To Maximise True Employee Engagement, Leaders Need to Turn Up the Transparency Dial

“Transparency in business can be described as an honest, two-way openness between employees and management. When transparency is part of workplace culture, it comes along with trust, communication, and greater levels of employee engagement and advocacy,” according to Darren Perucci. “Without transparency, employees may feel underappreciated, apprehensive about the future of their employment, and doubtful of the management practices in place or the decisions made by those in positions of authority. Company leaders can act with transparency by making sure their employees are kept in the loop about matters regarding the company — big or small. Management can share decisions with employees and explain why those decisions were made, rather than laying down the law.”

Other practical advantages can result from transparency in policies and practices, according to Perucci: a stronger workplace culture, an increase in employee engagement, and improved communications and customer relations. Overall, this openness can also lead to a more financially enhanced bottom line. All of these beneficial outcomes are desirable for leadership and shareholders alike.

However, the hard truth is that opaque management policies and practices still exist and do not serve to achieve any shareholders’ goals. Safeguarding self-interest and favouritism prevent an organisation from attracting and hiring the right talent, developing the right workforce, maximising engagement, and growing the right business. For positive outcomes to occur, companies need transparent management policies and practices that are empowered by transparency in leadership, technology, and governance.

Technological advancement, not voluntary leadership, has indirectly driven the movement toward greater transparency. Every field has witnessed three factors that have added to the momentum: the need to boost productivity, to increase efficiency, and to improve return on capital invested. As it has pushed the boundaries of maximising business profitability, technology has also transformed the rules of collaboration, competitive advantage through the democratisation of creativity, and the dynamics of sharing outcomes.

And Yet, Reluctance Abounds

Despite the obvious benefits, the process of managing rewards, promotions, career development, recognition, performance reviews, and hiring is, unfortunately, anything but transparent in many organisations. One reason might be the fear of vulnerability — of someone saying or doing something that hurts the business — that makes transparency sound riskier rather than rewarding, according to Rob DeLuca. Further, the foundation for vague policies and practices is a framework of biased decision-making that is driven by self-interest and favouritism behind the scenes to support one ultimate goal — acceptable results with minimum risks — serving all the players who share the same vision.

Exacerbating the problem is the fact that not all stakeholders empower, or believe in, this movement toward openness. In fact, the opposite holds true in many organisations, with the result that non-transparency triggers huge hidden costs from wasted resources, finances, and time for all — expenditures that many leadership teams might not be able to evaluate or recognise but that limit the individual and organisational potential to outperform. Nevertheless, hidden or not, recognised or ignored, this cost is one that all of society continues to pay. But it does not need to be this way. Genuine leadership has the ability to accelerate this transformation for the betterment of everyone involved.

The big question is whether we should continue to allow non-transparency in management policies and practices. Shouldn’t we, instead, be proactive and use all the tools and approaches in our possession to stop the bleeding away of time and money? Wouldn’t that make sense? Of course, but first, it is important to take a deeper look into why the status quo has such power. Consider:

• Why do shareholders not demand that leadership implement change in order to gain a better return on their invested capital?
• Why do governments discourage more transparency as a rule in organisations by adding more bureaucracy?
• Why is management unwilling to focus and invest in tools and approaches that will bring more transparency into their practices, along with the potential for more rewards?

The answers to these questions can provide clarification and a faster road to progress. For one thing, changing the status quo requires energy and will power, which must be gathered, nurtured, and shared. After all, it is far easier to let “sleeping dogs lie” and leave the responsibility to someone else.

But whether leaders, organisations, or governments continue to resist the movement, change is inevitable and will eventually overcome resistance. The best action for employers, leadership teams, and their employees to take is to get on board now and prepare the organisation for that transformation. Saying “no” to mediocre results, leadership, or individuals is a good first step and offers the promise of better outcomes. Saying “no” to bad and mysterious practices and policies cultivates transformation. Saying “no” to mediocracy in the organisations you invest in, lead, or work in, while focusing on how you can outperform, is the clearest route for positive outcomes in the long run.

