Beyond Open Salary: Use "Next Level Transparency" To Build Organizations


Open Salary has grabbed people's attention. As startups like Buffer and SumAll post their employees' salaries and algorithms for anyone to see, they are hailed for choosing bold transparency as a way to build their organization's cultures. Open Salary initiatives get a lot of press not just because they break a dumb taboo but also because they show employees what a company values by putting dollar figures next to years of experience, specific skill sets, and organizational roles. Because employees in companies with Open Salary can see what each group of employees is paid and confirm how everyone's salary is calculated, they can trust that they themselves are being paid fairly.

Salary transparency is rightly hailed as an important steps towards building a strong company culture, but it has a critical limitation: Open Salary unwittingly draws an individual employee's attention to what he or she or that person in customer service is getting from the company. It does not focus employees on what they all are collectively contributing to and accomplishing as an organization.

And that's why Open Salary, as a transparency and culture building initiative, does not go far enough.

Transparency About The Organization

What we need for "next level" transformation of great work cultures is transparency about how well the organization is doing. Very few companies share useful, timely information with employees about how well the organization as a whole is functioning. Very few employees know, on any given day, what progress they are making, as a group, towards the organizational goals they all share. Most companies simply don't share the kinds of information members need to understand and trust where the organization is going.

What organization members need, and what more companies should provide, is Open Collective Performance -- information that helps them focus on and understand the progress of the system, as a whole. Open Collective Performance includes quantitative and qualitative information related to how the organization is performing as a whole, that is made public within the organization and that is open to employees' contributions and evaluations. This information needs to be transparent, meaning that it is easy for members to comprehend, to interpret, and to trust. The information must also be open, visible and accessible so that anyone in the company can use it, distribute it, contribute to it, and discuss it. Collective performance information that's transparent and open helps members in any team or department focus on what's necessary for the entire organization reach its goals, build its capacity, and help it flourish.

Financial Transparency

For the next level of financial transparency, more companies should embrace "Open Book" practices. Open Book practices make financial and business outcome measures open and transparent to all employees in an organization. With information about financial elements of the organization's system, such as cost structures, cost controls, real-time revenue reports, and balance sheets, organization members are able to focus on the core financial health of the organization. Employees in open book organizations learn how financial metrics are derived and how they should be interpreted, so all have the financial literacy they need to use the data well. Advanced practitioners such as Zingerman's and Burt's Bees have expanded their information sharing to include non-financial goals, such as community contributions and sustainability. Open Book management practices help members develop more ownership for the organization's goals and accomplishments, as well as a stronger connection with the organization itself.

Cultural Transparency

The organization's "performance" includes not only financial and business outcomes, but also collective achievements within the organization, such as resilience, wellbeing, organizational vitality, the presence of high quality colleague relationships, and movement towards purpose. For the next level of cultural transparency, organizations should create and share transparent, open information about the current state of the organization as a human system.

While large scale and sophisticated organizational culture assessments have been around a long time, they've been designed for large and well-funded companies, and have not regularly been used in an open or transparent way. But an organization of any size or budget can tap into a burgeoning mini-industry of "culture tech" and "people analytics" companies like Culture Amp, TinyPulse, OfficeVibe, BetterWorks, and CultureIQ. These companies offer an array of lightweight, easy to use, and timely tools for revealing the performance of an organization's culture. (See this wonderful list of digital culture assessment tools, curated by Culturevist.) 6Q, for example, asks respondents to pick a face emoji that best represents how they are feeling at the end of a work week. There are even bots you can integrate into Slack to invite feedback about collective mood, energy, and today's progress. With digitally enabled processes and every employee available by smartphone, it's easy for almost any organization member to request or share information, as well as to start a discussion about that the information means and how to respond to it.

Use Open Performance Information To Change Power Dynamics

Whatever performance information organizations choose to share, it needs to be more than collective, transparent, and open. The information needs to help create a different kind of relationship between the metrics, what they measure, and who they measure. Instead of "tracking" performance from above, so that management can use the data to control, reward, or punish, open performance information needs to be closed, gathered, and shared in ways that help members update and support each other. Collective performance information has to help transform the conventional power dynamics between the organization and the employees, to remove any "us versus them" dynamic and instead create a sense of "all of us" working in concert.

Open Salary is a highly visible and effective tactic for using transparent, open information to build a positive culture. Even when companies like Buffer demonstrate their deep commitment to transparency by sharing real time performance data with the public at large, their most important audience is themselves. When each and every member of an organization can find, share, and discuss real information about collective performance, they can focus on their organizations' financial and cultural goals. Of course, metrics and measures are just part of the feedback we need to build and sustain a healthy organizational culture. But given the increasing ease of gathering and sharing organizational information, more organizations should use transparent, open, collective performance data that invites each of us to focus not our own individual bottom lines, but on the work we need to do together.

CV Harquail, PhD, is an idea accelerator, consultant, and scholar who works at the intersection of organizational change and digital technology. She teaches management at Stevens Institute of Technology. Her forthcoming book, Generosity At Work, shows organizations how to grow and take a larger leadership role by helping others flourish. Sign up for her newsletter and follow her on twitter@cvharquail.