Transparency in the workplace has many benefits. When companies are transparent about goals and objectives, everyone can work towards the same targets. Employees who feel informed about company decisions are more likely to be productive and loyal. According to a Harvard Business Review study, 70 percent of employees feel most engaged at work when they receive prompt updates about company strategy. Feeling trusted with valuable information makes them feel empowered to share ideas and collaborate.
Transparency is a key feature of Scrum, a popular project management method. According to Jeff Sutherland, CEO of Scrum, Inc., “In my company, every salary, every financial, every expenditure is available to everyone.” Many would describe this level of transparency as radical.
A recent article in Forbes defines transparency in the workplace as “the practice of being open and honest with others, no matter how challenging it might be.” This hints at some of the downsides to workplace transparency. For many people, information overload is distracting. Sharing too much information can slow down productivity, especially when teams are on tight schedules. Too much transparency can contribute to the dissemination of doubt and confusion.
For some team members, an elevated level of visibility to management can inhibit creativity. This is when transparency in the workplace can really backfire, with team members fearing management scrutiny. Some develop evasive behavior that hurts productivity. Sharing details about performance reviews and compensation is another tricky area where transparency can lead to unwanted workforce disruption.
In many companies, complete transparency would be bad for business. Confidentiality may be needed regarding trade secrets and competitive information. In some cases, members of the same team may have various levels of knowledge about sensitive data.
How do companies know the right level of transparency for their workforce? Ethan Bernstein, a professor at the Harvard School of Business, studied the effects of transparent work environments on company performance. He found that too much transparency can leave team members feeling vulnerable to attack. They may hide their work as protection and may give up any type of experimenting that deviates too far from the norm.
Bernstein also discovered how some organizations overcome the transparency pitfalls by setting up zones of privacy. Information can circulate freely within a zone but should not cross the zone’s boundaries. Bernstein saw that privacy zones were often set up around teams; around the feedback and evaluation process; around process improvement; and around time.
Team Privacy Zones
Team privacy zones allow team members to experiment and collaborate in a safe environment. They can feel secure knowing their work won’t be seen and judged by executives, managers or members of other teams until it’s ready.
Judgment Privacy Zones
Judgment privacy zones separate real-time performance feedback and the formal evaluation process. If team members worry their manager will use informal feedback against them, they may waste time trying to limit their exposure. Limiting informal feedback to a team member’s peers opens the door to self-improvement free of managerial oversight.
Process Improvement Privacy Zones
Process improvement privacy zones mean anyone can propose changes to a process or product, even if they are not a decision-maker. Being open to improvement ideas from any source takes decision rights out of the hands of a few people, encouraging creativity from every member of the team. This privacy zone also clarifies who can make decisions about proposed improvements.
Time Privacy Zones
Time privacy zones give team members and managers the opportunity to learn, grow and innovate away from the grind of daily responsibilities. Putting boundaries around time supports experimentation, even for those who feel too busy to do anything but their assigned tasks.
Striking a Balance
Like many aspects of business operations, transparency isn’t an “all or nothing” effort. There are clear advantages to transparency in the workplace, but not when it’s exercised without discretion. Make sure you consider all the pros and cons of transparency before making changes.