Transparency and Your Business Practices

Transparency and Your Business Practices

Transparency and Your Business PracticesTransparency in business means operating in such a way that everyone knows what’s happening. With social media, it’s virtually impossible not to be transparent. Just about everything gets disclosed on social media sites… by your customers, your employees, and everyone else. Thus, it makes sense to think about how transparency can be best employed in your business practices.

Management transparency

Management transparency means managers let employees know what they are thinking and doing. Even more, it means that employees are brought into the decision-making process.

Benefit: Worker satisfaction.   According to a survey several years ago, management transparency was the number one factor contributing to employee happiness.

Pay transparency

When I started in business, one of the unspoken rules was never to share information about what you earned or what your employees were paid. Now there’s a 180 on this. Many companies have adopted open salaries and pay transparency among staffers.

Buffer, a social media promotion company, makes all employees’ salaries public on its website. And an SEC rule under Dodd-Frank requiring publicly traded companies to disclose the ratio of their CEOs’ pay to median employee compensation was supposed to go into effect earlier this year; the rule is now on hold.

Benefit: Motivation.  According to one study, collaboration among employees is better when compensation of each is known. Another study found that employees work harder.

Note: In the past, some employers prohibited employees from disclosing their pay. Now, a number of states, including California, Illinois, and New York, prohibit employers from taking any action against an employee who discloses pay information.  Find a complete list of states with pay transparency rules here. Also, a federal rule bars federal contractors from discriminating against employees who share pay information.

Transparent pricing

Transparent pricing is a practice that tells the consumer what a product costs to make (e.g., the cost of each component, labor). The practice is a way to convince consumers that the items are worth the price being charged.

Benefit: Consumer satisfaction. An article in the New York Times in June discussed the merits of transparent pricing. The article opined that this business practice was particularly appealing to millennial consumers.

Conclusion

Given the social media climate today, transparency isn’t a choice, it’s a requirement. What can your business to do be more transparent?

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