Open-book management, the term you, as a leader would have often come across in seminars but never understood its actual significance. The literal definition of this term talks about the total transparency of the company’s financial information with its employees. Up until now, only the finance department and important managers of the company had access to such kind of data. This is because usually, companies believe in having a certain level of confidentiality when it comes to financial transactions. There is a constant threat of an ex-employee letting out this information to a competition rival. Despite this, now companies are investing faith in their employees and making this data available for the entire organization. This is in order for the employee to gain
There is a constant threat of an ex-employee letting out this information to a competition rival. Despite this, now companies are investing faith in their employees and making this data available for the entire organization. This is in order for the employee to gain a better perspective on how the business works and what he can do from his position to make a positive contribution. In return, the employee productivity also goes up.
Benefits of open-book management
Confidence of the employees
When you trust someone, the person values the faith you put in him and makes sure that he doesn’t let you down. This is what happens in open-book management as well. Usually if an employee unintentionally comes across some confidential information, it is like forbidden fruit. He might think of all possible ways the information would be beneficial for him. But when the employer makes the information available voluntarily, the employee feels responsible towards it and makes sure that it does not leak outside the organization. The employee will have new-found respect for the company which will motivate him to work harder. Also, he will develop collective thinking. This means that instead of focusing on personal goals, he now strives hard to take the company forward. This is a win-win situation for both the parties as if the company will progress, so will the employee.
More focus on work than office politics
Office politics takes place when an employee is insecure about his colleague overtaking him in terms of progress. But when there is transparency in the organization, the chances of another employee posing a threat on that individual are low. This practice also cuts down on the gangs formed within the office to pull another department down. Instead, employees work in a united manner as the main focus is wholesome growth of the company. When certain information is made available to the employees, they know exactly what to concentrate on which will give them better results. A focused goal gives faster results than a vague arrow in the dark.
Motivational factor for employees
When an employee is aware of how he can benefit from open-book management, he will inadvertently work harder. This means that as soon as he has access to the in-depth details of the company, he will keep a regular check on the same to see if there is even slight development or not. If he notices that the progress reports are stagnant, then he will try to come up with innovative ways to bring up the numbers. If a certain way doesn’t work, he will try another one. Like this, the employee will keep trying unless he sees a positive change. This is how open-book management can be a motivational factor as well.