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Much has been written recently about the relationship between employee engagement and workplace transparency. At its simplest, workplace transparency is open communication between leadership and employees.
The growing consensus about the link between engagement and transparency was well expressed by BambooHR:
"A transparent company culture contributes to higher employee satisfaction, better retention, and a stronger brand reputation overall. Achieving a culture of honesty and openness between leadership, managers, and employees should be every leader’s priority."
Engagement at work is the center of the relationship between a company and employee and is reflected in employee retention, motivation and positive business culture. In this article, we will explore the balancing act between open communication — the information shared publicly between employers and their employees — and what might be better kept outside the glaring floodlights of total transparency.
Where a Little Transparency Would Help
Employee engagement is the outcome of a broad spectrum of factors, both positive and negative in their impacts, with workplace transparency being only one. However, it may play a role in almost every other aspect of engagement.
For example, some factors are blatantly negative, like the overtly toxic workplaces experienced by one in 10 U.S. employees, according to Donald and Charles Sull. The same research, a meta-analysis of other research, found that leadership and social norms were the leading predictors of a toxic culture. The researchers state that leadership and social norms are “densely intertwined.” Transparency in this case — in the form of employees calling out the toxic behavior of coworkers and leaders — may help, but probably only after senior leadership's aggressive push to detox the culture.
Burnout has remained at the forefront of the discussion about engagement, even as the pandemic has abated. In 2022, Humu surveyed over 200 U.S. managers and found that 44% reported reducing burnout among their top three priorities. The progressive sense of exhaustion and emotional detachment are directly reflected in growing disengagement and lost productivity. Transparency between employees and management about stresses leading to early signs of burnout is essential.
The push for a return to the office is a poster child of corporate leadership doing badly at company transparency. Whatever perspective on the controversy about RTO you side with, it’s difficult to praise the waffling of many CEOs on the topic and the apparent indifference of many companies to the questions raised by workers.
One of the overarching aspects of employee engagement is trust: in leadership, generally, and managers, specifically.
Many recommendations have been made for leaders and managers to create an environment of trust and, therefore, higher engagement and, from that, higher productivity, innovation, and growth. Toxic workplaces, burnout and the RTO mess stand as counterexamples to creating environments of trust.
The dynamics between leaders and employees is inherently asymmetric when it comes to transparency, since the company cannot legally share many sorts of information with employees (like M&A activities, union negotiations and company-wide policies that have yet to be completely worked out). But to the extent possible, modern management theory is based on the understanding that being open with the rank-and-file is conducive to engagement and all that it engenders.
A high level of engagement comes from trust, and transparency by leadership can foster trust. However, leaders decide what and how much to share with their teams (and are legally bound to hide certain information from the company). Employees may provide feedback, recommendations and new ideas to improve business processes. Still, they are also the subject of another sort of involuntary information sharing, which they may have little control over.
Related Article: What's Trust Got to Do With It?
The Double-Edged Sword of Transparency
Organizations have access to the “work exhaust” of employees: when they arrive at the office, how much time they take for lunch, what's in the background of their Zoom calls working from home, what task they are working on in Asana.
Almost every communication tool has two sides. First, the primary function — such as Salesforce being used for the selling process — but also a secondary capability: keeping track of what people do at any time of the workday. In the name of “productivity,” companies have set up surveillance systems:
I would like to erase the word ‘productivity’ from our discussions. Oftentimes when we’re talking about productivity, it’s coming down to monitoring… we’re tracking how many times have you logged in, how many emails you’ve sent, are you green on Slack? That idea is rooted in the industrial revolution; it’s not modernized to represent actual business results or employee output. Do I believe that employees should be measured on results? Absolutely. Do I think productivity is the best way to think about it? No. To me, ‘aligned,’ ‘motivated,’ and ‘clear on results and impact’ are far more important than ‘productive.’
There are ways for companies to demonstrate that they trust their employees by providing greater degrees of privacy in their everyday individual and team work. This shows that they are trusted to use that private space and time for the company's benefit and are safe from intrusion until they choose to share their work.
This complements the idea of “working out loud,” where individuals and teams share status information about what they are working on, decisions made and issues that may be blocking progress. But they get to decide what to include and what to reveal.
