Employer Transparency is an Effective Employee Incentive

by: Nichole Gunn February 1, 2011

Transparency is a business strategy that offers employees financial and decision-making information in regard to the company they work for.

This strategy is a relatively new trend, and is still trying to find its way into more businesses. The idea behind this tool is to effectively boost employee incentive through knowledge. This knowledge allows the worker to feel more involved in the company, and can provide motivation to strive to help improve the bottom line.

According to Inc. magazine, most employers do not consider transparency a practical solution to employee incentive, even though it is very cost effective and the new generation of workers find it a desirable benefit. But, the magazine notes that 83 percent of the 2010 Top Small Company Workplaces do take advantage of this practice.

Businesses that utilize transparency find that initiating employee training to understand the information they are being given access to proves to increase the open-book policy’s effectiveness.

Laura Ortmann, a transparency proponent, initiated an open-book policy to help turn around a company she acquired and motivate employees. She and her husband, Jeffrey Evenson, bought Ginger Bay Salon & Spa and immediately went to work training the staff of hairstylists, massages therapists, and other staff members. The workers were informed about various aspects of the company’s structure and performance, along with the role they play in the company’s success.

Posting the financials on a scoreboard in the break room, the board also announces each employee's daily sales results, and whether or not goals are met. "Behavior changed overnight," Ortmann told Inc. magazine. "No one wants their name next to a low number." She explained that the employees quickly went into a let-me-fix-this-problem mode. “They came up with amazing ideas for generating revenue and cutting costs."

While this is just one scenario of the benefit of an open-book policy, a number of other companies are using their own version of transparency to motivate employees to feel the company’s success is their success.


About Nichole Gunn

Nichole Gunn is the VP of Marketing at Incentive Solutions, an Atlanta-based incentive company that delivers advanced, agile B2B customer loyalty and channel sales incentives programs.