Krehn Solutions

The Affordable Care Act (Obamacare) Explained

Category: News
Published on Monday, 08 September 2014
Written by Raymond Krehn

Before I begin, I will state that the following article is a completely unbiased and is a shortened version of the actual act itself. What people call "Obamacare" is actually the Patient Protection and Affordable Care Act (abbreviated to PPACA or ACA). However, people started calling it "Obamacare" before all the rules were even applied. It's a term that was, at first, mostly used by people who didn't like the PPACA, and it's become popularized in part because PPACA is a really long and awkward name, even when you turn it into an acronym like that. Barack Obama has since said that he actually likes the term "Obamacare" because, he says, "I do care".

The PPACA made a bunch of new rules regarding health care, with the purpose of making health care more affordable for everyone. Opponents of the PPACA, on the other hand, feel that the rules it makes take away too many freedoms and force people (both individuals and businesses) to do things they shouldn't have to.

So what does it do? Below is everything, in the order of when it goes into effect (because some of it happens later than other parts of it) along with citations to that actual document itself.

(Note: Page numbers listed in citations are the page numbers within the PDF, not the page numbers of the document itself)

Already in effect:

  • It allows the Food and Drug Administration to approve more generic drugs (making for more competition in the market to drive down prices) ( Citation: An entire section of the bill, called Title VII, is devoted to this, starting on page 766)
  • It increases the rebates on drugs people get through Medicare (so drugs cost less) (Citation: Page 235, sec. 2501)
  •  It establishes a non-profit group, that the government doesn't directly control, PCORI, to study different kinds of treatments to see what works better and is the best use of money. (Citation: Page 684, sec. 1181)
  • It makes chain restaurants like McDonalds display how many calories are in all of their foods, so people can have an easier time making choices to eat healthy. (Citation: Page 518, sec. 4205)
  • It makes a "high-risk pool" for people with pre-existing conditions. Basically, this is a way to slowly ease into getting rid of "pre-existing conditions" altogether. For now, people who already have health issues that would be considered "pre-existing conditions" can still get insurance, but at different rates than people without them. (Citation: Page 49, sec. 1101, Page 64, sec. 2704, and Page 65, sec. 2702)
  • It forbids insurance companies from discriminating based on a disability, or because they were the victim of domestic abuse in the past (yes, insurers really did deny coverage for that) (Citation: Page 66, sec. 2705)
  • It renews some old policies, and calls for the appointment of various positions.
  • It creates a new 10% tax on indoor tanning booths. (Citation: Page 942, sec. 5000B)
  • It says that health insurance companies can no longer tell customers that they won't get any more coverage because they have hit a "lifetime limit". Basically, if someone has paid for health insurance, that company can't tell that person that he's used that insurance too much throughout his life so they won't cover him any more. They can't do this for lifetime spending, and they're limited in how much they can do this for yearly spending. (Citation: Page 33, sec. 2711)
  • Kids can continue to be covered by their parents' health insurance until they're 26. (Citation: Page 34, sec. 2714)
  • No more "pre-existing conditions" for kids under the age of 19. (Citation: Page 64, sec. 2704 and Page 76, sec. 1255)
  • Insurers have less ability to change the amount customers have to pay for their plans. (Citation: Page 47, sec. 2794)
  • People in the "Medicare Part D Coverage Gap" (also referred to as the "Donut Hole") get a rebate to make up for the extra money they would otherwise have to spend. (Citation: Page 398, sec. 3301)
  • Insurers can't just drop customers once they get sick. (Citation: Page 33, sec. 2712)
  • Insurers have to tell customers what they're spending money on. (Instead of just "administrative fee", they have to be more specific).
  • Insurers need to have an appeals process for when they turn down a claim, so customers have some manner of recourse *other* than a lawsuit when they're turned down. (Citation: Page 42, sec. 2719)
  • Anti-fraud funding is increased and new ways to stop fraud are created. (Citation: Page 718, sec. 6402)
  • Medicare extends to smaller hospitals. (Citation: Starting on page 363, the entire section "Part II" seems to deal with this)
  • Medicare patients with chronic illnesses must be monitored more thoroughly.
  • Reduces the costs for some companies that handle benefits for the elderly. (Citation: Page 511, sec. 4202)
  • A new website is made to give people insurance and health information:  http://www.healthcare.gov (Citation: Page 55, sec. 1103)
  • A credit program is made that will make it easier for business to invest in new ways to treat illness by paying half the cost of the investment. (Note - this program was temporary. It already ended) (Citation: Page 849, sec. 9023)
  • A limit is placed on just how much of a percentage of the money an insurer makes can be profit, to make sure they're not price-gouging customers. (Citation: Page 41, sec. 1101)
  • A limit is placed on what type of insurance accounts can be used to pay for over-the-counter drugs without a prescription. Basically, your insurer isn't paying for the Aspirin you bought for that hangover. (Citation: Page 819, sec. 9003)
  • Employers need to list the benefits they provided to employees on their tax forms. (Citation: Page 819, sec. 9002)
  • Any new health plans must provide preventive care (mammograms, colonoscopies, etc.) without requiring any sort of co-pay or charge. (Citation: Page 33, sec. 2713)
  • If you make over $200,000 a year, your taxes go up a tiny bit (0.9%). To address those who take issue with the word "tiny", a change of 0.9% is relatively tiny. Any look at how taxes have fluctuated over the years will reveal that a change of less than one percent is miniscule, especially when we're talking about people in the top 5% of earners. (Citation: Page 837, sec. 9015)
  • No more "pre-existing conditions". At all. People will be charged the same regardless of their medical history. (Citation: Page 64, sec. 2704, Page 65, sec. 2701, and Page 76, sec. 1255)

