Why Transparency Matters to Employees

Culture

December 7, 2022

Stephen Burke

X min

5 min

What is business transparency, anyway? This article dives into the benefits for your organization and how you can overcome potential challenges.

Group of employees working in harmony in a great corporate culture.
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Table of Contents

Trust is built upon a foundation of transparency; employees, clients and partners trust an organization that is open, honest, and clear.

For employees, transparency means having enhanced visibility into processes, decisions, and strategy that goes beyond the superficial or the “need-to-know". Access to pertinent information helps people make more effective decisions, especially in the workplace. According to Glassdoor, “when an organization is more transparent with their employees, they tend to be more successful in several areas: they have increased employee engagement, stronger company culture and [transparency] fosters a type of comfort that allows employees to freely communicate.”  

What is business transparency?

Here’s a (fictional) short story about a person named Leslie. Leslie had worked in technology for quite a while when she felt it was the right time to change careers. To learn as much as possible about prospective opportunities, Leslie tried to learn as much as she could about a company, she thought she might want to work for; the problem was that there wasn’t much available on their website beyond templated copy and marketing speak that gave her no insight into what the company was really like. Leslie decided to take matters into her own hands by using other digital resources available to her, like search engines, social media, and career review websites. In the end, Leslie was able to learn enough about the company to pursue it as an opportunity. Through her search, she started to understand the culture, the objectives, and the philosophy of the company.

There are two important takeaways from this story:

1. This could easily be the real story of anyone seeking new opportunities and having to go deep to find necessary information. In Leslie’s case, she was highly motivated and did the extra work to dig up information, but not everyone – client or potential employee, has the same dedication.

2. The need for prospective employees, clients, and partners to do a deep dive to learn about your business can be avoided by being more transparent on your own website.

This doesn’t mean you have to expose every aspect of your business to the public and potentially make your organization vulnerable to competition. What it does mean is that you have an opportunity to tell your brand’s unique story in an open and authentic way, which will help you grow your business, reach the right clientele, and attract employees who are a great culture fit.  

While the example above is of a prospective employee, the impact on prospective and existing customers is also significant. Forbes states that honesty and transparency can help a business see growth in its customer base. In fact, a study found that 94% of consumers questioned would remain loyal to a transparent brand.

What are the benefits for my organization?

First and foremost, you will stand out as a business that is open, honest, and authentic. When an organization is viewed this way, people have more faith in working for them (as an employee) and with them (as a partner or client).  

MyHRToolKit outlined some specific benefits of business transparency which focus on relationship building with employees and improving overall workplace culture. Healthy relationships start with trust, and when your business is transparent, it “helps employees feel like they are part of something bigger. It invites them to really be a part of your business and its vision. It gives them ownership over their role, provides them with confidence in your leadership, and often means they will remain loyal to your company for longer.”  

When it comes to how this can impact your workplace culture it all boils down to the environment you want to foster; a transparent culture “strengthens relationships between employees and their employers and helps nurture an environment of collaboration. Rather than fighting for a position at the top and pulling down others along the way, employees will be more likely to support their colleagues and stay motivated even when the going gets tough.”

How can I overcome potential challenges?

Being transparent isn’t without its own set of challenges. When you decide to be more open about your business, that vulnerability may instill fear and skepticism – ‘have we shared too much?’ ‘Are we giving our competitors an edge?’ While these are normal concerns, a more important question to ask of your business is ‘can our brand grow and thrive without being more transparent?’  

What’s important to remember is that the type and amount of transparency your business fosters are completely within your control. According to Harvard Business Review, there are very real challenges in being too transparent, but finding the right balance for your organization can ensure you’re setting the right tone and facilitating an optimal experience for everyone. They outline four categories of transparency in business:

  • Boundaries around teams - Members of a team are more likely to embrace transparency if they know there are set boundaries in place that limit information from becoming too far reaching. (e.g., the R&D team may want boundaries to protect items still in the development process)
  • Boundaries between feedback and evaluation - Giving employees permission to learn and grow from their day-to-day actions without their mistakes being exposed and over scrutinized.  
  • Boundaries between decision rights and improvement rights - Drawing a line between an organization’s innovators and decision makers as they need differing levels of transparency. Holders of decision rights benefit from a transparent environment while that kind of visibility gets in the way of employees’ striving to make improvements. (e.g., executive team members require transparency to make the best possible decision, while team members who are innovating require a less transparent environment so they can create more freely).
  • Boundaries around time - Transparency granted for a specified period of time, allowing employees to prepare for —and make the most of—their window of privacy. This type of boundary complements the other three.

What’s the next step?

The benefits of becoming a more transparent business vastly outweigh any potential challenges, as long as you’re mindful of what you’re being transparent about and are doing it in the interest of your team, partners and clients. The following are three ways you can encourage your company to become more transparent today:

  • Facilitate a safe space – when people know that the environment they are working in is safe, they become more willing to collaborate, challenge one another and ask for help.
  • Keep your team informed – transparency starts from the top down; when a business leader is open about the values, direction, and growth plans of the company, the team will feel more confident in the organization.
  • Employee recognition – Public employee appreciation helps your team feel appreciated for their efforts, shows them how valued they are within the organization and helps them stay better engaged while at work.

You’ve worked hard to create an organization that offers a unique solution to a problem – make sure you’re open enough to let people fully appreciate your greatness and help make you even better.  

About Kudos

Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce.

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