Face it: Your employees are distracted. According to IDC Research, 30% to 40% of employee Internet activity is non-work-related, and SexTracker reports that 70% of all Internet porn traffic occurs during the 9-to-5 workday. Such workplace Internet misuse costs U.S. companies $63 billion in lost productivity annually, according to Websense Inc.

Employers have taken proactive measures - including email monitoring, website blocking, phone tapping and GPS tracking - to improve employee productivity, minimize litigation and other risks, and promote safety.

The technology options for monitoring work activity are countless, conclude the American Management Association and The ePolicy Institute. The groups' 2007 survey determined keylogging software to be the most common method, with 45% of employers tracking content, keystrokes and time spent at the keyboard. A similar number of companies (43%) store and review computer files, while only 12% follow the blogosphere to see what people are writing about the company, and a mere 10% monitor social networking sites.

Other, less common tactics include remote webcam viewing - an employer uses a worker's webcam to snap images at certain intervals to prove they are working. Activity tracking requires individuals to log activities in real time or when prompted at certain intervals. A similar, though less time-consuming option to track teleworkers is pop-up confirmations that employees must click to acknowledge, thus making sure they are at their computers and working.

Though some privacy experts argue that many of these tactics are too invasive and do more harm than good, Alex Konanykhin, CEO of Internet technology firm KMGi, believes they are a necessity in dealing with the realities of a modern-day workforce.

"You cannot be everywhere at every time," he notes, suggesting that multinational employers who hire remote workers or have offices across the globe can use monitoring technology to tighten a geographically widening community.

"For the remote workforce, [a tool like this is] a must-have," Konanykhin says, adding that even for in-house employees, it's a great tool for managers to help keep track of the projects everyone is working on.

KMGi created the Transparent Billing application to manage a primarily outsourced employee base in an international setting. The application is a project management tool that automatically takes screen shots of a user's activity on the job, tracks billable hours and allows employers to monitor the progress of projects in real time.

The platform's aesthetic feels like a fantasy basketball website, with detailed metrics for tracking an employee's work that day, week or month. A manager can see screen shots of documents an employee has opened and worked on, as well as websites visited. They can even view the images in a slideshow to see how work has progressed. Managers also can locate details on a specific day or month to find out how much time and money was spent and how many users were active during that time.

"There are no surprises [for the employer] because they know exactly what type of bill they're going to get at the end of the month, so they eliminate all inefficiencies," Konanykhin explains.

Interactivity is seamless, with handy buttons for reaching the employee by Skype, email or instant message. And on the other end, the employee can turn the program off with a single click so they are not monitored during their off-hours or if they need to complete a personal task during the work day.

 

Balancing privacy and policy

"An employer doesn't monitor [employee activity] because they are nosy," says Wade Ballard, partner, Ford & Harrison LLC. "I see more companies adopting these policies and procedures" due to a struggling economy and a globally dispersed workforce.

Rather, an employer elects such a program or process for a variety of other reasons, such as increasing productivity.

"How do you really know [if a remote worker] is spending eight hours a day working unless you are looking at keystrokes, computer activity, screen shots or by monitoring emails?" asks Ballard.

He adds that many employers track computer and email use and Internet access to ensure employees aren't setting the company up for harassment lawsuits, as well as to prevent leaks of sensitive or private company information.

"People say that it's horrible employers are doing this, but employers have a lot of legitimate reasons for check up on [activity]," Ballard defends.

Litigation concerns also play a role, where many employers use electronic evidence to defend themselves in lawsuits and regulatory investigations. But should employers worry that workers could sue over the very tools they use to combat expensive legal costs?

"The key to protecting an employer from being sued and losing, and the key to preventing a policy from being challenged, is notification to the employee," Ballard explains. "In the U.S., it boils down to whether the employee has a reasonable expectation of privacy. If they do not, the employer is permitted to monitor [the employee's] behavior. Even if they have an expectation of privacy, if the employer has a legitimate business reason and goes about its monitoring at an appropriate level, [monitoring may be allowed]."

While only two states, Delaware and Connecticut, require employers to notify employees of monitoring, 83% of employers inform workers that the company is monitoring content, keystrokes and time spent at the keyboard, according to AMA and ePolicy. Further, 84% let employees know the company reviews computer activity, and 71% alert employees to email monitoring.

"It's important to have a detailed, very specific policy to the extent you're dealing with remote workers because they aren't in the workplace," Ballard says. He adds that courts typically uphold an expectation of privacy much more in the home than in the office. "The more detailed notice you give your employees, the better off the employer will be if it's challenged [legally]."

Ballard advises employers to include language similar to, "we reserve the right to monitor by such means including, but not limited to ... " in their policy, so they "communicate the details, but don't box [themselves] into a corner," he says. When monitoring European employees, Ballard recommends employers pay attention to the latest EU rulings as well as specific national laws and regulations in each country.

 

Is it worth it?

Not everyone is convinced monitoring technology is the answer to modern workplace problems. In fact, the occasional electronic distraction has been shown to increase workers' engagement and productivity according to a 2011 study from the National University of Singapore.

"It's far from clear that all this monitoring is improving the bottom line one little bit," says Lewis Maltby, president of the National Workrights Institute. "Why do employers monitor anything and everything? Because they can. I've asked more employers than you count why they monitor, and the answer always is, 'It couldn't hurt.'"

Maltby admits that it is only natural to want to know everything, but it's a lot harder to manage by objectives than spying. "It's more effective to manage by objectives than back-seat driving, but it's also more difficult. [Monitoring technologies are] an easy cop-out," he adds.

He advises employers to detail what they expect their employee to accomplish and determine work issues based on success. "Not every job is that quantifiable, but most jobs that you work at a desk, you can find a measurable objective," he says.

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