Following the Enron scandal, in which stockholders — including employees — lost their investments, lawmakers passed legislation requiring publicly held companies to be open about their financial dealings.
Glass-Steagall and Dodd-Frank are the most notable acts requiring financial transparency. These laws take care of the public’s right to know. But what about internal transparency? Should organizations have a responsibility to keep employees informed about operational goals and strategies?
There are no mandates for internal transparency, but studies show openness is what employees say they want and need to be productive and engaged in the workplace.
What one study revealed
BetterWorks’ Employee Sentiment survey found that a staggering 92% of workers said they would work harder if they knew what their company’s goals were.
Kris Duggan, BetterWorks’ CEO, told HR Dive that this response was one of the most surprising. His firm provides enterprise companies software for raising performance based on goals, employee feedback and other data. BetterWorks teamed with Wakefield Research to survey 1,000 fully employed adults.
“When employees know what projects their co-workers are working on, everyone can focus on getting the right things done,” said Duggan. He added that the approach is effective for not only promoting teamwork, but also for getting cross-team cooperation, such as marketing and IT working in unison.
Another surprising result was that most employees, 64%, didn’t think goals in their company were transparent. Duggan said goals generally are not public in most companies, which he said is why the company commissioned the study.
“We had already assumed the outcome – that employees weren’t satisfied with their company’s level of transparency. The survey results just affirmed our assumptions,” said Duggan.
Gender differences were notable, but somewhat conflicting. While 50% of women surveyed said they would be inspired to perform better with more recognition for their efforts, only 39% of men agreed. Yet, men’s responses to other survey questions suggest that recognition might be just as important to them as it is to their female coworkers.
Duggan said this quasi-gender disparity signals to employers that they should consider the differences among employees to find a collective resolution toward becoming more transparent.
So why don’t companies instinctively know that transparency is necessary, when their employees already have the problem figured out?
“Leadership is following older ways of thinking,” Duggan explained. “We want to modernize companies – get them to be more open and collaborative.” He said that even two of BetterWork’s more traditional-thinking clients realize they need to operate more openly.
What HR can do
When asked what HR can do in 2017 to advance transparency, Duggan said the new year is a perfect time to start focusing on making goals more open and transparent.
“HR should be thinking about giving employees more frequent and continuous feedback and ban once-a-year performance assessments. After 12 months, performance evaluations are less useful,” said Duggan.
In fact, 80% of employees in the survey said annual performance appraisals weren’t helping improve their performance.