How Honest Should You be with Your Employees?

questionsClinton Korver wrote a great article for Harvard Business Publishing. He talks about his experience running a start-up and why it’s especially important during tough times to share information with your employees.

He says that he went against the advice of his venture capitalists. They feared losing employees, customers, and other investors if the bad news got out. Clinton found that being completely forthright strengthened his relationships with his employees.

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marylynn One of my radio managers did that when our company wasn’t doing so well. I appreciated the honesty and how it put all of us on the same page.

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Honesty is high on most of our lists of core values. However, do we really think that we should always be honest?

For example, picture yourself standing with your best friend adoring her newborn baby boy. You think he’s the least attractive baby you’ve ever seen. She’s going on and on about him, when she asks you the dreaded question …

Isn’t he the best looking baby you’ve ever seen?

Would you tell her what you really think? Or would you pick your words carefully to avoid hurting her feelings?

Of course, this is a different situation than the first one presented – being honest with your employees, even when things are not going well.

But it illustrates that there can be a second value at stake – the desire to not cause undue harm.

Is there a reason to tell your friend what you really think? What good will come from it?

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georgeI’ve come to believe strongly in open-book management. As a general rule, I think the more you share with your employees, the better. Having said that, I have found you also have to know your employees. Open-book requires a higher level of maturity from your employees. If that’s not present, sharing more just creates undue emotional distress.

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The reason an ethical dilemma is a dilemma is because two or more core values at odds with each other. These situations flow up to the leader. You have to find a good solution.

It’s a personal decision. There likely will be disagreement on the best way to handle it. That’s why it’s so important to have a framework in place for these kinds of decisions.
This framework will help you:

  • be more efficient in making decisions like this
  • make decisions that are consistent instead of all over the board
  • build goodwill with all affected parties
  • respect the face you see in the mirror at the end of the day

We have a great resource that helps you set up the framework so when an ethical dilemma comes your way you’re prepared. It outlines the three steps to solving an ethical situation:

  • Know your core values
  • Select an ethical model that helps you apply those core values
  • Use a problem-solving process to work through the situation at hand

So we’ve presented an ethical dilemma today … should you share all news with your employees, even the bad stuff? What do you think?

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2 replies
  1. Ryan M
    Ryan M says:

    I am just in the process now of trying to decide whether or not my company needs to start hiring employees, and one thing that worries me is that in being too honest, I will be giving away my company’s secrets to success.
    I think it is important to be open to your employees about any problems you are having that might affect the employee, but there is a line between honesty and just saying too much.

    Reply
  2. George
    George says:

    Ryan – You raise a common question among entrepreneurs. Of course, you’ll want to discuss how to protect yourself with your attorney (non-competes, non-disclosures, etc.). When I was a young entrepreneur, I was too guarded. Sharing leads to buy-in. So don’t go overboard. Also, take a lesson from companies that have “secret sauces”. No employee has to have the whole recipe!

    Reply

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