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How To Create Transparency in the Workplace

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Workplace transparency has become increasingly valued both by employers and employees. So much so that there are now rankings of companies that actively and purposefully make transparency part of their mission and vision. 

But exactly what is transparency in the workplace? Is it worth overhauling your existing policies just to create it? 

Here, we’ll help you gain a clear understanding of workplace transparency, explain why it’s important, and give you tips on how to encourage it in your organization.

Defining transparency in the workplace

Glassdoors, an employer review company, defines workplace transparency as “operating in a way that creates openness between managers and employees.” 

According to Dr. Michael Leiter, Professor of Organizational Psychology at Deakin University in Melbourne and at Acadia University, transparency is about the level of trust in a professional relationship. It’s about respect and making people feel like they are part of a community and that they matter.

Transparency at work involves many factors, including communication, salary, and operations.

If you’re in a leadership position and wondering if your company is succeeding at being transparent, you can evaluate whether:

• Employees are routinely informed about the company’s performance and goals
• Management constantly keeps secrets from employees
• Salaries are openly discussed.

The importance of transparency in the workplace

You now know what workplace transparency is, but should you even care about it? The answer is an absolute yes. Here are some reasons:

  1. It’s beneficial for productivity: A 2014 study by the American Psychological Association concluded that workers trusted their companies more when there was achievement recognition and effective communication.

    The study also concluded that this led to higher levels of energy, higher engagement with work, and higher motivation to do the best possible work. Creating trust, then, is a cost-effective and positive way to boost productivity and satisfaction. 
  2. It’s highly valued: Unsurprisingly, workplace transparency is considered a positive quality that employees gravitate towards.

    The 2014 APA study also found that people are 85% more likely to recommend their employer to others when they feel valued. Transparency can help you recruit top talent and keep high-performing employees.
  3. The opposite can be fatal: Transparency is more than an optional perk, like being allowed to bring your dog to the office.

    Not having transparency can lead to fear, suspicion, and distrust. Again, this can be detrimental to your bottom line. As Dr. Leiter explains, feeling like you have control over your work life is important for avoiding burnout.

What to do about a lack of transparency in the workplace

If you’re sold on the benefits of transparency and want to implement it, these are the key elements of workplace transparency, with tips on how to achieve them:

1. Effective communication

Do your employees know how the company is performing? Can anyone who works there easily answer what your goals for the next quarter are? If not, you may be inadvertently creating a lack of operational transparency within your company. 

“Employees shouldn’t feel like they’re just hanging around here, but rather like they’re part of things,” declares Dr. Leiter. It’s very difficult to feel motivated or determined to work towards something if you don’t feel like you’re part of it.

Having everyone on the same page and giving people a clear and common finish line to work towards can boost engagement. Tracking time as a team with a tool like Toggl Track can provide visibility into what everyone is working on.

Keeping employees in the loop, whether things are going well or not, is also part of effective communication. It shows respect to employees and helps enhance the feeling of community. 

If you realize that your company lacks effective communication, don’t panic! Sometimes things are opaque not because anyone is trying to keep these truths hidden, but because the appropriate systems have not been put into place. Once you have found where the leaks are in the system, you can more easily cover them.

2. Accessible documentation

One of the best ways to foster communication while respecting your employees’ time is to have accessible documentation. Think of it as a sort of passive communication. Documentation can allow employees to solve simple doubts like vacation policies or to know who to turn to in specific situations. 

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Documentation can also exist as a guideline for resolving issues so managers know how to handle problems as they arise. More importantly, having these guidelines be accessible helps employers understand how or why certain decisions are made. It goes without saying that this is only really effective if the procedures are as fair as possible. 

3. Honesty

It can be difficult to decide just how honest you should be in the workplace. Perhaps this is why many companies fail at it. The aforementioned 2014 study found that 32% of people believe that “their employer is not always honest and truthful.” And 24% of respondents stated that they don’t trust their employer. 

There’s no shortcut to trust, but mutual trust is key for productivity and morale.

Honesty is the best policy because, as Dr. Leiter states, “trust doesn’t just happen. You trust on the basis of having some evidence that someone is worthy of [it].” If you give employees a reason to believe you won’t always be honest, it will be hard to regain that lost trust.

Honesty in the workplace requires courage, especially when things aren’t going well. But this is when it is most important to keep honest. “Important decisions are made about people’s lives and careers,” says Dr. Leiter. People should know how these decisions are being made, he elaborates.

4. Policies

Forbes advises employers to “make transparency part of the company culture by adding it to the company policy.” This means consciously integrating transparency into every aspect of the company, including operations, agendas, goals, and training. 

Doing this can signal to current and potential employees that you are serious about implementing transparency in the workplace. In turn, it can help increase their trust in the company.

However, policies are a necessary but insufficient condition of workplace transparency. You need the right policies, but policies aren’t enough to cultivate transparency. Combining policies with the other elements listed here is critical if you want to make a difference.

5. Culture

One of the best ways to ensure transparency happens in the workplace is to nurture a culture that values it. 

You can begin by stating its importance out loud and frequently. Start as soon as the recruiting process, so that potential employees are aware from day one that transparency is important. 

Then, make sure that everyone has an accessible way to maintain communication. Team members at all levels should be able to communicate easily, which can be achieved by using software like Slack.

Being able to send a message to anyone in the company—and being aware who you can turn to when issues occur—encourages a culture where community and openness matter.

6. Leadership

Having someone in a leadership position say one thing and do another causes animosity, distrust, and a lack of respect towards leadership — a dangerous situation for a company. 

It is imperative for managers to lead by example and act on transparency values. Doing so can manifest in actions such as practicing honesty when it is difficult, being accessible when an issue between team members occurs or by rewarding transparent behavior.

We’re not saying you should give out stickers for openness, but acknowledging people’s positive actions, verbally or through writing, can be very effective.

Dr. Leiter suggests that leaders also take decisive actions when they notice that trust is becoming an issue within their teams. For instance, if an employee survey reveals that gossip, miscommunication, and closeness are common problems, managers can reach out to experts to work with the group.

Team building exercises or communication sessions moderated by an outsider can be beneficial, but they cannot happen without support from the top. 

These solutions can be costly, but, as Dr. Leiter maintains, “you can tell what’s important to companies by where they put their money.”

7. Salary transparency

Being open about salaries can be a difficult and even terrifying decision. If you value trust, however, it might be exactly what you need to do. 

At Toggl Track, for example, salaries for open jobs are listed along with the job requirements on the hiring page.

Dr. Leiter believes that making salaries open “is going to create tension, but it’s a valuable thing to do.” He elaborates that people—particularly groups that have been historically underpaid and mistreated—can have inherent distrust or feel suspicious of workplace practices. 

If you have good policies and fair wages, making them public or open within the company can mitigate these suspicions and prove to employees that they are being appropriately compensated. Of course, if you do this, “you have to make sure that you can justify it.”

Salary transparency is then also a great way to keep favoritism and biases in check, since employers are forced to give salaries they are able to justify.

Fair compensation is the most tangible way to make employers feel valued. This, in turn, will help your company be more productive and a more satisfactory place to work.

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July 27, 2021