 

The most-discussed items:

If you can afford insurance but do not get it, you will be charged a fee. This is the "mandate" that people are talking about. Basically, it's a trade-off for the "pre-existing conditions" bit, saying that since insurers now have to cover you regardless of what you have, you can't just wait to buy insurance until you get sick. Otherwise no one would buy insurance until they needed it. You can opt not to get insurance, but you'll have to pay the fee instead, unless of course you're not buying insurance because you just can't afford it. (Note: On 6/28/12, the Supreme Court ruled that this is Constitutional, as long as it's considered a tax on the uninsured and not a penalty for not buying insurance... nitpicking about wording, mostly, but the long and short of it is, it looks like this is accepted by the courts) (Citation: Page 164, sec. 5000A, and here is the actual court ruling.)

Question: What determines whether or not I can afford the mandate? Will I be forced to pay for insurance I can't afford?

Answer: There are all kinds of checks in place to keep you from getting screwed. Kaiser actually has a webpage with a pretty good rundown on it, if you're worried about it. You can see it here.

Okay, have we got that settled? Okay, moving on...

  • Medicaid can now be used by everyone up to 133% of the poverty line (basically, a lot more poor people can get insurance) (Citation: Page 198, sec. 2001) (Note: The recent court ruling says that states can opt out of this and that the Federal government cannot penalize them by withholding Medicaid funding, but as far as I can tell, nothing is stopping the Federal government from simply just offering incentives to those who do opt to do it, instead)
  • Small businesses get some tax credits for two years. (It looks like this is specifically for businesses with 25 or fewer employees) (Citation: Page 157, sec. 1421)
  • Businesses with over 50 employees must offer health insurance to full-time employees, or pay a penalty. (Citation: Page 174, sec. 4980H)

Question: Can't businesses just fire employees or make them work part-time to get around this requirement? Also, what about businesses with multiple locations?

Answer: Yes and no. Switching to part-time only won't help to get out of the requirement, as the Affordable Care Act counts the hours worked, not the number of full-time employees you have. If your employees worked an equivalent of 50 full-time employees' hours, the requirement kicks in. Really, the only plausible way a business could reasonably utilize this strategy is if they currently operate with just over the 50-employee number, and could still operate with under 50 employees, and have no intention to expand. Also, regarding the questions about multiple locations, this legal website analyzed the law and claims that multiple locations in one chain all count as a part of the same business (meaning employers like Wal-Mart can't get around this by being under 50 employees in one store - they'd have to be under that for the entire chain, which just isn't happening). Independently-owned franchises are different, however, as they have a separate owner and as such aren't included under the same net as the parent company. However, any individual franchise with over 50 employees will have to meet the requirement.

