it’s no surprise to hear employees are stressed. A Gallup poll found U.S. workers are among the most stressed in the world, with 57% of our teams reporting they face stress, worry, sadness and anger on the job on a daily basis.

    In fact, stress in the workplace is now so bad even employee assistance program usage is going up. EAP programs have traditionally been one of the most underutilized company benefits offered. Hartford Insurance reports 70% of employers are seeing an uptick in their EAP usage.

    Companies are trying to respond to this employee need. Towers Watson says 86% of employers surveyed indicate helping employees deal with mental health, stress and burnout is a top priority for their organization this year.

    As HR professionals, we see the impact of stress on our teams every day. It motivates us to press on and find ways to help our organizations thrive while still meeting the needs of our people. Those sometimes competing priorities are taking their toll, HR professionals are not immune to the stress of the workplace. A Paychex study showed 70% of HR leaders say this has been the most challenging time in their career.

    What can we do to cope? How can we help our people deal with the stressors?

    There is no magic answer. Workloads will stay elevated. The pace of change will continue to increase. The labor shortage and great resignation will be our constant companions for the coming years. However, we can do simple things that will help.

    Take care of yourself! We can’t effectively help our teams if we fail to address our own needs. The EAP hotline number that we pass out to our employees will answer our calls as well.

    Stay connected. One of the many values of a local SHRM chapter is the camaraderie and support we get from our peers. An African proverb says it well – “If you want to go fast, go alone. If you want to go far, go with others!” We need the interaction, encouragement, and wisdom from fellow practitioners now, more than ever. Make the time to get out and connect, you will see a difference!

    Celebrate the wins. Stopping to celebrate accomplishments, both big and small, is crucial. Stressed individuals are less likely to celebrate accomplishments than others. When we think about and talk about what’s going well our brain rewards us with a shot of dopamine – an important “feel good” chemical. That dopamine serves as a neurotransmitter, sending signals to other neurons that things are good, and all is well. Not only is this good for our body, but it is also an important chemical needed by our brains for hard tasks like creative thinking and problem solving. Being conscious about celebrating interrupts negative spirals of stress and depression.

    Say thank-you! When we are busy and stressed it is hard to take the time to say “thanks”. But physicians and psychologist have endless studies on the positive impact consciously counting our blessings has on our both our mental and physical well-being. It causes us to be more optimistic, enjoy better relationships, sleep better, feel less stress…the list goes on and on.

    Even a simple act of regularly writing down two our three things we are thankful for just before we go to bed in a “gratitude journal” will have a positive and transformative effect.

    What’s more – in this turnover heavy world some have labeled “The Great Resignation” – the simple act of saying thank you may be a key to better employee performance and retention. A recent study of front line health care workers (a group that is facing massive burn-out from the pandemic) published in the Journal of Applied Psychology found some amazing results. The workers who received regular appreciation and gratitude from their patients and their bosses:

    • Were significantly more energized on the job and performed better
    • Were less likely to leave the job
    • Improved their family life by making them better spouses/partners.

    In short, the researchers found small acts of gratitude pay shockingly large dividends for people in the workplace and beyond!

    It’s a stress filled world of work we enter every day. As HR professionals we can make it better!

  • February 15, 2022 9:57 AM | Dena A Culpepper (Administrator)

    The stakes are higher today than they have ever been before regarding executive compensation and the scrutiny imposed by the federal and state governments and the national news media. Negative media reaction and public outcry in cases of executive compensation packages viewed as excessive, regardless as to whether they really are, has set the stage for government regulators, the Internal Revenue Service and State Attorney General Offices to investigate, audit and suppress abuses. As a result of their findings, more federal and state statutes and regulations concerning not-for- profit executive compensation is being enacted.

    Actions taken by State Legislatures and Attorney General Offices in various states, like New Jersey and New York, to limit executive compensation and media reported investigations of not-for-profit organizations to rein in suspected abusive executive compensation practices are acting as a stimulus for even more government regulation. As a result, this is causing many not-for-profit boards across the country to examine their board governance strategies and practices concerning executive compensation and how they will pay their top people in the future.

    So, who oversees and regulates who?

