In today’s evolving workplace, leaders at all levels are looking to create hybrid/flexible arrangements, an inclusive environment, and development plans. But what many employers don’t focus enough on is providing greater transparency into decision making. Employees want to know what’s going on and how they play a part in the solution.
Research by Slack shows that over 80% of workers want a better understanding of how decisions are made, and 87% of job seekers say they look for transparency in a future workplace.
How Does Transparency Affect Organizational Performance?
A transparent workplace promotes consistent conversations between managers and employers with honest discussions about goals, objectives and performance. This trickles down into the organization.
Organizational transparency has significant benefits.
1. It increases employee engagement.
When you consider just 21% of employees are engaged at work, according to Gallup, finding ways to increase engagement is essential. Seventy percent of employees say continual updates on strategy from senior leadership is a big engagement driver.
When employees are more engaged, there is:
- Lower turnover
- Reduced stress/burnout
- Better customer service
- Lower rates of absenteeism
- Improved collaboration
2. It leads to higher profit.
Organizations with a high degree of transparency report profit margins that are 21% higher than average. These organizations provide the information employees need to take care of customers, leading to better customer service. In turn, this creates greater trust among customers.
There is a direct correlation between engagement and overall business performance. Unengaged employees are 18% less productive, according to Gallup. Conversely, organizations reporting high levels of engagement have 22% higher productivity.
When leaders at all levels clearly understand goals, they are also more likely to look for new or innovative ways to accomplish them.
3. It builds trust.
As former CEO of GE Jack Welch said, “Trust happens when leaders are transparent, candid and keep their word.”
Transparency builds trust, and trust is the cornerstone of accountability, results, and creativity. Leaders at all levels better understand how and why decisions are made, and it fosters open dialogue. When people trust and believe in leadership and understand what is expected, they are more committed to their work. They know how their job fits into the company’s mission and how their work impacts its success.
According to a study in Harvard Business Review, employees in high-trust workplaces are 76% more engaged and 29% more satisfied with their lives.
How Do You Create Workplace Transparency?
Cultivating a transparent culture in the workplace requires a proactive approach to your company’s direction. Here are three steps you can take to improve organizational transparency.
1. Provide your employees with a clear development path.
Employees at all levels often leave organizations when they don’t see development opportunities. They think of their work as a job rather than a career and are more attracted to organizations offering advancement opportunities.
Employees should know what it takes to advance and what skills and experiences they need to develop. Employers need to create a clear development path with growth opportunities. This should begin as part of the hiring process and continue to be reinforced in the workplace. For example, decisions about promotions and advancement should align with an employee growth plan to demonstrate a commitment to employee development.
A development path also fosters a culture of learning. Employees are more likely to seek opportunities to learn new skills when they know how it can accelerate their careers.
2. Ensure business objectives and goals are aligned.
Aligning business objectives with goals helps establish a culture of transparency. Employees have a better grasp of what is expected and how their performance impacts goals.
According to a study by Harvard Business Review, only 40% of employees say they are clear on their company’s strategies and key objectives. That means as many as 60% of employees are unsure of what it takes to succeed.
3. Communicate effectively and provide feedback to your employees.
The key to transparency is effective communication, which starts at the top. Business leaders must embrace a company culture of transparency as a policy item and actively take part. Employees today want to know why they are being asked to do something rather than just being told what to do.
This is a significant and necessary change for many executives. When the Edelman Trust Barometer first surveyed employees about their managers in 2013, a stunning 82% of employees said they did not trust their boss to tell the truth. Significant progress has been made, but less than half of employees today say they trust their boss.
A lack of trust can grow from poor or no communication, unclear goals, or a failure to take ownership of mistakes. These ineffective management processes create doubt and disbelief, especially if employees see managers say one thing but do another — for example, managers who play favorites in the workplace or fail to address poor performers.
Transparency requires sharing and talking about successes, failures, and lessons learned. It can mean holding difficult conversations when necessary to help stay true to the company’s direction and objectives. Without honest and open dialogue, creating a transparent workplace culture is impossible.
Another key component is providing consistent feedback. Employees need to know where they stand and how they perform against goals. Managers and supervisors need feedback on how they are doing as well.
Effective feedback should not be relegated to year-end company performance reviews: consistent and regular feedback creates greater transparency and accountability.
It’s also something employees want. Workers say that feedback helps them focus on important tasks, and it also helps engagement. A Gallup study shows that employees were four times more likely than other employees to be engaged when managers provided meaningful feedback within the past week.
Building a transparent workplace culture doesn’t happen by accident. It takes consistent focus and intention.