Having said that, the ACA only requires employers to offer insurance to full-time employees, so theoretically they could get out of this by reducing all employees to 29 hours or fewer a week. However, if any employees' hours go above that, their employer will have to provide insurance or pay the penalty. And also, this is putting aside how an employer only offering part-time work with no insurance will affect how competitive they are on the job market, especially when small businesses with 25 or fewer employees actually get that aforementioned tax credit to help pay for insurance if they choose to get it (though they are not required to provide insurance).

  •  Insurers now can't do annual spending caps. Their customers can get as much health care in a given year as they need. (Citation: Page 33, sec. 2711)
  • Limits how high of an annual deductible insurers can charge customers. (Citation: Page 81, sec. 1302)
  • Health insurance cannot discriminate against women on pricing or plan availability (Citation: Page 185, sec. 1557)
  • Reduce costs for some Medicare spending, which in turn are put right back into Medicare to increase its solvency. Most notably, this bill reduces the amount that Medicare Advantage pays to be more in line with other areas of Medicare (Citation: Page 384, Sec. 3201 and Page 389, Sec. 3202), and reduces the growth of Medicare payments in the future (Citation: Page 426, Sec. 3402). The non-partisan Congressional Budget Office estimates that between 2012 and 2022, this will amount to $716 Billion in reduced spending (Citation: CBO Estimate). Also being cut is $22 Billion from the Medicare Improvement Fund, most likely because the PPACA does a lot of the same stuff, so that spending would be redundant (Citation: Page 361, Sec. 3112).
  • Place a $2500 limit on tax-free spending on FSAs (accounts for medical spending). Basically, people using these accounts now have to pay taxes on any money over $2500 they put into them. (Citation: Page 820, sec. 9005)
  • Establish health insurance exchanges and rebates for the lower and middle-class, basically making it so they have an easier time getting affordable medical coverage. (Citation: Page 107, sec. 1311)
  • Congress and Congressional staff will only be offered the same insurance offered to people in the insurance exchanges, rather than Federal Insurance. Basically, we won't be footing their health care bills any more than any other American citizen. (Citation: Page 100, sec. 1312)
  • A new tax on pharmaceutical companies.
  • A new tax on the purchase of medical devices.
  • A new tax on insurance companies based on their market share. Basically, the more of the market they control, the more they'll get taxed.
  • Raises the bar for how much your medical expenses must cost before you can start deducting them from your taxes.

Future Effects:

Taking effect in January, 2015:

Doctors' pay will be determined by the quality of their care, not how many people they treat. The nationalized accreditation and quality monitoring groups such as CMS and The Joint Commission already know how well hospitals are doing regarding established patient safety measures. What's next is the providers. Already, mandatory reporting regarding provider outcomes is beginning. For example, Dr. Johnson, who is a Surgeon, will have to report his average operative time for a cholecystectomy and his post-operative wound infection rate. If he falls below a certain percentile nationally, his reimbursement will be negatively affected. If he is in say, the top 10% nationally, he will receive a small bonus.

How this will work for primary care is a little murkier. The general consensus seems to be that they will try to reimburse based on a similar set of nationally defined "quality measures" like they are using for hospital accreditation, Medicare center status, etc. For example, is Dr. Smith keeping his patient's HbA1C below 7.0%? (An indication of good long-term diabetes control). Is he keeping his patient's LDL less than 100? So on and so forth.

Taking effect in January, 2017:

If any state can come up with their own plan, one which gives citizens the same level of care at the same price as the PPACA, they can ask the Secretary of Health and Human Resources for permission to do their plan instead of the PPACA. So if they can get the same results without, say, the mandate, they can be allowed to do so. Vermont, for example, has expressed a desire to just go straight to single-payer (in simple terms, everyone is covered, and medical expenses are paid by taxpayers). (Citation: Page 117, sec. 1332)

Taking effect in January, 2018:

  • All health care plans must now cover preventive care (not just the new ones).
  • A new tax on "Cadillac" health care plans (more expensive plans for rich people who want fancier coverage). (Citation: Page 812, Sec. 9001)

 

Taking effect in January, 2020:

The elimination of the "Medicare gap"

Additional information:

The biggest thing opponents of the bill have against it is the mandate. They claim that it forces people to buy insurance, and forcing people to buy something is unconstitutional. The counter argument is that it's not telling people to buy a specific thing, just to have a specific type of thing, just like a part of the money we pay in taxes pays for the police and firemen who protect us, this would have us paying to ensure doctors can treat us for illness and injury.