    Many tax-exempt nonprofit organizations such as 501(c)(3) charitable organizations which may include certain foundations, 501(c)(4) Quasi-governmental organizations, 501(c)(14) State Chartered Credit Unions and 501(c)(6) Business and Trade Associations, are:

    · Required to file an annual tax information return – Form 990 or 990EZ depending on the size of the organization

    · Subject to Section 4958 of the Internal Revenue Code regarding Intermediate Sanctions - except for 501(c)(6) Business and Trade Associations and Private Foundations.

    · Subject to Private Inurement requirements

    · Subject to impermissible private benefit transaction rules

    · Under IRS scrutiny for 457 Deferred Compensation Plans

    · Under IRS scrutiny for excessive and unreasonable executive compensation practices

    When reviewing not-for-profit executive compensation, what positions are potentially under scrutiny? Depending on who is scrutinizing whom, the compensation of officers, directors, trustees, key employees, and the highest compensated employees and independent contractors rise to the top of the list.

    Officers typically would include Chief Executive Officers, Presidents, Executive Directors, Sr. Pastors, Chief Operating Officers, Chief Financial Officers and Vice Presidents and/or Key Leadership Employees who have responsibilities like an officer when managing a significant segment or activity for the organization.

    Directors and former directors paid for their serves on the Board are also included. Based on Internal Revenue Service guidelines, compensation paid more than $10,000 per year could put a board director or trustee under the microscope.

    Highly compensated employees can also be on the list when their total compensation exceeds $150,000 as a Key Employee or when one of the top five highest compensated employees other than executives / officers are earning more than $100,000.

    Over the last few years, the Internal Revenue Service has added additional staff to increase its efforts to audit and investigate tax exempt not-for-profit organizations as it looks for excessive and abusive executive compensation practices and programs. And as stated earlier, state legislators, regulators and Attorney Generals have been continually active imposing rules and regulations on the compensation of leaders, directors, trustees and the highly compensated.

    If you are on the Board for a tax-exempt nonprofit organization, you must be concerned about personal liability for participating in approving compensation actions deemed excessive by IRS. Under section 4958 of the Internal Revenue code, the code imposes “Intermediate Sanctions” in the form of excise taxes on “disqualified persons” which include officers, senior leaders, highly compensated, etc. whose organization engages in impermissible and excessive benefit transactions on behalf of them. Section 4958 also penalizes board directors and trustees who knowingly approve excess compensation and/or impermissible benefit transactions. However, please note that (501(c)(6) Business and Trade Associations and Private Foundations are not subject currently to Section 4958 of the IRS code but are subject to Private Inurement Requirements and Excess Benefit Transaction findings. As a result, board directors and trustees of business and trade associations are not personally penalized for knowingly approving excessive compensation and /or impermissible benefit transactions but beware that the (501(c)(6) Business and Trade Associations are still investigated and held liable for excessive compensation and benefits.

    As defined, an impermissible excessive benefit transaction is one in which the economic benefit provided directly or indirectly to a disqualified person exceeds the value received by the organization, including the value from the performance of services. This includes the payment of excessive compensation or an impermissible benefit transaction that is deemed unreasonable.

    Potential penalties for participating in such actions can include:

    • Being personally liable for returning the value of the excess compensation or benefits back to the organization
    • Paying an excise tax of either:
    • 25% of the value of the excessive benefit if returned prior to receiving a deficiency notice from the IRS
    • 200% of the value of the excessive benefit if the benefit or compensation is returned after receiving the IRS deficiency notice

    · Board Director or Trustee liability for approval of an excessive compensation and

    /or benefit transaction:

    • Assessment of a 10% tax on the Director or Trustee who knowingly approves an excessive benefit transaction
    • Liability under section 4958(a)(2) is joint and several and capped at $20,000 per transaction
    • Revocation - Loss of Tax Exemption

    So, what compensation components and economic benefits should be considered to

    determine whether a person’s compensation is reasonable?

    • Base salary
    • Fees
    • Incentive compensation and bonuses – short-term and long-term
    • Retirement benefits
    • Nonqualified deferred compensation plans
    • Supplemental Executive Retirement Plans
    • Health and welfare benefits – medical, dental, life insurance, short-term / long-term disability
    • Other employee benefits – Paid Time Off - where there is a cash value opportunity for cash in or paid at the time of retirement or termination
    • Taxable and nontaxable fringe benefits, except fringe benefits described in section 132 of the tax code
    • Executive benefits and perquisites
    • Expense allowances or reimbursements
    • Housing allowance or residence for personal use
    • Below market loans
    • Foregone interest on loans
    • Moving and relocation expenses
    • Payment of liability and indemnification insurance premiums
    • Severance payments

    In determining whether compensation is reasonable, what factors have been considered by courts and other regulatory agencies?