Why Opacity in Policies and Practices Fails

Practical examples abound to confirm the failure of policies and practices that are non-transparent. Consider the following scenarios.

1) You and I have a very good “relationship.” Then — through the opportunities provided by non-transparent policies and practices — I promote you, pay you a bit more than others, hire you over others who are just as qualified, help you obtain exposure to leadership in order to support your career development, and act in other ways to assist you.

Why would I take such actions? Not because you are the best fit/talent among others in (or external to) the organisation, but because I know you will support me and the ultimate goal, posing no risk to me or the goal in the future. Another reason for boosting your chances of success is that maybe, just maybe, you can help me in the future with something else. Sadly, this vicious cycle goes on and on, reinforced by endless rhetoric and politics.

2) As a manager or recruiter, you hire a person either from within the company or from an external source, sincerely believing that this person would perform well. However, it soon becomes obvious that you made a bad hiring choice. Initially, because you said “yes,” it now becomes even more difficult to say “no” and to admit that you made a bad decision. Naturally, it is not easy for many people to accept that they made an error and, worse, by declaring that truth, potentially expose their faults and possibly place themselves personally at risk. Faced with this situation, the majority of people are likely to ignore the situation and hope that this bad choice will somehow disappear.

But until, and unless, that happens, this non-transparent mistake will continue to cause collateral damage in the organisation because you are afraid or uneasy about being open and saying “no,” even if it is to the detriment of company performance, just to save face. By not being honest with yourself and then with your actions, you become the reason for a certain amount of unnecessary inefficiency, wasted resources, and unspoken collateral damage for your organisation. Eventually, your leadership team, colleagues, shareholders, suppliers, clients, state, and even the community will pick up the bill for that negative result. Although no one will actually hand you the bill, payment is unspoken, unrecorded, and invisible — and you are not held accountable for your irresponsible behaviour.

How to Truly Maximise One’s Human Resources

Leadership should always focus on the importance of optimal resource allocation in ways that will garner and sustain the most profitable results in terms of revenue, shareholder expectation, and employee growth. Throwing money at traditional human resources systems and approaches that have been proven to fail or temporarily succeed until removed from the equation (e.g., short-sighted reward programmes) is not the answer to ensure sustainable alignment of employees with corporate strategies and goals.

That said, the answer lies elsewhere. A key ingredient of success for the leadership team is getting to know and understand the true needs and desires of the workforce through transparent communication — and, ultimately, transparent policies and practices. Possessing and using this knowledge appropriately, in conjunction with stating clear company goals, is a requisite for long-term viability.

Yet, many leaders fail to understand the real needs of employees or often overlook their true intentions and desires. This lack, unfortunately, can lead to the long-term detriment of the organisation, countless unnecessary inefficiencies, and a significant risk to its survivability and success going forward. To truly maximise returns on people, leaders should focus on investing time and effort in the following five areas to facilitate sustainable organisational growth and to outperform competition — while simultaneously engaging with, and motivating, their employees.

1)?Invest in Transparent People Management Practices.?Many organisations face a serious issue that involves the lack of transparency in people management practices with regard to calculating actual costs or, indeed, making little or no attempt to search for the true impact of non-transparent decisions. Such opacity triggers extensive hidden costs that typically take the form of wasted resources, financial expenditures, and lost time for all parties — from the employee to the leadership team to shareholders — thereby adversely impacting the organisation and its stakeholders. Hidden or not, these costs take a toll on all of us as we continue, over and over, year after year, to suffer the consequences.

The more transparent organisations become in their talent management practices, the more opportunities they have to outperform, and outperform well. The only way to make people management more transparent is by becoming more transparent in the decision-making process. Business leaders need to be more open and honest in objective setting, performance reviews, career development, engagement, reward decisions, promotions, and so on. When these practices are mysterious or too complicated to be explained in a clear manner, companies will never achieve any real progress in maximising returns on people. In effect, management fairy tales will continue to prevail and remain a significant barrier in efforts to improve organisational performance.

