The rule is one operator per station. But when nobody’s watching, there might 17 people for 13 stations on the assembly line at one mobile phone manufacturing plant in Southern China.

When managers comes around, though, they’ll see 13 operators, one for each station, exactly as prescribed by the leaders. Even with company values like learning and continuous improvement, this plant’s employees scrambles to hide exactly the kinds of refinements and creativity that management seeks.

Transparency is often touted as a vital ingredient for the best teams. And it’s true. For people to move fast and think for themselves, they need ready access to the information they need to do their job. Failing to provide a foundation of common knowledge and creating an uneven distribution of information opens the door for inefficiency and unhealthy power imbalances.

But the transparency paradox arises when there’s no trust and autonomy. Actually, it’s more like counterproductive monitoring — one-sided visibility to benefit the manager’s curiosity rather than equip the employees to do their best work.

The Counterproductivity of the Transparency Paradox

As Ethan S. Bernstein, Harvard Business School professor, discovered in his study of that Southern Chinese plant, organizational transparency may be counterproductive, incentivizing people to hide. When you’re watching your employees like a fox, you can drive them underground.

For his study, Bernstein embedded Chinese-born Harvard undergraduates at the manufacturing plant. Their new peers took them aside and discreetly showed them methods and tricks that improved on the by-the-book training to accomplish tasks, keep production going, and make the work faster, easier, and safer.

Meanwhile, the whole reason managers at this plant supposedly cultivated workplace transparency was to foster learning and continuous improvement. Everything about the set-up and environment — from the display of output and quality numbers to different-colored caps and clothes indicating roles — were carefully designed to, first, help figure out the best way to do something, and second, be able to spread that information quickly to other lines.

Yet what happened was that the employees hid their best, most innovative ways of doing things. They also instructed the embedded Harvard newbies to alter their methods when observed or when things weren’t too busy.

Otherwise, they explained, the managers will “get mad” and yell at them. So when employees saw supervisors hovering — they resorted back to doing things according to code, and predictably slowed down. This combination of top-down observation and transparency then caused productivity to fall, and the “suggestion boxes on every line remained empty.”

Use Trust and Autonomy to Channel Change

Employees hid even though they knew the best way of doing things and productivity would decrease, because experience had taught them the cost of deviating from managements’ expectations.

The plant employees explained, either they would have to stop to justify why the new methods were better in ways that the managers understood, or get in trouble from diverging from the standard — both of which stood in the way of actually getting stuff done on busy, demanding assembly lines.

How employees perceive their autonomy is crucial to eliminating the transparency paradox. It’s pretty clear that autonomy doesn’t mean anything if you get penalized for trying new things. As additional research from the University of Illinois’s Gopesh Anand and Dilip Chhajed corroborates, trust has to flow in both directions. Otherwise, as they write:

any latitude that employees have as a result of autonomous job design will be used to make ad hoc changes to work processes rather than to channel such changes through systematic continuous improvement.

Basically you have to create a safe environment for experimentation and failure. As an operator who’d contributed many of the new improvements on the line explained to Bernstein: ‘We have all of these ideas . . . but how do we feel safe to try them? We’ll experiment as long as the consequences aren’t so great. As long as the price we pay isn’t so great.’’

* * * * *

Employees can recognize in a second when higher-ups don’t have the same depth of knowledge of the work on the ground. That means managers have to be careful of becoming their own obstacle — setting rules and requirements because they think they’re the smartest person in the room — without completely understanding what’s going on.

Those extra operators on the line? They provided much-needed help whenever the line fell behind and enabled employees to meet increased targets that were determined by managers and kaizen engineers who’d pitched in with production to come up with the new numbers.

If you want transparency to be a truly beneficial practice, back it up by supporting your employees’ progress rather than delivering edicts and only watching for mistakes. When you impose the transparency paradox’s costs on experimentation, innovation, and even making mere suggestions, everyone loses out on crucial information and better ways to work.

P.S. If you liked this article, you should subscribe to our newsletter. We’ll email you a daily blog post with actionable and unconventional advice on how to work better.