    • The employer’s compensation philosophy and policy for employees and leaders
    • Comparing compensation for like industries, like business segments, and like employers
    • Utilization of reputable compensation and benefits survey sources and compensation experts to determine the reasonable value of the compensation paid and to be paid and which is sufficient to satisfy the fiduciary responsibility of the governing body to conduct appropriate due diligence. Survey sources may include both taxable and tax-exempt organizations to allow comparisons to similar positions at similarly situated organizations. It is also important to know that when the organization’s staff performs the analysis for the Board on behalf of those executives in the organization that they report to, the organization and the Board run the risk of conflict of interest in discerning executive compensation.
    • This in effect could negate certain government protections – (i.e., The Rebuttable Presumption of Reasonableness) that is created for the Board by performing and executing the due diligence necessary to perform its governance and fiduciary responsibilities.
    • Scope, size, financial position, geographic location and complexity of the

    employer’s business / organization

    • Industry categories (NAICS and SIC Codes) of the employer and like employers
    • Actual written job and compensation offers from similar organizations competing for executive talent
    • The nature of the work being performed and the employee’s qualifications
    • The performance of the employee/executive and the business / operational performance of the organization
    • General economic conditions at the time total compensation are awarded or changed

    When is compensation viewed as reasonable? The fair market value of economic benefits received for the performance of services is considered reasonable compensation, which is the value that would ordinarily be paid for like services by a like enterprise under like circumstances.

    As a Board Director, Church Elder, Trustee, or CEO of a tax-exempt organization, why would you want to consider creating a Rebuttable Presumption of Reasonableness for your organization and will it protect your organization from governmental scrutiny?

    An important governance strategy exists that every organization subject to intermediate sanctions and/or tax-exempt regulatory compliance regarding executive compensation should consider. This strategy is called the Rebuttable Presumption of Reasonableness.

    The basis for creating a “rebuttable presumption” can be found at 26 CFR 53.4958-6 - Rebuttable presumption that a transaction is not an excess benefit transaction.

    In determining the reasonableness of compensation under the Rebuttable Presumption of Reasonableness, compensation is presumed to be reasonable, and a property transfer is presumed to be at fair market value when three requirements for establishing the rebuttable presumption are met. They are:

    1. The compensation arrangement must be approved in advance by an authorized governing body of the applicable tax-exempt organization, which is composed of individuals who do not have a conflict of interest concerning the transaction

    2. Prior to making its determination, the authorized governing body obtained and relied upon appropriate compensation and benefit survey data as to comparability of compensation paid

    3. The authorized governing body adequately and timely documented the basis for its determination for the compensation decisions concurrently with making that determination.

    The documentation of the authorized body should include the terms of the transaction and the date of its approval, the members of the authorized body present during the debate and their vote on the transaction, the comparability data obtained and relied upon, the actions of any members of the authorized body having a conflict of interest, and documentation to support the basis for the determination.

    When done correctly, the Rebuttable Presumption of Reasonableness shifts the burden of proof between the tax-exempt, not-for-profit organization’s governing body and the Internal Revenue Service concerning executive compensation.

    The Internal Revenue Service may refute the presumption of reasonableness only if it develops sufficient contrary evidence to rebut the probative value of the comparability data relied upon by the authorized body. As a result, the practice of creating one lends itself to an excellent governance strategy to follow even if it may not directly affect regulatory compliance of your organization.

    How do we avoid excessive executive compensation and what are some effective business strategies and best practices to follow?

    To ensure that your executive compensation decisions will stand up to the scrutiny of government regulators and agencies, media, and others, you may want to consider adopting some of the following strategies and best practices.

