The Balancing Act: Transparency and Trust
Transparency has become a top priority for executives seeking to maintain a positive corporate culture. Transparency is the level to which relevant and salient information about the business or corporation is shared with management, front-line employees and staff.
In a March 2018 column in Forbes, William Arruda says a transparent work environment “leads to greater trust, and trust in an organization is paramount to its success.” Arruda argues that transparency builds employee retention, since “35 percent of workers say they’d be apt to leave their company if they didn’t trust their manager.” Transparency, he says, also “encourages employees to become more actively involved in problem-solving.”
As a senior executive, it is disappointing to hear from managers and front-line staff that they do not know or understand the direction or vision of the organization. It is even more discouraging to hear them say, “No one ever tells us anything.”
In my experience, transparency in personnel matters concerning behavior and performance are the most difficult to manage and address. McKinsey & Company points out that the “open sharing of information on individual performance and pay levels, often invoked as a way of promoting trust and collective responsibility, can backfire.”
Executives and other employees are expected to perform their job competently. Team members should adhere to company policies and practices, and they should act in a manner that is consistent with the culture of the organization. When they fail to do so, supervisors may enact a performance improvement plan or conduct an investigation. Sometimes, this might result in a specific action or the termination of employment, either through resignation or involuntary separation. However, it is widely accepted as a best practice that human resources and supervisors keep the details behind such discussions, investigations and employment actions strictly confidential.
In an organization touting transparency, keeping human resources matters confidential can sometimes create challenges. One example is as simple as raising questions about the organization’s true commitment to transparency. But, employment actions can create far more insidious outcomes.
In cases where an employee is accused of wrongdoing and no action is taken after a confidential investigation exonerates the employee, the restricted flow of information can lead employees to believe that there is no accountability. And, in cases where there is action taken, employees may perceive retaliation. In all these instances, there is risk that HR matters damage organizational culture.
There are some important steps an organization should take to prevent ambiguity in HR matters from undermining the culture:
Make clear the limits on transparency. Inc. explains that “transparency isn't all or nothing -- things don't have to be either completely open or completely a secret.”
Enact explicit policies around appropriate employee behavior, triggers for employment actions and safeguards against retaliation.
Be mindful of perceptions of staff about employment actions. Perceptions matter. Sometimes it may be necessary to delay or modify the “right” HR response to poor behavior or performance to mitigate employees’ negative perceptions about personnel matters.
A corporate culture that emphasizes transparency can support a productive workforce and management team. But care must be taken, especially in the areas of personnel matters to orient employees to the boundaries of transparency.