In 2014, organizational psychologist Ethan Bernstein published breakthrough research on the need to create 'zones of privacy' within open environments after determining that fully transparent organizations leave employees feeling vulnerable and exposed. As he characterized his findings,
Here’s the paradox: For all that transparency does to drive out wasteful practices and promote collaboration and shared learning, too much of it can trigger distortions of fact and counterproductive inhibitions. Unrehearsed, experimental behaviors sometimes cease altogether. Wide-open workspaces and copious real-time data on how individuals spend their time can leave employees feeling exposed and vulnerable. Being observed changes their conduct. They start going to great lengths to keep what they’re doing under wraps, even if they have nothing bad to hide. If executives pick up on signs of covert activity, they instinctively start to monitor employee behavior even more intensely. And that just aggravates the problem.
He detailed four zones of privacy:
Boundaries around teams: zones of attention — that suppress exposing team members' actions to the scrutiny of outsiders. One of the examples he cites is a team of workers on a Chinese factory floor whose productivity grew by 10% to 15% after curtains were placed to conceal them from others' view. By concealing what was going on to outsiders, transparency within the team went up. He states,
By shielding employees from observation, the curtains supported local problem-solving, experimentation, and focus. But within the curtains, work became much more transparent. Partly for that reason, defects remained extremely low, even as throughput rose. And over time, the camaraderie within boundaries made the workers more likely to share — as a group — their privately worked-out solutions with other lines.
The same holds true for other sorts of companies and digital openness, not just exposed workers on a factory floor. He discusses the same effects for hospital staff and game development, like at Valve.
Boundaries between feedback and evaluation: zones of judgment — An increasing amount of data is available about performance, and people are concerned that such data will be used to evaluate them. At the same time, people are generally eager to improve their skills. They are open to the data about performance being gathered so long as it is available to them for feedback but not used punitively.
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Bernstein uses the example of a large U.S. trucking company that installed a so-called DriveCam on each truck's windshield, gathering data and wirelessly transmitting it, and displaying a green light indicating to the driver all is well. When a 'g-force event' occurs, it blinks red and green, helping the driver in real-time. But that information is only used by the company in the case of damage or willful breaking of the law, like texting while driving. Initial concern by the truckers slowly shifted into an appreciation of the feedback when used only personally or in coaching sessions.
The digital equivalent might be for companies to share personal and group “productivity” information only to individuals and teams, except when they request coaching. Then the information would only be shared with coaches, not management.
Boundaries between decision rights and improvement rights: zones of slack — Deciding who gets to decide what is a critical management role. But when organizations don't involve employees in decisions, as Bernstein points out, it "can leave other people in the organization feeling voiceless." Failing to grant the right to make improvements to those without decision rights — forcing them to conform and comply with from-on-high decisions — leads to decreased innovation. This is the tension between those with decision rights, who benefit from transparent information, and those who want to be able to innovate in some degree of privacy. Bernstein uses musicians as an example:
The visibility created by transparency conjures up self-consciousness and inhibitions. That’s why musicians perform in front of an audience but practice without one—they need privacy to noodle and make discoveries. So, the right level of transparency—and thus oversight—depends on the activity and the observer.
Smart companies, therefore allow slack in their operations so employees can 'noodle' about processes and products and tweak things like schedules at a local level.
Boundaries around periods of experimentation: zones of time — Walling off defined blocks of time to experiment is another way to encourage and leverage the first three zones.
An example Bernstein shares is the bicycle manufacturer Giant, where CEO Tony Lo granted time-limited decision-making authority to Bonnie Tu to develop a line of business to meet women's needs better. In six months, she launched a store in Taipei for women, which was profitable in record time. Another example might be Google’s infamous 20% time, where Googlers could explore new ideas within the 20% time constraint.
Related Article: Is Responsible Employee Surveillance Possible?
Getting in the Zone
Leadership seeking greater engagement through workplace transparency have to balance the impulse to have access to all information with the need for individual and group privacy. Applying Bernstein’s zones of privacy to communications, information sharing and work policies gives people privacy while doing their work, to gain insight through non-punitive feedback, to gain autonomy through widening decision rights and improvement rights, and room to experiment.
Honoring the need for these zones can lead to higher levels of trust: the company demonstrates trust for its employees, and the employees are freer to innovate and provide improvements. The evidence shows that this also leads to higher productivity despite the time directed toward experimentation and thinking.
But the best result is greater engagement. Allowing more privacy as an adjunct to company-wide transparency may seem like a half-measure. Still, it’s perhaps better to consider the two as complementary, like the way we balance our “deep work” (when we work alone, and uninterrupted) with “group work” (when we come other to coordinate, make group decisions, and plan).
Paradoxically, workplace transparency can only achieve its goal of engagement by leaving room for productive privacy and the trust necessary to allow it.
