by Jake Rosenfeld
The delivery service start-up Jet.com promises many things to its employees, including unlimited vacation, generous parental leave, and meals provided by the company. Many Silicon Valley firms now provide similar perks as they seek to entice workers in a tightening labor market.
What sets Jet.com apart from its peers is the promise of something ostensibly less tangible: financial transparency. The firm offers its salaried employees real-time financial information detailing how the company is performing. Why share such valuable data? The practice is part of the firm’s effort to cultivate a culture of transparency, which, CEO Marc Lore hopes, will engender greater worker trust, happiness, and, in the end, productivity.
Workers and their representatives have fought to “open the books” of their firms for generations. In the United Auto Worker’s strike against General Motors in 1945-1946, union leader Walter Reuther demanded access to the company’s financial information. GM resisted, as did many firms then and as many continue to today, classifying company financial data – information like detailed revenue reports – as proprietary, and off-limits to employees.
The existence of the exceptional companies like Jet.com, who preach and practice transparency, allows us to examine what, if any, tangible consequences financial transparency has on productivity, company profits and worker pay.
While it is too soon to tell whether Lore’s gamble on transparency generates a happier, more productive workforce, my research with fellow sociologist Patrick Denice suggests it could lead to a higher-paid workforce – an outcome Lore may not have intended.