How much information are employers required to share with staff to increase transparency in business? Business owners and managers must make this decision from time to time. They may need to inform employees about changing revenues, internal reshuffling or even downsizing. All these actions must be well thought out since confidentiality is important too. However, keeping situations too secretive can bode legal trouble for employers. Transparency in business is important for many reasons and some of them are outlined below.
Transparency in Business: It’s a Critical Requirement
1) It Helps Avoid Discrepancies
Apart from being a company policy, salary confidentiality is a cultural norm. If you don’t discuss financial matters, coworkers don’t either, or when anyone finds out there is a discrepancy, workers become disgruntled. Transparency in business protects business against lawsuits. When people are aware about the salaries of their coworkers, they know how they measure up to their peers. However, when two coworkers find out they are making different wages with the same job and responsibilities, this payment discrepancy may cause a discrimination lawsuit to arise against that employer.
2) It Promotes Confident Staff
Whenever revenues are high, companies may celebrate and provide rewards like bonuses to workers. On the other hand, whenever revenues are down, workers may not even be aware. This is particularly bad since layoffs could be coming. Transparency in business helps employees be more aware of what is happening behind the scenes to make better decisions. Perhaps that decision could be to switch from a sinking ship. It is a risk, still, employees are unable to solve issues for themselves when they are unaware of what a company is going through.
3) It Helps Avoid Fraud
Transparency in business can assist in preventing fraud, as fraud can be anything from some employees pilfering a $20 bill for themselves, to a staff member siphoning millions from the organization. This level of fraud can only go on unnoticed if no one is aware of what you are doing. Extreme secrecy in the name of being confidential can cause devastating losses, both in funds and in investor lawsuits. Whenever you put fraud prevention measures in place, you’re furthering transparency in business. If more than one individual is aware of a situation, it is difficult for fraud to be committed by a single individual.
4) It Helps Avoid Devastating Data Losses
Even though there are many imitations, no one knows the secretly held formula for Coca-Cola since the brand itself confirmed that the trade secret is closely guarded. What then happens if the handful of people trusted with this knowledge die? Will the company fade as well? In the budding times of Coca-Cola, it may have. Your brand may not operate with this kind of secrecy on anything, transparency in business helps your organizational systems. What happens when a marketing staff decides to quit without notice? Are the entirety of the marketing plans solely on a laptop for which the password is unavailable to others?
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