Plus, as previously mentioned, it's necessary if you're doing away with "pre-existing conditions" because otherwise no one would get insurance until they needed to use it, which defeats the purpose of insurance.

Of course, because so many people are arguing about it, and some of the people arguing about it don't really care whether or not what they're saying is true, there are a lot of things people think the bill does that just aren't true. Here's a few of them:

Clarifying Misconceptions:

Obamacare has death panels! No part of the bill says anything about appointing people to decide whether or not someone dies. The decision over whether or not your claim is approved is still in the hands of your insurer. However, now there's an appeals process so if your claim gets turned down, you can challenge that. And the government watches that appeals process to make sure it's not being unfair to customers. So if anything the PPACA is trying to stop the death panels. (Citation: Page 42, sec. 2719)

What about the Independent Medicare Advisory Board? Death Panels! The Independent Medicare Advisory Board (which has had its name changed to Independent Payment Advisory Board, or IPAB) is intended to give recommendations on how to save Medicare costs per person, deliver more efficient and effective care, improve access to services, and eliminate waste. However, they have no real power. They put together a recommendation to put before Congress, and Congress votes on it, and the President has power to veto it. What's more, they are specifically told that their recommendation will not ration health care, raise premiums or co-pays, restrict benefits, or restrict eligibility. In other words, they need to find ways to save money without reducing care for patients. So no death panels. In any sense of the term.  (Citation: Page 426, sec. 3403)

Obamacare has health care rationing! "Rationing" is just a fancier way of saying "Death Panels". And no, it doesn't. (See above).

Obamacare has an unelected panel of people who will decide what kind of care I can get! Yet another way of saying "Death Panels", albeit a softer way of saying it. It's true that the IPAB is appointed, not elected. However, they are expressly forbidden from reducing or rationing care. (Again, see above).

 Obamacare gives free insurance to illegal immigrants! Actually, there are multiple parts of the bill that specifically state that the recipient of tax credits and other good stuff must be a legal resident of the United States. And while the bill doesn't specifically forbid illegals from buying insurance or getting treated at hospitals, neither did the laws in the US before the PPACA. So even at worst, illegals still have just as much trouble getting medical care as they used to. (Citations: Page 141, sec. 1402, Page 142, sec. 1411, Page 144, sec. 1411, Page 151, sec. 1412)

Obamacare uses taxpayer money for abortions! One part of the bill says, essentially, that the folks who wrote this bill aren't touching that issue with a ten foot pole. It basically passes the buck on to the states, who can choose to allow insurance plans that cover abortions, or they can choose to not allow them. Obama may be pro-choice, but that is not reflected in the PPACA. (Citation: Page 64, sec. 1303)

Obamacare forces churches/taxpayers to pay for women to have free birth control! This claim refers to Page 33, sec. 2713, which says that health insurance must include preventive care for women supported by the Health Resources and Services Administration. And that Administration, on the recommendation of the independent Institute of Medicine of the National Academy of Science, has determined that preventive care for women should include access to well women visits, domestic violence screening, and, yes, contraception. So insurers do have to provide these services, and no, they cannot require their insured to pay for them. This is because birth control, particularly its effects on hormones and stuff, are very important to the health of some women. "But what if I, as a taxpayer, don't want to pay for it?" you ask? You don't. It's provided by the health insurance company, not the government. "But what about employers who provide employee plans? Does that mean a church would have to pay for the birth control of its clergy?" you ask? The answer is "no". On February 10, 2012 (or February 15th, if you go by the header in the document), the Department of Health and Human Services issued this document, detailing its enforcement of that section of the ACA. Kaiser has given their own interpretation of this. The short version is, churches and houses of worship are exempt from this rule, period. Other religious employers (like Catholic hospitals) are also exempt until August 2013, by which time insurance providers are to have created special plans specifically for them, that put all the costs of contraception on the insurer, with none on the employee or the employer. So not one cent of taxpayer money is going towards contraception, nor is a single cent of a church's money paying for contraception either. Birth control is to be provided to women by the insurer.