    • Make executive compensation transactions a priority in board / trustee governance meetings
    • Use caution when entering transactions with highly compensated employees and disqualified persons – CEO, Sr. Pastors, Pastor, CFO, COO, President, Executive Director, Vice Presidents, Etc. Be sure to conduct the appropriate due diligence in reviewing market survey data or in hiring a compensation consulting expert to assist in making informed total compensation recommendations and decisions
    • Use the Rebuttable Presumption of Reasonableness procedures to shift the burden of proof to the IRS – Government Agency – Attorney General. This is a tax-exempt accepted practice provided by the Federal Government which could provide your organization with added fire power in the event of an audit or regulatory review.
    • Establish a Board Compensation or HR Committee to create a dedicated review of your compensation actions with members who understand the components of a total compensation strategy and package.
    • Create a customized executive compensation philosophy and policy for the organization. Failure to do so could cause major cost problems that need not occur.
    • Use appropriate and relevant comparable compensation and benefit survey data to conduct a total compensation review for the executive team and highly compensated.
    • Adopt a comprehensive Conflicts of Interest Policy to help protect directors, trustees and officers from liability.
    • Adopt a Travel and Expense Reimbursement Policy for all employees and leaders.
    • Use an independent consultant to determine fair market rates for total compensation and benefits. By contracting with a reasoned third-party compensation consulting firm, this will help to ensure impartiality and to avoid any opportunity for a conflict of interest by utilizing in-house sources who report up through organization officers and leadership.
    • Board compensation, if any, should also be reviewed by outside third-party advisors.
    • Be sure to adequately and thoroughly document the basis for any executive or highly compensated compensation transactions and governing body decisions on compensation actions. This would include terms of the approved compensation transaction, date of approval, board/trustee/committee minutes, a thorough description of the expert report on comparability data used to make the decisions including who or how the data was obtained.

    Whether the Board, Trustees, Elders, Leadership, or HR/Compensation Committee is overseeing the due diligence process of annually reviewing the compensation of the organization’s leadership and highly compensated, in the end, it is the board/trustees/elders that carry the legal burden associated with improper compensation. To maintain not-for-profit tax-exempt status and avoid tax penalties, it is incumbent upon the governing body to ensure that leaders and board members (as applicable) are paid fair and reasonable compensation.

    Good governance does not have to be difficult to ensure the payment of fair and reasonable compensation and to satisfy regulatory compliance. However, Board Directors, Trustees, Elders and CEOs / Sr. Pastors must be thoughtful, open to successful board governance strategies and best practices, transparent and consistent in the application of sound and reasonable executive compensation programs to ensure compliance success.

    About the Author:

    Bob Cartwright, SPHR / SHRM-SCP, is founder, president, and chief executive officer of Intelligent Compensation, LLC, a compensation and business management consulting firm located in the greater Austin, Texas area. Since 1996, Mr. Cartwright has managed numerous assignments for a wide variety of clients including those in high technology, manufacturing, services, information technology, health care, retail, construction / facility management, telecommunications, legal, energy, media, publishing, non- profits, public entities, municipalities, financial services, oil and gas, real estate, and aerospace / defense. He has 30+ years of diversified experience in compensation, human resources and business management which includes the development of total compensation strategies, wage and salary plans, executive compensation strategies and studies, incentive compensation plans, and performance management systems.

    Mr. Cartwright’s professional affiliations include Advisor to the State Director / Business Development – Texas Society for Human Resource Management State Council (Texas SHRM); Past Board Chair, Texas Association of Business; SHRM National volunteer; Past Member of the Total Rewards, Compensation, & Benefits National Expertise Panel and National Volunteer Leader on Veteran Employment –Society for Human Resource Management (SHRM). He is also a sought-after speaker and is often quoted as a business / compensation expert in newspapers and print media around the country.

    Intelligent Compensation, LLC specializes in conducting executive compensation reviews, audits, and studies for Leadership and Boards of Directors for Nonprofit - Tax-exempt organizations across the U.S. Organizations served include 501(c)(3) Charitable organizations, Churches, State Credit Unions, and Private Foundations; 501(c)(6) Business, Professional, and Trade Associations, Bureaus, Chambers of Commerce, and Quasi-Governmental Entities and Authorities; and 501(c)(1) Federal Credit Unions. Intelligent Compensation also provides services to For-Profit companies in most every industry and our analysts and consultants provide our clients with over 35 years of experience in creating personalized business strategies, practical ideas, and customized business solutions to organizations who want to maximize their operational performance and organizational effectiveness through strategically aligned, performance-based compensation programs, and sound compensation and business management practices.

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