Transparency in business can be a very good thing. Sharing timely, relevant and accurate information with employees is an ethical and respectful practice that can help steer a business or organization away from failure and toward success.
Employees seek and appreciate leaders and managers who freely share information. A recent study conducted by TINYpulse that analyzed data from approximately 300 companies and more than 40,000 responses found that management transparency was the top factor when determining employee happiness. The more transparent leaders were, the more employees trusted them.
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Sharing information with employees and customers can enable workspace awareness, build trust and help companies achieve goals. Moreover, transparency can enable better decision making. But transparency also has an opposite side – a “blind side” of excessively sharing critical information that can backfire and threaten to cause more business pain than gain for everyone.
The development and utilization of transparency does not guarantee success. For example, managers and leaders who excessively share too much “what” and not enough “why” often create a blaming culture that discourages employees and diminish motivation. Too much transparency of employee errors can also result in people hiding innovative ideas. Elevated levels of visibility of mishaps can reduce creativity as people fear the watchful eye of their superiors.
Furthermore, managers who consistently use transparency in order to punish bad behavior and recognize good work may also communicate moral standards that are impossible to meet. When employees have this impression, they are motivated to resist, resulting in less citizenship behavior. Even the best employees can and will occasionally make mistakes.