Obamacare won't let me keep the insurance I have! The PPACA actually very specifically says you can keep the insurance you have if you want. (Citation: Page 74, sec. 1251)

Obamacare will make the government get between me and my doctor! The PPACA very specifically says that the Secretary of Health and Human Services (who is in charge of much of the bill), is absolutely not to promote any regulation that hinders a patient's ability to get health care, to speak with their doctor, or have access to a full range of treatment options. (Citation: Page 184, sec. 1554)

Obamacare has a public option! That makes it bad! The public option (which would give people the option of getting insurance from a government-run insurer, thus the name), whether you like it or not, was taken out of the bill before it was passed. You can still see where it used to be, though. (Citation: Page 111, sec. 1323 (the first one))

Obamacare will cost trillions and put us in massive debt! The PPACA will cost a lot of money... at first. $1.7 Trillion. Yikes, right? But that's just to get the ball rolling. You see, amongst the things built into the bill are new taxes - on insurers, pharmaceutical companies, tanning salons, and a slight increase in taxes on people who make over $200K (an increase of less than 1%). Additionally, the bill cuts some stuff from Medicare that's not really working, and generally tries to make everything work more efficiently. Also, the increased focus on preventative care (making sure people don't get sick in the first place), should help to save money the government already spends on emergency care for these same people. Basically, by catching illnesses early, we're not spending as much on emergency room visits. According to the Congressional Budget Office, who studies these things, the ultimate result is that this bill will reduce the yearly deficit by $109 billion (Source). By the year 2021, the bill will actually have paid itself and started bringing in more money than it cost.

Obamacare is twice as long as War and Peace! War and Peace is 587,287 words long. The Patient Protection and Affordable Care Act, depending on which version you're referring to, is between 300,000-400,000 words long. Don't get me wrong, it's still very long, but it's not as long as War and Peace. Also, it bears mention that bills are often long. In 2005, Republicans passed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 2005, which was almost as long as the PPACA, and no one raised a stink about it.

The people who passed Obamacare didn't even read it! Are you kidding? They had been reading it over and over for a half a year. This thing was being tossed around in debates for ages. And it went through numerous revisions, but every time it was revised, it was just adding, removing, or changing small parts of it, not rewriting the whole thing. And every time it was revised, the new version of the bill was published online for everyone to see. The final time it was edited, there may not have been time to re-read the entire thing before voting on it, but there wasn't a need to, because everyone had already read it all. The only thing people needed to read was the revision, which there was plenty of time to do. 

Pelosi said something like, "we'll have to pass the bill before reading it!" The actual quote: "we have to pass the bill so that you can find out what is in it, away from the fog of controversy," and she's referring to all the lies and false rumors that were spreading about it. Things had gotten so absurd that by this point many had given up on trying to have an honest dialogue about it, since people kept worrying about things that had no basis in reality. Pelosi was simply trying to say that once the bill is finalized and passed, then everyone can look at it and see, without question, what is actually in the thing (as opposed to some new amendment you heard on the radio that they were going to put in).

Obamacare was signed quietly in the middle of the night! This is stretching the truth to the breaking point. The House version of the bill was signed on October 8, 2009 at 12:15 in the afternoon, and the Senate version was signed on December 24, 2009 at 7:05 in the morning. The only vote that you could argue came close to "the middle of the night" was the House vote on the changes made in the Senate version of the bill, which took place at 10:49 p.m... on March 21, 2010, a whole three months later. It wasn't a vote on anything anyone hadn't seen before, but on the version of the legislation passed in the Senate. 431 of the 435 men and women in the House of Representatives voted on it. citation: govtrack.us).

Obamacare is a government takeover of the health industry! What do you mean by "takeover"? Like, for example, do you believe that because the FDA regulates food to make sure that it's safe to eat, that we've had a government takeover of food? By the same right, the Affordable Care Act adds a lot of regulations saying how health insurers should do business, in order to make sure that more people have insurance and that their insurance works in a way that's fair and reliable... but the government themselves isn't taking over insurance. They're not selling us that insurance - the Public Option, which would have made a government-run insurance plan to compete with private plans, never got passed. So government isn't taking over your insurance any more than they've taken over your food.