2) Focus on the Small Data (Common Sense) to Get the Big Picture.?In a world where data is abundant, the best thing is to learn how to find, choose, and use the information that is relevant to what one is trying to achieve. Relevant information should be unbiased, objective, and advantageous for all stakeholders. Although relevant information always stares us right in the face (in the form of common sense), perversely, we have an enormous ability to ignore it because of our self-interest.

That recognition may explain why we have so many leaders “who know, but don’t act.” Instead of spending an enormous amount of time and money to justify what they think is true with big data, leaders should instead focus on listening to the true and sincere stories their people tell them — whether the information relates to unfair policies, mismanaged units, or other work-related issue. These truths are less costly, more efficient, and amazingly reliable on the aggregate.

3. Build Trust Among Your People, and Don’t Throw Their Trust Under the Bus.?Trust is a very difficult currency to earn, and you typically own it once. Not many people know how to earn it or, perhaps, even what it entails. Not only does it take time to build trust among people, but it is also very easy to lose if you don’t know how to invest it, especially when it comes to building trust with employees — through, for example, non-transparent or deceptive policies and practices.

Beyond earning and keeping trust is another significant issue: the misuse of that hard-earned trust. If you share a good relationship with your employees, and then neglect and/or misuse their trust, it is almost impossible to regain it. Once you break the “trust contract,” no matter what attempts you make afterwards to prove trustworthy, you will have to make an enormous effort and expend significant resources. And even with that endeavour, the attempt may fail. People are slow to trust again (understandably so) once they have been “burned” by so-called trusted individuals, particularly leadership. Understanding this point about human behaviour, managers should keep in mind that it is an essential trait of successful leadership to cultivate, earn, and retain employees’ trust.

4. Don’t Tolerate and Unknowingly Reward Self-Interest.?Nothing good typically emerges from serving the interests of only a few individuals rather than the common good. A business is no exception and should be based on the interest of all stakeholders rather than the self-interest of a few leaders or other significant parties. This approach is the only way to mobilise the efforts of all contributors to maximise returns for all. After all, if only a limited number of people benefit from organisational activity and policy directives, the resulting impact on the majority of the workforce is likely to prove negative in terms of reduced motivation, poor morale, increased absenteeism, poor productivity, and other adverse results.

5. Focus on Getting “Only” the Right People to Do the Job. You cannot/should not attempt to change the behaviour of people as they rarely change. Hiring unqualified or mediocre talent who are unable to meet company expectations, even though significant resources are spent in training them toward alignment with organisational goals, is a strategy pointing straight at failure. Instead, focus on identifying, developing, and retaining only the right people with the right behaviour through the right policies and practices to grow the business in the right direction. The rest is just a waste of time, effort, and money.

What it All Means in Practical Terms

Common sense and practical thinking are essential to resolve the many challenges facing organisations. The critical factor is to remain in that “common-sense zone” and not lose sight of what is most important for the business. Ultimately, the goal should be to maximise returns for all stakeholders. The foundation of every “business” revolves around this simple objective. If any stakeholder is not receiving a fair value, that stakeholder will always remain an obstacle to growth. Rather than creating barriers to grow the business, leadership needs to do the opposite by liberating the pathway and eliminating the barriers.

The best remedy to maximise returns in business is to invest in management policies and practices that engender transparency, mitigate self-interest, drive common-sense decision making, build trust among the workforce, and help in hiring only the right talent to expand the business. Focus on these approaches or practices to outperform the competition, as they represent a more cost-effective and reliable strategy in the long run.

From the recently published book?HOW NOT TO CREATE HEARTLESS LEADERS, MINDLESS ORGANISATION?by Ali Kursun. Copyright ? 2021 by Ali Kursun. (June 2021)