Employee monitoring - is it good or bad?

Employee Monitoring: Weighing the Pros & Cons

Employee monitoring is a hot topic among employers with a workforce that includes remote workers and freelancers. ABC News reported in 2017 that 78% of major U.S. companies monitored employees’ use of e-mail, Internet or telephone. Given the right context, employee monitoring technology yields improved worker productivity. On the other hand, there can be serious repercussions if the workers reject it due to privacy concerns. This post explains the pros and cons of employee monitoring, and gives you some insights on how to decide whether the technology is right for your business.

The rise of employee monitoring

the raise of employee monitoring

Permanent full-time employees were once the pillars that support the modern employment landscape. Typically, these employees would commute to a central supervised work location to toil in a cubicle on a 9-to-5 work day. Today, however, we are witnessing a gradual shift of employment paradigms where employers and workers warm up to alternative employment models such as telecommuting, outsourcing, job sharing, freelancing, etc. According to a 2015 Gallup poll, 37% of US workers said they had telecommuted, as compared to 9% in 1995.  Another study reported 3.9 million Americans working from home at least half the time in 2015. Advances in information and communications technologies have allowed employees, contractors and freelancers alike, to work at homes or other remote locations.  

The remote workers under the new employment paradigms operate under drastically different conditions than their traditional office counterparts. For instance,

  • The work hours are typically more flexible.
  • Because of the lack of space and time proximity, work is often unsupervised.
  • New management techniques and tools are used to ensure the continual smooth running of business operations.

In broad terms, employee monitoring is the use of technology by employers to track workers’ job performance. Monitoring job performance has always been practiced by managers and owners, and is universally accepted since the advent of collaborative work. Technology-assisted employee monitoring is nothing new in the workplace, e.g., the use of GPS and telemetry devices for tracking company car location and speed events, workplace video cameras, etc. A new breed of advanced employee monitoring technologies enables the surveillance of workers’ computer activities using:

  • screenshot capturing,
  • keystroke logging,
  • mouse click and movement tracking.

 

Arguments for employee monitoring

The arguments for employee monitoring can be summarized by the following 3 major points.

 

Worker productivity

worker productivity

Employee monitoring provides management with the data to evaluate workers’ productivity and to gauge their work performance. As a result, managers can

  • reward the productive and high-performance workers with positive reinforcement, and
  • plan for remedial actions for non-productive and non-performing workers.

 

Asset security

Employee monitoring pros: asset security

Internal theft is a known problem within many industries. The retail service industry has to deal with the internal theft of physical goods, also known as “inventory shrinkage”. A national US study reported an average shrink rate of 1.44% in 2016, which amounted to $48.9 billion. It was estimated that 30% of the inventory shrinkage could be attributed to internal theft. A lesser known but equally damaging internal theft is the theft of intellectual properties within knowledge industries. The Commission on the Theft of American Intellectual Property estimates that the U.S. economy suffers an annual loss between $225 billion to $600 billion due to intellectual property theft. The installation of employee monitoring technologies is a significant component in the overall defence against intellectual property theft.

 

Mitigation against liability

employee monitoring pros: mitigation against liability

In general, employers are legally liable for the work actions of their workers, regardless of where those actions take place, whether it be in the office, out in the field, or in the worker’s home. For instance, if the worker sends a racially or sexually offensive email to a co-worker via the corporate email platform, the company is at risk of discrimination and sexual harassment claims by the victim, respectively, for failing to prevent a hostile work environment. In the year 2017, 26,978 cases of alleged workplace harassment (including sexual harassment) were brought to the attention of the U.S. Equal Employment Opportunity Commision, and a total of $126 million were awarded due to such charges. The fact that the sending worker works remotely or at headquarters, or that the email is sent during lunch time or a coffee break, does not absolve the employer of legal liability. The early detection and prevention of inappropriate worker behavior mitigates the risk of further damages and litigation. In the event of a legal proceeding, employers can use the electronic data gathered from employee monitoring as evidence in their first line of legal defence.

 

Arguments against employee monitoring

Arguments against employee monitoring

A reasonable amount of employee work-related performance data is vital for the successful management of a business. Employee monitoring is designed to overcome the practical challenges in the collection of such information for remote employees and freelancers. However, the practice of employee monitoring raises the following workplace privacy concerns:

  • Employee monitoring, as a technology, does not distinguish between work and personal time. Advances in the technology resulted in increasingly larger quantity and greater variety of employee information being gathered in the name of employee monitoring, which may or may not be correlated to one’s job performance. The collection of personal information that is irrelevant to job performance constitutes the basis of privacy violation.
  • The existence of the gathered employee information creates the risk of its potential misuse and disclosure to third-parties. In the age of global terrorism threats, we have seen that businesses are engaged, both voluntarily and involuntarily, in government surveillance efforts. The threat of personal information being turned over to government agencies is real and of concern to privacy-conscious employees.
  • Besides being a hard regulatory matter, privacy also translates to more subtle and softer employee morale issues.  How will employees react to the fact that they are being monitored at work? Will there be a net gain in productivity, or will it achieve the exact opposite as in demotivating the employees, potentially leading to job dissatisfaction, turnover or even retaliation?

