Of the various managerial practices that have come to typify enlightened organizations, transparency is usually high up the list.  Alas, new research from Tilburg University suggests it may have some unintended consequences, as transparency may actually make workers less productive.

Transparency was found to be detrimental to group performance when the identity of that group was also high.  Indeed, the ablest within such a group are likely to perform at their best when transparency was low.  This is because when we have a strong group identity, we tend to conform our behaviors to that of the group, which might result in some group members reducing their performance to fit in with the rest (obviously low performers try and improve to fit in equally).

Strong performers

The researchers analyzed the performance of employees working across three groups who were generally responsible for equipment operation, inspection, and maintenance in a large electrical power plant. All three groups had the same tasks, structure, and performance system, while they also had similar demographics.

Despite these similarities, the groups did differ in the amount of transparency they had.  For instance, in a group with low transparency, they reported each month on the individual performance of each individual, but the individual performance was only visible to that respective worker.  By contrast, in the high-transparency group, the individual performance was visible to all team members.

The importance of group identity on our individual behavior has long been accepted and was central to the study as each of the teams had been working together for some time. The teams also operated with few formal controls to manage performance, so group norms were highly influential.

The researchers caveat their findings by accepting that they were discovered in a Chinese firm, so the more collectivist nature of Chinese culture must be taken into account.  Nonetheless, they believe similar findings are likely to emerge even in more individualistic cultures.

“Managers need to be aware that the effect of employees’ identification with their workgroup is complex and not always positive,” they conclude. “We tend to assume that identifying strongly with one’s group—what we call group identity, or GI—is a good thing, as it motivates employees to go beyond their strictly personal interests.

“What our findings suggest, though, is that how GI plays out depends on employees’ perception of the norms in their groups. To what extent will those norms pull performance up or down? Managers need to consider this carefully in deciding how much effort to devote to cultivating GI and how transparent workers’ performance should be.”