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Why Transparency is Good For Your Business

by Michelle Fleckner / January 25, 2018

How Transparent is Your Organization?

Transparency in a business organization is important for long-term success, especially when times get tough economically. The more transparent your business can be with middle management and the rest of the employees the more dedicated your work force will be. It is hard to convince a group of employees to do something if they do not know why they are doing it. Transparency also breeds more creativity. If your employees are not aware of the problems or issues that the business is facing, they cannot come up with a creative solution to remedy that problem. Organizational transparency keeps everyone on the same page and working toward one common goal. 

Alignment at the Top

Before full transparency can be achieved, the upper management team of your business needs to make sure that they see eye to eye regarding the business' long-term goals and strategies. More importantly, the top-level people in your organization need to have a unified idea about what success looks like. Aligning the top group of employees is essential because everything is going to trickle down from them to the rest of staff. The more aligned your upper management is, the more transparent you business will be. According to PayScale's 2017 Compensation Best Practices Report (CBPR), 49 percent of organizations were aiming for transparency in 2017, sharing more about philosophy, practices, etc. 


Organizational transparency requires communication above everything else. First, upper management, who are constantly knee-deep in big-picture problems, need to communicate these big picture organizational issues with middle managers. Although middle managers focus on in-the-moment issues, they need to have a decent idea of what the business is facing on a larger scale. Communicating these issues, concerns, goals, and problems that upper management sees to middle management is essential for transparency and business success. Ideally you want your employees to understand the big picture and the implications of the decisions that effect this larger vision. A recent survey from TINYpulse states that only 42 percent of employees know their organization's vision, mission and cultural values — an alarmingly low number. 

Another key component of communication is making sure that all major decisions made by the organization are clearly framed in economic terms. How does this decision effect the business economically? Explaining to your employees how a decision to hire new talent, increase a salary, buy new equipment, etc., positively impacts the business is essential. Additionally, it is imperative to make sure that employees, middle management, and upper management know the real cost of mistakes or closures. By contrast, it is also invaluable to show the positive outcome when things are done in a more effective manner. Citing data from a 2016 survey, it shows that 25 percent of privately held companies say they share their financial information with all of their employees. 

Finally, if you want to be successful in communicating with your employees, you need to put practices into place to make sure you are adequately communicating everything with them. This could be a regular email, newsletter, team meetings, etc. Making communication a priority and implementing ways in which vital market, business, and industry information can be shared and explained to your employees on a regular basis is priceless. Communication is the key to transparency. 

Bad News 

Inevitably there is going to be bad news that has to be broken to the employees. If you want to foster an environment of transparency and trust, you need to make sure that you break bad news immediately. Do not go around behind closed doors and sneak around. This is just going to create an air of distrust between upper management and the employee base. No one likes bad news, but it is far easier to accept if you are treated like an adult and respected as a member of the organization. 

Transparency requires open and honest communication. Transparency can make your business more productive and more efficient. According to TINYpulse, transparency is the number one factor in contributing to employee happiness. Does your business pass the transparency test?

Check out Platinum Group's free HCM and Business Enrichment Webinar Series featuring local and statewide professionals who offer valuable business insight into successful business practices. View the recording of our webinar, "Handling Conflict - What's Wrong With You" presented by Jonathan Brake, In2Great. 


Platinum Group is a full service human capital management (HCM) resource that allows businesses to manage their payroll, benefits, compliance, track time and attendance and other various human resource functions in a way that maximized efficiency and eliminates redundancies with the platform, iSolved. For more information about Platinum Group or to schedule a demo of iSolved please visit our website. 

Platinum Group is headquartered in Asheville, NC with locations in Charlotte, NC; Greensboro, NC; and Raleigh, NC.

Tags: Payroll & Human Resources workplace communications Company Culture

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Michelle Fleckner

Michelle Fleckner

Michelle joined the team in 2017 as VP of HCM Solutions. Her interest is in helping companies identify areas where streamlining and automating would benefit their HR & Payroll departments. Her strengths are organization planning, revenue generation, customer retention & business process automation.