As companies place more emphasis on diversity, equity, and inclusion in the workplace, there is a call for transparency. Between 1979-2022, workers’ productivity in the United States increased by 61.8% while the hourly pay has only increased by 17.5%. Americans are working harder without commensurate compensation.
Pay equity is one of many ways employees are calling for transparency, which is leading organizations to rethink their norms around how information is shared.
In BETA’s February e-Newsletter, I noted, “Although financial rewards are nice, welcomed benefits, employees whose work involves cognitive or creative skills are not motivated only by the Benjamins. More often they stay because their work and the people they work with brings meaning to their life.” And while employees might not stay with a company because they are offered more money, transparency gets to the root of the matter, the salary.
From an equity perspective, employees are calling for more transparency on pay equity and transparency, where salary ranges are noted for all positions. Sixty-eight percent of employees report that they would switch jobs if their new employer offered great pay transparency, even if their job responsibilities and salary remained the same.
A lot of valuable energy is wasted on managing impressions. As a society, we have become accustomed to managing optics, which leads to not frequently telling our full and complex stories. We’re worried about judgment and the repercussions of being completely honest. It takes time and humility to have authentic connections that promote greater systemic transparency – reinforcing trust – where we engage with each other in cooperative networks.
Being transparent for transparency’s sake is not helpful unless there is a clear understanding of what about it is necessary (important) as a personal value or a business imperative. Businesses that are the most transparent in the way they report results to achieve higher performance, expose unintended gaps in their systems, reduce business risks, and spark healthy discussions.
Humans are complex and perfectly imperfect. Transparency is neither a quick fix nor a universal solution for authentic connections. It has been shown that complete transparency may decrease constructive reciprocal behavior, and may increase distrust, focusing too much on outcomes that lead to misrepresentation.
Although we highlighted a few dark sides to transparency, overall it is a good thing when the shift of knowledge is facilitated, trust relationships are enhanced, and authentic connections are fostered. When embedded in psychological safety, trustworthiness, and cooperation then the focus shifts to respecting the uniqueness of all the parties, positively influencing each other values, and encouraging transparency.
As you think about when to be transparent, perspective-seeking is a critical skill to hone, and talking with people to gain insight into the nuances of their views can be helpful. Centering confidentiality is important when asking others to share about themselves to ensure privacy when creating safe connections.
There are moments that can be governed by an ethic of care, which asserts that caring relationships are natural for human beings, which calls us to care for each other in an equitable way. These are moments when we ask, “how do we wish to treat each other? And does that mirror echo the greater values of the society or do we live by an alternative set of values?” I am not naïve to think that giving away organizational processes in the service of transparency is the way to go. Yet this is not an all nor nothing proposition. In BETA’s April e-Newsletter we highlighted The Third Way when faced with polarities – where we integrate the best of each side of the coin. Even this binary way of thinking might be limiting in capturing all the nuances, yet it is a start.
Reinforcing trust is a critical sweet spot in the transparency paradigm. Leaders can improve transparency within their organizations by
- Consistently communicating the company’s vision, mission, and values, while making themselves known.
- Encouraging employees to speak openly by not embedding structures that inhibit honest and direct communication often comes more naturally when senior leaders model this behavior.
- Transparent reporting about effective governance in an organization, such as pay scale, hiring practice, and promotion metrics.
- Sharing the information with stakeholders and explaining how they are acting on them.
I also noted in last month’s e-Newsletter that data does not provide insight. The relentless tide of data will only get stronger, and the power of big data is here, influencing openness and transparency. Every data set is telling a story, and organizations and individuals will need to determine what side of the conversation they support.
Transparency is not a universal solution, yet the benefits outweigh some of the challenges. Being transparent allows information to surface that increases accountability, improves perspective-seeking-taking skills, promotes fair decision-making, and signals mistakes are tolerated as opportunities to learn. Overall, transparency is a good thing when trust, psychological safety, balanced power dynamic, and collaboration are incorporated into the process. Transparency illuminates inequities and the systems that perpetuate them.