 

Decision factors

Employers of remote workers need to weigh the pros and cons before deciding whether to adopt employee monitoring. The potential increase of productivity must be balanced against the potential risk of privacy violation. The following are the important factors that will help businesses evaluate whether the potential rewards outweigh the potential risks.

  1. Local legislation
    local legislationEach country has its unique labor and privacy laws. These laws may apply differently for private industries versus public institutions. In addition, collective agreements with unionized employees will impact privacy requirements. The legislation differences highlight the scope of privacy protection, as well as the type and severity of litigation in the event of its violation. A business must consider the local legal framework before deciding to adopt employee monitoring. Furthermore, local legislative requirements drive which employee monitoring technology solution to acquire and implement. For instance, if the law of the land is more liberal and employee-friendly, then the chosen technology should allow the employees to exert a greater control over the captured data, such as the ability to remove or obfuscate certain data post capture.
  2. Industry nature
    industry natureEmployee monitoring technologies have historically been rolled out in certain industries, and by now are well accepted as the norm among the employees. For instance, GPS monitors are regularly installed in company vehicles in the transportation industry. In contrast, workers in other industries such as high tech and creative design may not be as receptive to employee monitoring technologies. The degree of acceptance by workers must be taken into consideration as part of the employer’s decision process.
  3. Performance goals
    performance goalsEmployee monitoring will generate an enormous amount of data as input to management. The usefulness of the data depends on what management decides to do with it, specifically, how managers interpret the data. Recall that the primary objective of employee monitoring is to track job performance. To that end, a business must have clear and measurable performance goals that fit the jobs in question. Having the right performance goals will derive maximum benefits from employee monitoring. For instance, two common productivity metrics in the software industry are the number of lines of code written and the number of bugs discovered after a software release. If the sole performance metric is the number of lines of code written, then time spent on email communication may be interpreted as a hindrance to job productivity. However, if the number of bugs discovered post release is part of the metric, then communication among team members can be interpreted as vital to minimizing defective code, and should be encouraged instead. If performance goals are not in place or are not mutually agreed upon, the employees are more likely to perceive the implementation of employee monitoring as being intrusive and a violation of workplace privacy.
  4. Infrastructure support
    infrastructure supportThe success of employee monitoring hinges on having the necessary information technology infrastructure in place. Of primary importance is the computing equipment that remote employees use to do their daily work. If remote employees use their own equipment, known as BYOD (bring your own device), as opposed to using employer-supplied equipment, it has direct legal ramifications in the event of a privacy grievance. Second, the employer must have a secure database system for storing and controlling access to the captured employee information. Third, infrastructure support extends from physical hardware to company policies. An Acceptable Use Policy must communicate clearly what the employees and the employer are allowed and not allowed to do on corporate technology infrastructure. In addition, an Employee Privacy Policy must state what information is gathered from employee monitoring initiatives and how, as well as how the collected information is stored and used and for how long. The information must be securely deleted after the agreed upon expiry date, subject to local government legislation.
  5. Suitable technology solution
    Suitable technology solutionEmployee monitoring technology solutions often involve taking screenshots and tracking mouse movements and keys presses. Rogue software is known to exist for the circumvention of employee monitoring by mimicking and automating the aforementioned user actions. Employers should select an employee monitoring technology that is actively being developed and has an excellent future prospect in order to win the escalating arms race against rogue software. In addition, the technology should be customizable to satisfy the requirements of the specific industry and the individual company. Certain jobs will require the ability to track productive time away from the keyboard to reflect mental efforts. Monitoring technology must adapt to the increasingly multi-faceted task of tracking job performance.

 

Summary & conclusions

Many businesses tout that their people are their greatest asset. In reality, a more accurate statement is that the good performing employees are assets, while all others are liabilities to some degree. For businesses with remote workers, knowing which ones are assets and which ones are liabilities can be a challenge. Employee monitoring technology enables businesses to monitor workers’ productivity by recording and analyzing their computer desktop activities. To reap the full benefits of employee monitoring, a business must ensure that:

  1. Its workers are well informed of the job related metrics and performance goals that are being measured.
  2. The employee monitoring solution can be customized to fit unique organizational culture and ethos, and to comply with local privacy and labor legislations.
  3. Adequate information technology infrastructure is in place to protect the integrity and the security of the gathered information.

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