What Is the Meaning of Transparency in the Workplace?

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Workplace relationships are built on trust, and a business that values transparency shows its workers that it stands by its practices and has nothing to hide. A business may have written policies that promote and address transparency, such as an open-book approach to accounting and financial statements.

The real meaning of transparency in business goes beyond rules and guidelines with a genuine willingness to share information so employees feel kept in the loop and understand what is actually going on with the company.

TL;DR (Too Long; Didn't Read)

Transparency in the workplace involves the practice of sharing information with employees. A lack of transparency in the workplace creates distrust and has a negative effect on employee morale.

The Meaning of Transparency in Business

Transparency is the quality of allowing light to shine through. A transparent window allows you to see what's on the other side, and a transparent business similarly keeps information visible rather than hidden. This openness usually starts at the management level and applies to the ways that leaders treat employees, especially with regard to sharing information.

A business that is transparent about its financial situation gives its employees enough information to know whether or not their jobs are secure and whether they are reaping the benefits of windfalls and surpluses. Hiring transparency is the definition of honesty and clarity, as even prospective employees are given as much relevant information as possible about their prospects for being brought on board and the work that will be expected of them.

Transparency in business can also apply to partnerships and collaborations. If your business wholesales products to retailers, and you run into issues with your supply chain, it's often better to be upfront about the difficulties you're having and the solutions you're devising rather than pretending that everything is as it should be and scrambling to make things work despite obstacles.

Open-Book Management

Open-book management is a special instance of workplace transparency that involves sharing accounting information with employees and also training them so they adequately understand financial statements. Training employees to understand a profit and loss statement is an effective way to engage them in the process of trying to improve the company's bottom line. If they see bigger-picture issues in addition to the tasks right in front of them, they'll be better able to make strategic decisions when the opportunity arises.

Sharing a balance sheet with employees also helps to engage them with their work at a deeper level. This practice can be problematic, however, because if the company is struggling, they may fear for their jobs and be more likely to jump ship. Conversely, if the business is doing well, they may feel that they deserve raises even though it is more in the best interests of the company as a whole to save for a rainy day.

Advantages of Workplace Transparency

  • Trust. When your employees see that you are willing to let them in on the inner workings of the company, they're more likely to trust that you are acting in their best interests. They feel valued, so they are more likely to act in ways that are deserving of that trust.

  • Engagement. Workers are more likely to care about their work if they have a clearer picture of what is going on with the company. If they just see you struggling to make ends meet, they may assume that you're managing things properly, but if they know that a critical payment from a customer is late, they may even make sacrifices to help you manage the short-term cash-flow crunch.

  • Insight. If your employees know more about the inner workings of your company, they may be able to help you make better decisions. They are on the front lines of interactions with customers, so they may see difficulties that aren't on your radar. 

References

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.

Photo Credits

  • Thomas Northcut/Digital Vision/Getty Images