How much information should companies share with their employees?


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Posted Online: April 22, 2013, 11:30 pm
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By Joan Lloyd
How much information should be shared with employees?

How much is too much when it comes to sharing information with employees?

Company A has a "need to know" culture. The leaders like to keep things close to the vest. "Why should we share the strategic plan?" they argue. "Employees aren't going to understand it, or care, anyway."

They also don't take the time to hold company meetings, share sales or financial data, or let the employees know how the company is doing in the marketplace. Their style is paternal: leaders know better — so we'll tell you what to do.

Company B is at the opposite end of the continuum. They want transparency."We want to empower our employees and treat them like owners of the company," they say. So leaders hold quarterly meetings and share detailed reports from every department.

They also believe in allowing employees access to salary information, job descriptions and other HR related data on anyone in the company. Their style is open and participative: We won't tell you what to do — be self-actualizing.

I think both approaches are flawed. Somewhere in the middle is the right approach, in my opinion. Company A's over-controlling style limits employee's ability to fully contribute. Without big-picture information, employees won't be able to find creative solutions that will help the company reach its goals.Like playing basketball with blindfolds on, they don't know exactly where the basket is.

While Company B wants to be completely open about information, it will require an education process that can be all-consuming—and a big distraction from employees' individual productivity. Instead of playing their positions in the game, they end up trying to be the coach and the referee, too.

Company B errs in the other direction. Proponents of "self-directed teams" (a "progressive" leadership idea in the 1980's) could tell cautionary tales about a good idea taken too far. Companies, who experimented with self-directed teams, removed supervisors and let teams manage themselves.

Problems began when front line employees were spending too much time on managerial-type duties, such as giving each other performance reviews, making up schedules, and mediating conflicts. The leaders had to spend too many hours educating employees about the finances, HR, etc.

Sharing too much information can cause the same time-consuming distractions. For example, employees, with access to salary data, demand to know why their co-worker is making more than they are.

The leader must be willing to spend a lot of time educating the complainer—and the rest of the employees — about the compensation system. In the end, the leader finds it's easier to pay everyone the same, so there are no more complaints.

And it's safe to say, that employees do care about how the company is doing, but not about the infinite details of finance, or other top level issues.
So where is the "middle ground"?

Here are some guidelines:
— Employees should know what the company's short and long-term goals are, so they can tailor their behavior to drive the company toward those goals.
— Employees need to have their own goals and understand how their contribution makes a difference.
— They should know how the company is doing in the marketplace, and have discussions in their own teams about how they can be more effective and efficient.
— They need a working knowledge about other departments, and should be expected to work with them as internal customers.
— Employees should know what they are expected to do and how they can move up the ladder and make more money.
— Employees should hear honest feedback about their performance and be able to get coaching on how to grow in their job.
— Employees should be aware of company challenges and problems, so they can contribute to solutions.

Employee engagement and empowerment can't happen in a vacuum. Sharing information — on the right things — can enable them to move the performance needle in the right ways.

Joan Lloyd is a Milwaukee-based executive coach, organizational & leadership development strategist. Email your question to Joan at info@joanlloyd.com and visit JoanLloyd.com to search an archive of more than 1400 of Joan's articles.

















 



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