Financial Information and Employees
- Posted by admin
- 08 November 2013
Even in today’s day and age, the majority of business owners are reluctant to open their books and share financial information with their employees. While there are some things that businesses should keep private after incorporation, there are others that would help the employees along in their careers and make them feel more important.
How it Works Today
After the incorporation of a business, the owner will likely hire several employees (and sometimes even thousands) in order to make sure things run as they should. However, while these employees may be given some company background, they very rarely have access to things like aggregate payroll amounts, the amount of total company assets, the amount of revenue the company generates and more. This is frustrating for many employees whether or not they actually realize it.
Think of it like this: let’s assume that the business owner takes all of his or her employees out to play a game of darts at a local pub. However, rather than the employees knowing their score along the way, all of the scores are covered and everyone just throws the darts blindly. It wouldn’t be long before all of the employees grow tired of the game and want to move on to something else. The same can be said with a business’s books. After its incorporation, certain bits of information should be available to employees so that they understand the impact of the jobs that they have devoted their lives to.
Information to Reveal
If a company is publicly traded after its incorporation, then stock value and such is available to everyone whether or not they are employees of that company. However, employees should be entitled to certain information, which include the total amount of revenue generated or lost by the business, the aggregate amount that the company pays its employees each quarter (although it is likely best that individual salaries remain private) and even the amount of money that the company spends on more frivolous things. Tax information can even be made known to employees so that they feel as if they are truly an important part of their careers.
How it helps
Everyone wants to feel as if they play an important role in their careers, and people work 40, 50, or even 60 hours per week in order to bring home a paycheck. Of course, since so much time is spent with a business after its registration, it is important for individuals to feel as if their roles within these companies are meaningful. Letting the employees in on the amount of revenue that is generated is a kind of reward, because the employee can look at the figures and feel confident in the knowledge that his or her work ultimately led to that income.
The incorporation of a business is certainly a tumultuous time for many new owners, but it is also a good time to make the decision to abide by an “open book” policy. This will not only make your employees feel more important, but it will also make them want to work harder for you and your company.