Let’s talk about transparency. We all want things to be clear in our lives and particularly in our relationships – from our personal connections to our business contacts. Transparency is the act of being clear, open, candid, and forthright in your dealings. That all sounds great, but is it really obtainable today, especially at work?
Some would say that no business can be successful without being fully transparent with its partners and employees. Today’s employees are more curious about who they work for than ever before. If you don’t believe me, just conduct an interview for a high-level position, and see what kinds of questions are being asked. Job seekers are concerned about joining a company with poor leadership, inadequate business planning, a lack of corporate integrity, and/or a bad business model. They are asking more questions about the company’s culture, whether there are any problems within the organization, the company’s market position, and its target audience. They want to know more about everything, and if companies don’t want to share this information, they will go elsewhere.
Transparency is an important part of a company’s culture, but it only works if a company makes a commitment to creating open business relationships. Employees feel better about working for employers that operate with transparency. It’s a common perception that companies that share information freely are more honest and concerned about their employees’ work and personal lives. When employees feel appreciated and cared for, they are much more loyal and productive than those who feel used and manipulated. They will even trust the company when it comes to things like promotions, fair salaries, and benefits.
There are financial advantages to being transparent as well. Companies who hope to secure funding through loans, investments and the stock market should consider “opening the books” if they want to generate serious financial interest. Those looking to invest capital in exchange for equity are more likely to opt for transparent organizations. This way the investor can examine and review the financial portfolio and assess the risks before offering any cash. Those who may want to partner with or endorse a company also prefer an “open” culture, so they know what they are aligning with.
Transparency works well for the business operations side of things, but what about human capital management? From an HR perspective, can there be too much transparency at work? As HR professionals, we are asked to evaluate risk as it pertains to personnel decisions, protect the company from employee-related litigation, support the employees, and manage all of the various personalities within the organization. HR practitioners will tell you that employees often gripe and complain about small things and that those concerns can grow into larger things – which makes total transparency in all areas rather difficult. Even if you’re able to provide transparency in salary negotiations, how do performance evaluations and raises tie into that approach? Usually, one employee outperforms another to win the raise, bonus, or promotion. Should those details also be made transparent?
Here’s something else to consider: how do you handle employees who want to know why another employee is missing work due to health concerns, injuries, or other private matters? What about terminations, especially those that entail confidentiality clauses? There are certain details about health, legal requirements, and discrimination that must not be shared under any circumstance, or you could risk violating HIPAA laws, the NRLA, or even Title VII.
Just as confidentiality in the HR field is usually a limited confidentiality, it may be best for us to offer limited transparency. Any leader can tell you that sometimes you have to withhold information from your team in order to keep them focused on the task at hand. Sure, there will be instances when full disclosure is necessary, but as the leader, you need to know when it’s time for full disclosure and when limited transparency is the best course. Let’s be honest – some people handle corporate news better when it’s shared on a strictly “need to know” basis.
Transparency creates trust among members of an organization, builds loyalty among employees, and generally creates a pleasant work environment. Managers notice all these benefits, and over time they tend to implement policies that give employees much more information about the company’s activities and more freedom to ask questions.
We expect too much from transparency. Almost everything has certain limitations. Just think about the chaos that would take over the world if we had total liberty. With total transparency, it is the same thing, considering the present world’s tendency toward competition and thirst for power. It’s important to maintain a certain degree of transparency so both partners and employees will trust your organization, but some information should stay hidden. Someone who knows too much can use the information as a weapon against your organization.
We should be realistic when we say that everything that happens in an organization should be known by everyone – is this really helpful for anyone? I believe that a company should pay attention to the information it offers to employees. Let’s be honest – nobody is perfect, but this does not mean that we should highlight our imperfections. I’m not against transparency, but I prefer to concentrate on things that directly interest me, and trying to know everything is a time-waster.
Transparency is important when we are talking about an organization, but there should be limits. There is a fine line between openness and naivety – I’m totally okay with transparent communication, but I also believe that little mystery does no harm.