Ask anyone whether transparency is good for the company, and the answer is an emphatic ‘Yes’. Since many people and studies have proved that transparent employers build trust and motivate people. However, too much of transparency can lead to chaos in the business environment.
Studies and real-time examples from the corporate world have shown that too much of transparency is also not good for the company. It can lead to mistrust, a culture of blame, lack of creativity, and inability to generate and share good ideas.
Tanaya Mishra, global CHRO, Strides Pharma, believes that too much of transparency is not good for any company. There are certain things which need to be concealed to a certain extent. “As an organisation and as an individual, it is import to be very careful about the amount of information being shared and how it is being shared,” cautions Mishra.
“As an organisation and as an individual, it is import to be very careful about the amount of information being shared and how it is being shared”
Tanaya Mishra, global CHRO, Strides Pharma
How too much transparency can create problems
Blame game – Sometimes, when controversial or serious information is revealed to all employees, people and businesses tend to focus a lot on the ‘what’ part of the story and hence, miss seeing the ‘why’ part altogether. For instance, in an article, a consultant mentioned an incident that happened with one of his clients. In a chemical factory, one of the safety officers lost his life in an accident at the factory. When the incident came to light, all employees started blaming the safety officer for not following the safety protocols, which were laid down by himself in the first place. No one tried to understand how or why the accident took place, and instead, proceeded to draw the wrong conclusions. That is why, Mishra also feels that any case of misconduct at the senior level and the information related to the internal investigation of the team should not be shared or revealed.
Mistrust – When transparency is actually considered a tool to ensure trust, how can it lead to mistrust at the workplace? Well, transparency may not exist at all levels. Employees, as well as those micromanaging them do end up having to share all sorts of information on how certain decisions have been arrived at or how certain calculations have been done while submitting documents to the seniors, or when bosses are copied in mails. This certainly does not foster trust, because it only proves that the managers or seniors do not fully trust their subordinates.
“Some information pertaining to individuals need to be kept confidential and managed sensitively so that it is not misinterpreted based on an incomplete view. After all, it may even jeopardise the privacy needs of other employees”
Anant Garg, director – HR, India & South Asia, Becton Dickinson
Confusion and chaos – A fintech startup called Zappos, came up with the concept of self-governing teams. That means, there were no formal management roles and the responsibility of transparency lay entirely on the employees and team members themselves. Though it sounded pretty fancy, it did not really work for the Company. People actually began leaving the Company and at one point the attrition level was as high as about 14 per cent! Investigations into the phenomenon revealed that people were really confused about what was going on in the Company. There was a lot of unnecessary information floating around, which was only adding to the lack of clarity.
Clearly, not everyone in an organisation needs to or wants to know about everything going on at every stage and level within a company. People simply want to know things which can make their jobs easy. “Some information in the organisation may need to be limited to a certain set of individuals who are directly impacted by it or need it to make decisions,” asserts Anant Garg, director – HR, India & South Asia, Becton Dickinson.
Lack of creativity – In one of the big MNCs an open office culture was introduced in the name of bringing transparency. However, the practice backfired. When a study was conducted to examine the impact of the move, it was observed that instead of being transparent, people were actually concealing the good ideas!
What should and should not be transparent
As per the HR leaders, there are some things that companies should be transparent about and some others that they should conceal in the interest of the organsiations’ overall health.
Policy shifts – VDV Singh, former VP-HR, JK Cement, feels that major shifts in the policy and business should be effectively conveyed to the employees and there should be no ambiguity there. In fact, he also believes that while making employee-centric policies, recommendations from the people should be invited to understand the ground reality. “Suggestions from others do facilitate decision making. However, such suggestions should be invited strategically with the sole aim of improving the decision,” advises Singh.
“Major shifts in the policy and business should be effectively conveyed to the employees and there should be no ambiguity”
VDV Singh, former VP-HR, JK Cement
Compensation – Most HR leaders agree that everything around compensation cannot be transparent. Garg believes that companies can be transparent about how bonuses of various individuals have been calculated without revealing to the employees how much each employee has received. After all, it is natural for every employee to think they have contributed significantly.
Employee data – Certain facts, such as the attrition level and retention data and other data points that companies collect should be available to only certain people in the company. Human resource leaders believe that such data is quite confidential and if revealed can be misused by certain people.
PIP Programmes – Having a performance improvement programme (PIP) in an organisation is a common practice for many companies. Any information related to this programme or the reasons behind certain employees quitting and their performance issues should be concealed while giving referrals for a particular employee going through the programme. “Some information pertaining to individuals need to be kept confidential and managed sensitively so that it is not misinterpreted based on an incomplete view. After all, it may even jeopardise the privacy needs of other employees,” points out Garg.
While it is good to be transparent, the level of transparency required can only be decided after considerable thought. One has to be clear about the information that needs to be kept confidential and the part that can be shared, and at what level.