How to Improve Organizational Performance using Open-Book Management?

By Tanuja A Akkannavar Wednesday, 05 February 2020


The term Open-Book Management or OBM is improving employees ’ and organizational performance by providing them with enough knowledge about the financial status of a company, also take in their decisions and suggestions. A workforce feels motivated to work when they are being involved in the decision-making process and when their approaches are being considered with an equal value. Hence, when the employees are aware of a company’s financial and market status they will work more towards achieving objectives and making a company successful. The Open-Book Management strategy can also help the employees in making their work better improvising their performance with required measures to improve organizational performance. Open-Book Management at work has many benefits which can play a major role in improving organizational performance; following are some of the benefits of using Open-Book Management –

1. Productivity –

When the employees are treated well in an equal and better way by their higher authorities, they thrive in performing better which will result in a productive outcome. When a company considers strategies to improve organizational performance given by the workforce it will be an easy task to achieve its objectives and stand successful in the market.

2. Impact of Work –

By letting the employees know about a company’s financial statement and the place it has bagged in the market, the employees will learn about the impact that their work is making on developing the company. By knowing the impact of work the employees can plan for performance improvement strategies if required, through which they can be trained to do better with their work.

3. Employee Motivation –

In most the cases Open-Book Management is implemented to motivate the employees to make them perform better and actively get involved in the organizational operations. In a way, the Open-Management strategy is listed as one of the performance improvement strategies by most of the companies.

4. Clarity among the Employees –

An overview of organizational performance management can provide a clear picture to the employees about a company’s market value. In case if any company is running in loss and is about to shut down, by using Open-Book management the employees will be made aware of the upcoming consequences. Also, in a way, the clarity given to the employees will build a kind of trust and commitment between a workforce and their employer.

Why to Implement Open-Book Management?

In Open-Book Management a key factor that improves the functions of a company is accepting employee recommendations for organizational improvement. In order to make the best of this strategy, a company must be aware of how to implement alongside open book management pros and cons. A company should educate its employees to have a brief knowledge about reading and knowing the financial statements, which may help them taking part in any kind of business meetings if the concerned person is unable to do it. Also, by knowing an organization’s profits and losses the employees will prepare themselves to work accordingly.

When an employee is involved in the decision-making process, they will know how are they contributing to a company’s growth and how is the coming paying them back in return. This clarity forms a commitment in an employee towards their company and will make them remain loyal to their employer. Adding to this when the employees are well aware of the numbers that a company is making in revenue or profits, they will involve themselves in raising the figures and achieve organizational goals at a higher level.

Open-Book Management is strategic planning to improve organizational performance and another major advantage is following up with the employees' tasks becomes much easier.

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