What Isn't Off Limits When it Comes to Transparency?
The discussion of this month's column on corporate transparency to employees made it clear that we have reached a point at which disclosure of pay information in organizations is no longer much of an issue. The message was, "Find a way to do it," with some cautions and advice about how to make such information available to all.
For example, Praveen pointed out that, "It is essential to have a culture of mutual trust but we also need to have mutual respect. Transparency on salary details … without the proper perspective to interpret/appreciate the information can (produce) negative energy that is avoidable…." Peter Lee echoed the thought this way: Management must "work to improve trust before emphasizing transparency; transparency without concurrent levels of trust almost always cause(s) problems."
Nevertheless, there was enthusiasm for disclosure, perhaps using a system of disclosing "pay bands" within which holders of specific jobs are compensated.
Pete described a specific example this way. "Back in the 90's Digital Equipment Corp. had a unique way of allowing personnel in the business to 'roughly' understand what a person was earning…. Each role was assigned to a pay … range. The greater percentage of that range was awarded dependent on performance, benchmarked through goals and objectives agreed earlier in the year and an in depth 720 review feedback." This system promoted a high level of collaboration—"(It was) brilliant!" P. A. Chacko said that "pay bands and the roles/designation levels which are mapped to each … may start facilitating aspirational endeavours."
Kristin Wolfe reminded us that systematic pay disclosure could address other problems in today's workplace. She commented that, "Salary transparency within peer groups is the most expeditious way to bring an end to the gender wage gap that exists in every country in the world… (it) will certainly be the catalyst for a very different—-and long overdue—conversation in the work place."
Others addressed the more general question of who or what should determine the limits of transparency in an organization. While there was an acknowledgement that not all things can be disclosed, confidentiality was seen as a potential means for covering up decisions and avoiding confrontation on potentially sensitive issues. Although, as Phil Clark put it, there are times when information must be held confidential, "What I have seen is the restriction of information to cover a multitude of power decisions or incompetence. That is a crime against the workforce and a company." Laurence Rohde added that "not being open and honest has been the downfall of many American businesses." Vishwanath Pujar commented that, "each organization should have an internal 'right to information' policy where any kind of information is available to an employee on demand which is deemed as justified by a panel…."
What isn't off limits when it comes to transparency? What do you think?
When Sony was hacked recently, most observers concentrated on issues of criminality as well as inappropriate leadership behaviors that may have arisen because executives assumed that their private email would not be made public. There is another angle to the incident, however. It can be viewed as an extreme example of corporate transparency, however unintended it may have been.
Personal transparency can be thought to end where privacy begins. Looking at it this way, privacy has been losing ground rapidly with the ascendancy of big data and the Internet of things. The retreat of privacy has been aided by personal use of networking apps like Facebook, Twitter, and YouTube, search devices provided by Google and others, and the hosting of cookies on our personal computers. In an effort to shape our individual images through the use of networking devices, we are nevertheless disclosing many things about ourselves that can be employed by clever marketers in ways that appear to violate our privacy. How many of us utilize convenient free services on the Internet? How many of us have then received offers for products that we didn't yet know we needed?
Organizational transparency today most often is associated with good management practice
There is a movement afoot to thwart personal transparency. The market for encrypted phones and other devices that aid in preserving personal privacy is growing rapidly. Encryption may even become the next major privacy issue as governments step in to attempt to limit its use on the grounds that it makes it more difficult to track and observe actions of terrorists and criminals.
Organizational transparency today most often is associated with good management practice. It is thought by some to generate the trust that fosters everything from cooperation to speed in decision making and execution. It forces managers either to deal with contentious issues up front or avoid them altogether, assuming that their actions (and possibly even their motives) will become known later. It appears that some organizations are shifting control of "need to know" policies out of the hands of managers, as was the case in the past. Instead, employees define what they need (or would like) to know.
One specific issue of organizational transparency arising with increasing frequency is whether or not salary and wage information should be shared by all members of an organization. It may in part be a reflection of the changing nature of the work force and the acceptance by younger employees of less privacy. It is related as well to concerns about equal pay for equal work. Those in favor of sharing compensation figures cite the benefits of more trust among employees, less misinformation about pay, and a clearer basis on which employees can make job decisions. Those opposed mention more tension and envy among employees as well as a greater burden on managers sorting out complaints about pay.
Should all pay information be shared in an organization? What do you think the effect would be on such things as trust and productivity?
Thinking more generally, should managers or employees determine what needs to be known by members of an organization? What are the limits on transparency in the workplace? What do you think?
To read more:
David Card, Alexandre Mas, Enrico Moreti, and Emmanuel Saez, Inequality at Work: The Effect of Peer Salaries on Job Satisfaction, 2011.
Edward E. Lawler III, Rewarding Excellence: Pay Strategies for the New Economy (San Francisco: Jossey-Bass Publishers, 2000).
Alina Tugend, Secrecy About Salaries May Be on the Wane, The New York Times, August 23, 2014.