Obamacare cuts $700 Billion dollars from Medicare! Not really. What the Affordable Care Act actually does is that it brings Medicare Advantage costs back in line with regular Medicare (Citation: Page 384, Sec. 3201 and Page 389, Sec. 3202), limit the growth of certain parts of Medicare where our spending is outpacing what we're actually required to spend (Citation: Page 426, Sec. 3402), and replaces some parts of Medicare with better, more cost-effective substitutes (Citation: Page 361, Sec. 3112). These accusations are based on a report by the non-partisan Congressional Budget Office showing the reduction of Medicare costs from 2012-2022. However, the accusations fail to mention that those "cuts" will not result in reduced care, reduced enrollment, or reduced anything really, other than reduced costs to the taxpayers... which both Democrats and Republicans agree is a good idea (so much so that Republicans like Paul Ryan even included those exact same "cuts" in their own budget plans).

Obamacare takes money from Medicare to pay for Obamacare! It absolutely does not. Every penny saved by changes the Affordable Care Act makes to Medicare goes back into Medicare. The bill itself specifically says that any of these savings must be used to increase Medicare solvency, improve its services, or reduce premiums (Citation: Page 481, Sec. 3601).

Obamacare is going to make hospitals drop support for Medicare and Medicaid! Some doctors and hospitals are worried about some of the big changes being made to how they're paid. Specifically, that Medicare and Medicaid are changing from compensating them for the number of patients they see to compensating them for how well they treat those patients. Some doctors have even threatened to stop accepting Medicare and Medicaid. But these threats seem weak when you realize that, according to the American Hospital Association, "Medicare and Medicaid account for 56 percent of all care provided by hospitals. Consequently, very few hospitals can elect not to participate in Medicare and Medicaid." Now, granted, reimbursements to hospitals under Medicare are in many cases less than the cost of care, but much of what the ACA does is to seek to reduce the cost of care, particularly by reducing recidivism (patients going back to the hospital to be treated for the same thing because they didn't get the right treatment the first time). And alarmists warning about "cuts made to Medicare" can look back above - it's not being cut, it's having its growth rate reduced, and any savings go back into Medicare.

Obamacare allows Barack Obama to create a secret health care army! I swear, I did not make this one up. There are actually people out there claiming this. It is pertaining to Page 562 of the bill, specifically sections 5209, 5210, and 203, which reduce limits on the United States Public Health Service Commissioned Corps, and creates the Regular Corps and the Ready Reserve Corps. What the claim gets right is that these are enlisted uniformed services. However, what these Corps do is respond to disasters like hurricane Katrina and the Haiti earthquake. They are enlisted medical professionals that can be called up in a time of crisis. In fact, the United States Public Health Service Commissioned Corps was involved in the assistance with both of those emergencies... but at that time, it was limited in size to only 2800 people. This section of the bill removes those limits so we are better-equipped to respond to emergencies like this in the future.

Edited and revised by myself, original content from an Explain Like I'm 5 post.

Re-imagining Employee of the Month

Category: News
Published on Sunday, 27 April 2014
Written by Raymond Krehn

It's common amongst management to recognize employees for their high work ethics. One of these methods is the all-to-familiar "Employee of the Month." You can see these displayed in some stores or offices along a wall with a picture of the the employee's face and usually a quote dictating why they're there. However, there can be more negative side effects than positive side effects of the reward.

A study at Harvard Business School discovered that the most productive workers and the most consistently punctual workers - suffered a 6-8% decrease in productivity after the award was instituted. It also shows that a low likelihood of winning may be ineffective because employees do not habituate good behavior, and instead lead to a highly strategic response from employees.

From a psychological standpoint, this can breed jealousy amongst teammates. The winners of the award may be considered a "stuck up" or "playing the politics game." In return, it reduces team cohesiveness and chemistry.

The award negatively impacts non-winners too. The criteria for nomination are typically vague and unclear. They may sacrifice quality or even falsify nominations or recognition for the award. Even worse, those who perform at a high rate and even strive for a job well-done may never achieve the award, or be consistently outperformed. As a result, their ego is deflated and their productivity/quality decreases. 

This isn't to say the award is a bad idea. For example, the employee recognized gets recognized by everyone, which may include the owner and CEO. When we evaluate the purpose we determine that it is to reward and recognize employees for exemplary service.

So, what can I do instead?

We want to award employees for being a good example to their teammates and going above and beyond their call of duty. We have to keep in mind that we don't want a reward system that could be gamed or falsified. 

