What if each employee can keep a check on their performance in comparison to everyone else in the organization on a daily basis? It would be fanatical, right? Maybe not. Transparency, the concept is all about giving the public access to all the corporate or business information like performance, execution plans, and even the salaries.
Qualtrics is a private research firm with transparency as a key component of their business philosophy. During the initial phase of the company, adapting this concept was a mere necessity; however, it continues to carry the principle forward even as it grows.
Mike Maughan from Qualtrics states that “Majority of companies fail because employees lose focus and get distracted looking for information.” To overcome this problem, the company decided to make all employees’ performance data available to one and all in the company. The information includes:
• Objectives and results involving returns and satisfaction target on a quarterly basis.
• Each employee’s goal for the week.
• Latest performance reviews, employee ratings and incentive structure.
• Observed success and failure stories, with self-evaluation notes.
• Career History of the company.
According to neuroscience, our brains work best when we do not need to cover up our flaws or dwell on errors. We deliver better when we aren’t caught up thinking about who will be boss’ favorite or will be “employee of the month,” getting a swift promotion. Instead of guessing the names of people bad mouthing our work.
We can stay focused with the help of such transparency.
But how would employees react to such transparency? Some might take it as a guide to improve their performance while others may become conscious about their information. But somehow, this will improve their performance, resulting in a healthy competition. Well-performing employees may guide the under-performing ones by providing them some methodologies to follow.
Corporate transparency can be categorized into internal and external transparency. Internal transparency involves employees while external transparency includes revealing the information to the consumers. This results in consumer loyalty, as the company is transparent about their positive and negative impacts on the society. Receiving better knowledge of the product creates loyal customers, company’s willingness to accept failures, help consumers establish their trust in the company.
Social media has a huge impact on the way business is conducted. Many previously unbeaten brands are now losing their reputation as they are not providing the details of their product content, even when the customers are demanding. When consumers connect with any brand on the social media, they expect to know the positives and negatives of the business. Facebook and Twitter can be much more than a marketing tool for brands, especially to disclose certain information before the customers find out. Such initiatives from the companies will improve the brand reputation and will prove profitable to the company itself. Gap and Zara were recently exposed for using toxic materials in their garments. People took to the Facebook and Twitter pages, furiously demanding change. Ignoring such protest makes the brand reputation worse. So it is better to listen and address their complaints
You may think how transparency will affect business success? The reason is, it is a key component of employee engagement. Let’s take an example of Qualtrics and discuss the effects of adapting this concept on the company.
1. Employees have clear idea about their contribution to the company as a whole
If transparency is not maintained; employees may not have a clear idea about how their work fits into the big picture. By being transparent, employees can identify their involvement in accomplishing the company’s mission and vision. They can work accordingly to increase their input and get a better output.
2. Minimizing distractions and maximizing focus
Employees won’t be distracted, looking for information about other’s work and performance. At the commencement of each quarter, all Qualtrics employees set observable and considerable objectives and key results. Progress and priorities of each employee are clearly set. So employees can tick their checklist and can stay fully focused.
3. Employee engagement
Such transparency increases dedication and motivation to the organization’s mission for the reason that employee information clearly relates to their performance, which ensures a high level of fairness. The sense of real fairness and equality can be really rewarding to their brains. And the idea of managers not being fair can infuse negative thoughts in their minds. Every individual is ranked on the basis of performance and all the information is accessible for analysis and assessment. Thus, all employees are rewarded accordingly. By implementing such practices, employees can take control over their career growth and will lead to increased engagement.
4. Model the strategies of the best
Newbies at Qualtrics stay motivated by analyzing the achievements of the best performers. They can compare their own work with the top performers and take on some strategies to excel in their work. Such mirroring is extremely helpful in promoting constructive work performance.
5. Reward only the deserving one
By being transparent, companies make sure that only top-performers get rewarded and not someone who is just good at convincing others to think that they perform well. Besides, it would be easy to judge the consistent performers with the help of such transparency.
Qualtrics is aware about people being categorized into winners and losers by using this technique. And this might be a challenge for a person who is not on the list of “A players.”
Matthew Bellows, the founder and CEO of Yesware has promoted transparency in startups. He explains how to use such transparency to your advantage. Bellows suggests keeping the doors open, literally. He says, “If you and your team discuss for hours, without letting in the employees, they will feel left out and make things up. And rumours are never better than the actual mess.” So, opt for transparency instead. Discuss anything and everything with the employees and consider their viewpoints too.
There comes a down point in every business. And anxiety is obvious when you are dealing with people’s career, especially in case of gossips about company’s possible layoffs. The fear of elimination distracts the employees and they cannot risk working with the company anymore. This results in employees looking for a new job, updating their resumes along with their LinkedIn profiles. During such time, employers should replace the rumor with open communication. Employees should know that they will hear it from the employer if there is something to worry. Bellows suggests to put boundaries too, while being transparent. When the company size increases, there might be too many people who may keep their views on some matter, even when they are not qualified to do so. Transparency without knowledge is not powerful. In such cases it can be really harmful to the organization. After all, companies are not democratic, and as it increases in size the less democratic it should be.
Marc Effron, from Talent Strategy Group reports that there is an absurd fear of transparency among organizations around the globe. Leaders seem to be concerned that performance may degrade if an individual is told the truth about their capabilities and potential. However, he asks a fundamental question – How long is it appropriate to sugar-coat matters about their potential and career growth? Effron also mentions that many executives are really ready for stricter transparency measures.