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Monitoring Employee Productivity: Proceed with Caution

With today's technology, you can measure nearly everything employees do at work. But should you?


Long before activity-tracking gadgets such as Fitbit and FuelBand became popular, Patty Jo Toor’s footsteps were being counted—but not by her. Rather, her employer used a tape measure when she began her medical career in 1979 as a way to gauge how nurses walked their daily rounds.

Today, Toor is chief nursing officer at Florida Hospital Celebration Health near Orlando. The workforce she oversees is monitored just as Toor was 35 years ago, but today’s monitoring technology offers considerably more precision. The 300 nurses and patient care technicians in selected units wear badges embedded with sensor technology that tracks exactly where they go during a shift. The real-time location system can show how often an employee visits a patient’s room and the nurses’ station.

While some may find such oversight Orwellian, it serves a purpose that may justify the intrusiveness. For example, the technology helped hospital staff discover that it hadn’t stocked enough medicine at certain stations to last through the night—a situation that was forcing the nurses to spend extra time getting more. As a result of the monitoring, the hospital improved its supply procedures and became more efficient.

In the digital age, however, use of employee monitoring isn’t limited to situations with potential life-or-death consequences, such as those involving patient care and safety. Companies everywhere are tracking employees’ activities in all kinds of ways in an effort to become more streamlined and productive. 

Some are measuring keystrokes or using programs that can tell supervisors when a keyboard has been idle for 15 minutes. Others use keywords to flag which websites employees visit—and block ones that aren’t related to work—or are checking employees’ e-mails and instant messages to make sure they don’t contain inappropriate or proprietary material. Indeed, nearly every aspect of work is now measurable in some way: Hours are tracked via security badges and fingerprint scanners, locations are monitored using GPS, and certain employee activities are captured by digital camera and video.

“All sorts of monitoring takes place for all sorts of reasons,” says Lewis Maltby, president of theNational Workrights Institute in Princeton, N.J. “Virtually every company conducts electronic monitoring.”

Shuttle Express Inc.’s HR director, John Angle, learned the benefits of employee monitoring when one of his company’s vans, all of which are equipped with cameras, was hit by a car. Both vehicles were totaled, and the other driver said the accident wasn’t his fault. “We were able to show the video,” Angle recalls, preventing liability that would have been well over $100,000.

Now, all of the nearly 200 drivers for the Renton, Wash.-based company know that if a camera in their assigned van is broken, “that vehicle doesn’t move until a replacement camera gets put in,” Angle says. “That’s how important it is to us.”

But while it’s clear that employers can measure nearly everything employees do, the question for many is whether they should. To find out, it’s important for companies to have a clear sense of what they hope to accomplish—and to be forthcoming and transparent in their communication with employees. When employee monitoring is done poorly, businesses may find that what they hoped to gain in productivity is undermined by what they lose in engagement and trust.

While it’s clear that employers can measure nearly everything employees do, the question for many is whether they should. 

The Legal Limits of Employee Monitoring

Although employers generally have the right to monitor employees on the job, there are limits to how such efforts can be applied. Also, state laws that cover workplace monitoring vary.

Under Federal Law

Employers generally have the right to monitor employees as they perform their work, although eavesdropping is a gray area. According to National Workrights Institute President Lewis Maltby, location matters. “If an employer wants to put a microphone in an office area and listen to what everybody does all day, that’s perfectly legal,” he says. “But you can’t put a bug in the cafeteria where people are talking about personal issues.” Placing cameras or other monitoring devices in bathrooms and locker rooms is also a no-no. “Employers keep doing this, and they get sued—and they usually lose,” Maltby says.

Under State Law

Laws about workplace monitoring efforts vary, mostly around consent issues—whether the monitoring occurs via e-mail, audio recording or video recording. Legal experts generally recommend that organizations communicate with employees about monitoring and get written confirmation that employees consent to it.

