I'll take truth. I want to be able to believe what I hear. I often feel anxious that people are lying to me when I do something wrong in order to be "nice". I want to know when I do something wrong (politely of course).
I think an organization where people are "nice" to each other but not truthful, is one that will run itself into a ground, because it will be run on fantasies.
All that said, it's better to be "both" whenever possible, and if you tell the truth, you should be nice about it.
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