Let the sun shine!

Those in the news business are familiar with “sunshine laws,” which stipulate that government and other public institutions must openly share information about their operations, decision-making and financial expenditures. The idea is that “opening the doors and letting the sun shine” on government will foster honesty, good decision-making and public accountability.

It’s a concept that works well in the private sector too.

The study on employee sustainability that I’ve been writing about in the past several posts identifies “sharing information” as one of the four most important things managers should do to create sustainable workplaces with happy productive employees.

As the researchers, professors from two leading business schools, note: “Doing your job in an information vacuum is tedious and uninspiring: there’s no reason to look for innovative solutions if you can’t see the impact. People can contribute more effectively when they understand how their work fits with the organization’s mission and strategy.” (“Creating Sustainable Performance” by Gretchen Spreiter and Christine Porath, Harvard Business Review, January-February 2012).

I could not agree more, which is why Intertech embraces an open book management strategy. Specifically, every month, we share the following with all of our employees:  sales, cost of goods sold (COGS), gross profit, expenses, and post-tax profit. These numbers are important to our consultants because they each receive a year-end personal bonus based on utilization (i.e. how many hours they charge).  We apply a multiplier based on post-tax profit.

Our people can earn up to two times their year-end bonus based on company profitability.  In 2011, consultants received 50 percent additional year-end bonus payments based on profitability.  We call this our Profit Participation Program (PPP) and we share the PPP multiplier at the all-company monthly meeting as well.

While employees thrive for many reasons, I’m convinced that our open book approach has fostered a greater sense of employee ownership in our collective success.

Next post: Minimize incivility (and fire the assholes!)