Copyright 2008 © The Manufacturing Optimization Group; all rights reserved.
The Advantage of Open, Honest Communications with Employees
By James Shearer
A fail-proof, no-cost way to increase productivity in a business enterprise is to widely share information about the business with employees. This information includes profitability, market share, business plans, operational results, and even strategic direction. It also includes bad news as well as good news.
Much like the members of an athletic team, company employees are key stakeholders in their business team. They are committed to the business if for no other reason than their livelihoods depend on the business’ success. In order to maximize their individual and collaborative contributions to the business, they, like athletes, need information about the current state of affairs.
Few would argue that a football player one point behind in the 4th quarter will perform differently (with more intensity, more effort, and more energy) than he would if his team were 45 points behind. It is acknowledged human nature to put forth extra effort when the individual clearly recognizes that it will make a positive difference. As it is in sports, so it is in the business world.
Owners, presidents, and/or general managers (hereafter collectively referred to as the GM) naturally want to protect their businesses. It is one of their duties and obligations. One way GM’s might do so is to zealously guard sensitive information about the company and disseminate that information, if at all, to only a few key employees. The GM might consider other employees as untrustworthy or, more probably, as simply not needing to know the ongoing status of the business. The reasons why the GM might not widely share sensitive information with employees are really irrelevant. The logic, however, is faulty.
There are several logical reasons why having frequent, open, and honest communications with employees is the right thing to do and why open communications can enhance enterprise performance.
Some advantages and considerations are:
There are a few downsides to open communications. (1) Employees could leave and go to work for a competitor or start a competitive business, taking with them sensitive information that could prove detrimental to the company. (2) Faced with negative business news, employees could get jumpy and leave when, in fact, a downsizing was not going to occur. Thus, an unnecessary void could be created.
Companies cannot normally prevent ex-employees from joining a competitor. However, as part of the hiring process, all employees (but especially key employees likely to have access to particularly sensitive, potentially damaging information) can be required to sign a non-disclosure agreement that prevents them from conveying confidential information to competitors whether they work for them or not. There can be legal recourse against the ex-employee as well as the competitor if this agreement is knowingly broken. Most competitive companies are likely to be well aware of this and will avoid even the appearance of pirating confidential information. Also, keeping in mind that sharing sensitive information should be tailored to the recipient group, employees in less critical positions, while having increased access to sensitive information, are not likely to possess information that would be truly damaging to the company.
If an employee leaves for another opportunity because he/she is aware of negative business conditions, there is of course the legitimate loss of that person’s work product and the loss of knowledge that the employee has acquired. If the conditions in the company were going to result in a downsizing anyway, those “jumpy” employees who leave in advance of a downsizing are really contributing to the solution (and possibly avoiding costly unemployment expenses as well). No harm, no foul! (In the face of bad news, if the company wants to prevent key employees from “jumping,” it can provide reassurances or even a retention incentive to ease the concerns of those select few truly critical employees.)
If not already doing so, manufacturing companies should seriously consider implementing a culture of frequent, open, and honest communications with all employees. There are numerous positive reasons to adopt such a policy. These include the moral imperative to keep employees informed about possible impacts to their livelihood, the very human response of employees “going the extra mile” for an employer either in trouble or faced with a great but time-urgent opportunity, increased trust resulting in improved cooperation and labor relations, and the likelihood of informed, trusting employees offering ideas on how to further improve the business. The few downsides are definitely overshadowed by the upside of this approach to positive employee relations.
Copyright © James Shearer, 2004. All rights reserved.
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Last modified: 02/10/08
Copyright © 2004 The Manufacturing Optimization Group