Best Practices

To stay on the right side of the law, experts recommend that you:

  • Avoid targeting a legally protected class to monitor. This includes people chosen on the basis of age, race, gender, religion or disability. If you’re not going to monitor everyone, make sure there is no discriminatory impact on those individuals you select.
  • Keep monitoring devices out of nonwork areas. Nonwork areas include bathrooms and locker rooms where people disrobe.
  • Be consistent in applying monitoring, and avoid the appearance of selective discipline. “Negative perceptions can be critical in driving down employee morale and stirring up discrimination claims,” says Atlanta-based employment lawyer Brett Coburn.
  • Get legal advice before setting up any employee monitoring program. Each situation is different, so seek legal advice before introducing a monitoring program in your workplace.

The Pros

Monitoring employee productivity can be as simple as tracking employee attendance by having workers sign in and out on a work computer or employee portal. In his transportation business, Angle tracks his drivers using refurbished tablet computers that he buys for around $200 each and that are equipped with Google Maps, along with specialized software.

United Parcel Service (UPS) saves millions of dollars each year by using a computer analysis program to monitor its delivery drivers. The technology guides drivers to avoid time- and fuel-wasting left turns on their routes and even steers them to take actions that could increase their efficiency, such as driving past a stop and coming back later.

Under the right circumstances, monitoring can provide a plethora of positive results for employers, including:

Learning how employees work best. Organizations can reap business intelligence from knowing what their employees do every day, says Kate Bischoff, SHRM-SCP, a Minneapolis attorney and former HR director. The benefits include improving organizational structure, identifying what tools employees need, and finding out employees’ most productive periods and which teams work best.

Decreasing distractions. Studies show that a lot of work time is lost to nonwork activities such as March Madness, Cyber Monday and online gaming. HR consultant Corinne Jones, who is based in New York City, has a list of standard online search terms for organizations to monitor, including the names of certain retail sites and, considerably more problematic, pornography hubs. One employer discovered that it needed to add another term: cat videos. “We had an instance of a technology company whose operations team was obsessed with these cat videos,” Jones recalls. By monitoring the company’s Web usage for a month, she discovered that the team had spent a cumulative total of 80 hours viewing funny felines.

Safeguarding field employees. “If an employee is supposed to be back at a certain time and nobody has heard from them,” says Paul Randhawa, senior management analyst at Santa Clara Valley Water District in California, “we can look up on the GPS, see where they’re at and check up on their safety.”

Promoting safety. UPS vans have a “black box” of advanced telematics that document seat belt usage and even how many feet a driver backs up, which is one of the most dangerous maneuvers a driver makes, says Jack Levis, the company’s senior director of process management.

Simplifying timekeeping. Electronic monitoring makes it easier to address attendance issues. “I could run off a report and see how many days someone has missed,” says Cathy Plouzek, SHRM-SCP, director of human resources at Alliance Benefit Group in Peoria, Ill. “With one recent termination, a person was here 90 days and had already missed eight or nine days.”

Serving as a training tool. Many employers record customer calls to train new and current employees about good and bad techniques. “We use it … for continuous improvement,” Plouzek says.

Evaluating performance. David Swanson, SHRM-SCP, executive vice president of human resources for SAP, a technology company in Silicon Valley, says the company uses its own software product to evaluate its workers on a frequent basis. Employees can write a brief summary or even submit a short video about something they are working on. The electronic records lead to frequent conversations about performance that replace “the painful once-a-year performance review,” Swanson says.

Documenting bad behavior. E-mail records can document employee behavior that exposes an employer to potential liability. Several years ago, for example, Swanson handled a case where an employee was clearly harassing a co-worker for a date, including via inappropriate e-mails. Although the employee erased the e-mails after coming under suspicion, his messages were recovered and he was terminated.

The Cons

While monitoring can improve employee productivity, simplify payroll, improve record-keeping and reduce legal liability, it can also sow seeds of distrust and fear among workers who aren’t so keen on having their every move tracked.