Positive feedback is the best approach. Recognize it sooner rather than later, and be specific on the appraise: What did they do and why do they earn recognition? Be surprising! If the owner, CEO, director, or whomever pays a surprise visit and personally thanks the employee, then this is more beneficial than any award. Plus, it doesn't cost anything, monetarily speaking. However, don't be afraid to provide constructive feedback should any issues arise. Not everyone is perfect all the time. 

If the goal is to promote or advertise the team, then a board of recognition is worth it. For example, rather than having specific employee names mentioned, set the team as a whole.

For example:

Instead of "I would like to recognize Ray for stepping in and taking the time to help me understand the process."

Say "I would like to recognize a person on this team for stepping in and taking the time to help me understand the process."

This provides less pressure on the individual and reinforces teamwork. However, this shouldn't replace recognizing the employee personally for their efforts either.

This is a link to a MIT published article on recommendations for employee recognition programs for alternative ideas.

Open-plan offices are a false economy

Category: News
Published on Monday, 21 April 2014
Written by Raymond Krehn

It wouldn't be too wild an assumption that very few of us enjoy working in an open-plan office. For all the propaganda that they improve communication, boost team spirit and increase efficiency, the fact is that as far as most of their inmates are concerned, open-plan offices are noisy, distracting and stressful –just the wrong sort of environment, in fact, in which to work effectively.

The trouble is that many organisations apparently continue to inhabit a nineteenth-century mind-set about work and the workplace in which managers believe that employees have to be constantly supervised, that departments and functions should be kept separated and advances up the organisational hierarchy must be marked with more territorial space.

And of course, cramming more employees in a smaller space is always going to have its financial attractions. But according to a new study of more than 40,000 American office workers, it's a false economy. In fact there is no evidence that open plan spaces offer any benefits all – least of all improved interaction and communication.

Jungsoo Kim and Richard de Dear from the University of Sydney Faculty of Architecture used a standard questionnaire to evaluate how satisfied workers were with their office environment. Two thirds of those surveyed worked in open-plan offices (with or without partitions), a quarter had private offices and the remainder shared a single room with co-workers.

The findings, outlined in The British Psychological Society Research Digest, confirm that workers in private offices were the most satisfied with their workspace.

The biggest issue with open-plan offices was "sound privacy", with the noise problem being even more marked in open-plan offices with partitions – or cubes. Meanwhile, personal space (or the lack thereof) emerged from the survey as the biggest single factor in determining overall satisfaction levels.

"Enclosed private offices clearly outperformed open-plan layouts in most aspects of Indoor Environmental Quality (IEQ)," the researchers found, "particularly in acoustics, privacy and the proxemics issues."

But the key finding as far as debunking once and for all any arguments in favour of open-plan environments is that the "benefits of enhanced 'ease of interaction' were smaller than the penalties of increased noise level and decreased privacy resulting from open-plan office configuration."

In other words, the costs of lost privacy and increased distraction are not outweighed in open-plan environments by the benefits of ease of communication. And just to confirm this, the study also found that workers in private offices are more satisfied with ease of interaction than those in open-plan spaces.

While the Australian team don't quantify what this means in terms of productivity, a 2005 report by the UK Commission for Architecture & the Built Environment found that a well-designed, employee-friendly office environment can boost productivity by as much as a quarter.

And a separate survey the same year found that eight out of 10 professionals considered the quality of their working environment very important to job satisfaction and more than a third considered the working environment as a factor in accepting or rejecting a job offer.

As the Australian team state: "Our results categorically contradict the industry-accepted wisdom that open-plan layout enhances communication between colleagues and improves occupants' overall work environmental satisfaction," the researchers concluded.

"Considering previous researchers' finding that satisfaction with workspace environment is closely related to perceived productivity, job satisfaction and organisational outcomes, the open-plan proponents' argument that open-plan improves morale and productivity appears to have no basis in the research literature."

 

Workspace satisfaction: The privacy-communication trade-off in open-plan offices appears in the December 2013 Journal of Environmental Psychology.

Amble, Brian. "Open-plan offices are a false economy." Open-plan offices are a false economy. management-issues.com, 22 Aug. 2013. Web. 21 Apr. 2014. http://www.management-issues.com/news/6735/open-plan-offices-are-a-false-economy.

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