To some, workplace transparency is a trendy cure-all for all that ails a struggling work environment. For others, it’s a dangerous practice that encourages leaks and spreads employee dissatisfaction.
One thing remains clear, though: today’s workers, especially millennials, demand greater honesty and financial transparency from their employers, and a growing body of research is showing promising results.
Now, more than ever, it’s essential for decision makers to understand why transparency is in high demand.
Employees genuinely want to know how their company works—it keeps them happy and engaged.
Employees’ hunger for transparency can be motivated by altruistic ends, like contributing to a more effective and efficient workplace.
This desire is often hindered when information isn’t shared freely, and this happens often—a survey titled “Dedicated but in the Dark” from Kimble Applications found that 75 percent of employees reported that they care deeply about the success of their business—yet only 23 percent understood how the company was performing.
Transparency is a method of filling that desire to better understand, which appears related to their desire to improve on the job. Approximately 23 percent said greater transparency would better motivate them while one-third said it would help them better understand their employer’s goals.
These self-assessments seem to reflect findings (PDF) in numerous studies that have shown a positive correlation between transparency and employee engagement/happiness.
Employees with greater access to financial information enjoy a greater trust of management.
Among the many management fears of a transparent workplace is that increased financial information sharing will lead to unproductive infighting and greater resentment among the team. That assumption, though, fails to consider how most workers care about the success of their employer.
For instance, John Case, the writer credited with coining the term “open book management,” says that most workers overestimate the portion of company revenue that exists in profits. Learning that profit margins are thinner than estimated leads to employees better understanding difficult management decisions, like layoffs and cost-saving measures.
Even in the case of bad news, employees fair way better when management is upfront. Over 90 percent of respondents to a Geckobaord survey said they’d rather hear negative news than no news at all. Additionally, doing so builds trust between management and rank-and-file employees, which is extremely important when you consider that yet another study found only 52 percent of employees consider their employer open and upfront.
Information sharing helps workers better understand their precise contribution.
A study from ORC International found that 29 percent of millennials don’t know how what they do impacts their company’s success. A Kimble Application survey found that two-thirds responded that they didn’t feel their work “made a major impact on the company’s performance.”
This was also found to correlate to whether employees stay with that employer.
Along with studies showing greater performance and satisfaction among workers with greater information access, this seems to suggest that making employees understand how they contribute is an effective method of boosting morale.
Transparency is about understanding the employee experience.
Today’s research shows, above all, a shifting image of the ideal workplace from a rigid, formalized and hierarchical organization to one that brings the best out of each worker by playing to their strengths.
Transparency is an essential component of success in today’s business landscape. If you would like to learn more about how to build an accountable and high-functioning team, set up a call today.