“Your employees sometimes feel like Big Brother is watching,” says Dan Quillen, director of internal services, which includes human resources, for the city of Aurora, Colo.

The potential downsides of employee monitoring include:

Increasing employee turnover. Employees may take offense at monitoring efforts. “Absolutely it can affect morale,” Bischoff says. For some employers, “an unintended consequence is they have poor retention because employees don’t like to be monitored.”

Causing stress. Overly intrusive monitoring could actually decrease productivity, Maltby says, because “nobody does a good job with their boss looking over their shoulder.”

Inhibiting work. Because more workers are using social media for their jobs, experts and HR officials warn that having blanket blocking policies can inhibit employees’ work. “We thought nobody needed to have access to Pinterest,” Quillen says. But he found that some city employees who plan craft activities with kids in the summer needed access to the site.

Taking the human out of the equation. Sometimes technology needs a human to override it. Levis recalls taking a UPS van on a test ride with a trainee where Levis pointed out the limits of the company’s advanced technology. “There will always be something that the algorithm doesn’t know about,” Levis says.

Moreover, there’s something to be said for allowing employees occasional “brain breaks” to surf the Web or visit social media sites. Doing so may rejuvenate them and make them more productive in the long run. It also acknowledges workers’ humanity and the fact that people aren’t like machines that can operate continuously without rest or breaks.

Reduce Fear and Loathing

If your organization decides monitoring employees is right for your business, these measures can help reduce friction:

Communicate early. Getting employee buy-in before monitoring begins is critical. The Santa Clara Valley Water District educated its employee bargaining units on why monitoring was being put in place, how it would be done and how it would affect employees. All of these issues were discussed at various meetings over six months before monitoring began.

Don’t be penny-wise and “person foolish.” Too much disruption can demoralize your workforce. Acting on pure analytics without considering the human effect “might throw everything up in the air and make things different just to save a penny,” Levis notes.

Avoid punishment and focus on improvement. Toor stresses that the biggest takeaway from her high-tech monitoring of nurses is that it works only when employees don’t fear retribution. “We’ve never used it for punitive reasons,” she says.

The Future

With all this monitoring going on, it might seem like people’s thoughts are all they have left to call their own. But even that may be changing. Although not widely adopted yet, new language-processing tools can review instant messages and e-mails from groups or individuals to interpret users’ underlying thoughts and feelings. This new wave of technology is called sentiment analysis, also known as opinion mining.

New language-processing tools can review instant messages and e-mails from groups or individuals to interpret users’ underlying thoughts and feelings.

“What it does is look at word choice, and it attaches a meaning to those words,” Bischoff explains.

Although it was developed as a marketing tool, companies are starting to use sentiment analysis as a way to monitor trade-secret theft or determine whether an employee is about to quit, Bischoff says.

Grand Rapids, Mich., office furniture and technology company Steelcase has already experimented with technology that reads an employee’s facial expression along with his or her words.

Working with a company spun off from an MIT laboratory, Steelcase tested technology using a cellphone-sized sensor device with a microphone and a camera, according to Dave Lathrop, the company’s director of applied research and consulting. Some of the research is aimed at seeing how people interact, using technology to read nonverbal clues.

One day in the future, Lathrop predicts, the results of such tests might serve to encourage a shy employee with good ideas to speak up in meetings. A high-tech badge could send some kind of alert to remind the employee to contribute to the discussion.

Lathrop hastens to note that the employees who were tested had volunteered to be tracked anonymously to see if the research was feasible. The goal of the research, he says, is about developing products, not about monitoring employees continuously. He says it’s all about helping people do their jobs better.

But there is concern that combining technology and employee monitoring could result in an all-intrusive society once limited to science fiction. Some might compare it to the “thought police” described in the dystopian novel 1984.

“I think George Orwell would agree that Big Brother has arrived in employment,” Bischoff says.

Lee Michael Katz is a freelance writer based in the Washington, D.C., area.