Monitoring employee productivity with AI? Better benefits can restore trust

In the mass shift to remote work and a bitter return to office for many employees, companies have turned to artificial intelligence to monitor employee productivity. 

While AI-powered surveillance tools may have promised a way to keep tabs on dispersed teams, these tools may be undermining the very productivity they aim to enhance. Tracking keystrokes to using webcam footage can also destroy a sense of trust between employers and employees, creating a shaky foundation for business success in the future. 

A recent report from Website Planet reveals that 84% of AI surveillance cases emerged after 2019, with a sharp rise during the pandemic. From global corporations like Amazon and Microsoft to financial institutions like Barclays, companies have adopted tools that track employees' digital activity, location and even emotional states in the name of productivity.

Read more: 4 ways to help employees maximize their time

However, the human cost is becoming impossible to ignore. Employees subjected to AI surveillance are 1.5 times more likely to report poor mental health, as well as experience increased burnout, emotional exhaustion, and disengagement, according to research from the American Psychological Association.

"Employers have to acknowledge that employees' anxiety around AI is reinforced by various sources," Dimitris Tsingos, co-founder and president of workplace technology vendor Epignosis, previously shared with EBN. "If you don't do anything at all, that anxiety will grow and lead to more turnover and less productivity. So, from a strictly business point of view, it's not wise to decide to ignore it." 

Far from motivating employees, surveillance often triggers anxiety and leads to distrust. In some cases, it even backfires. A study in Harvard Business Review found that employees who knew they were being watched were more likely to cheat or cut corners. Others admitted to faking productivity — leaving apps open, pre-scheduling emails, or logging in via mobile devices — to appear active under the gaze of tracking tools.

Read more: Chatbot therapists? How AI is revolutionizing mental health

Why surveillance isn't the answer

Many AI tools attempt to quantify productivity through simplistic metrics: Time spent on screen, number of emails sent or mouse movements. But these inputs fail to capture the full scope of creative, collaborative, or strategic work. They also carry a significant risk of bias — facial recognition software, for example, may interpret expressions differently based on gender or race, leading to skewed outcomes.

"Transparency is critically important when an organization is implementing any type of AI," Sara Gutierrez, chief science officer at talent management solution SHL, previously shared with EBN. "The best thing organizations can do is set up some form of official governance framework that enables them to show employees how the AI models work and explain why they're confident it has the least amount of bias." 

Read more: Using AI to recruit? You're legally responsible for the bot's bias, EEOC says 

As legislation struggles to keep pace, only the European Union has implemented robust safeguards through its 2024 AI Act. In contrast, the U.S., Canada, and the UK rely on fragmented laws that often leave employees vulnerable.

If unchecked, AI-powered decision-making can lead to a dystopian workplace where software — not supervisors — determines performance, pay, and promotions. Can benefit managers find a better way to move forward? 

Productivity without surveillance: Benefit alternatives to consider

Employers can foster a culture of trust and engagement by offering supportive, high-impact benefits. Flexibility is a foundational element: By giving employees control over when and where they work, organizations can reduce burnout and boost performance, allowing individuals to align their work with their energy levels and personal commitments.

Supporting mental health is another key investment. Rather than tracking behaviors, employers should provide access to counseling services, mindfulness programs and wellness stipends. Manager training is also essential to help teams recognize signs of stress and provide meaningful support.

Read more: How AI is improving workplace wellness offerings

Performance management should shift away from input-based metrics like keystrokes or screen time and instead focus on outcomes. Setting clear goals and evaluating results — along with peer and manager feedback — creates a more accurate and motivating framework for measuring success.

Growth and development opportunities also play a critical role in sustaining engagement. Employers can offer tuition reimbursement, upskilling courses, and mentorship programs to ensure employees feel valued and supported in their career journey.

Finally, transparent communication, autonomy, and meaningful recognition go a long way toward building a workplace where employees are motivated by purpose — not pressure. When workers feel trusted and empowered, they're far more likely to bring their best selves to the job.

"If you have a people problem, you will have an AI problem. As multi-agent systems redefine the workplace, the challenge will be to integrate and manage them securely and effectively," Amy Webb, CEO of Future Today Strategy Group, previously shared with EBN. "Companies that already know how to enable their human workforce will succeed — breaking down silos, fostering collaboration and ensuring the entire organization works toward common goals."