When is it okay for employers to monitor workers? (5/10/2008)

Keeping track of employees could mean the loss of trust and decreased productivity

Technology is constantly evolving to offer managers new ways of observing employees. From special software that tracks what people do at their computers to so-called "reality mining" which provides insight into how well people get along and accomplish tasks, there are numerous options for bosses to keep track of potential workplace issues.

The question is, can monitoring employees backfire?

Absolutely, says Kurt Dirks, professor of organizational behavior in the Olin Business School at Washington University in St. Louis.

"According to some economic theories of organizations, this approach might be deemed appropriate," Dirks says. "Workers are going to shirk and managers are there to monitor them." The model is clearly appropriate in some situations because it can maximize employee contributions and minimize hazards. For example, this model works well in situations where incentives can be clearly tied to desired key outcomes, such as a rise in sales.

However, in other situations where this is not the case, some of the downsides may tip the scales.

"In many situations what you often need from employees is the willingness to adapt to the situation and go beyond what you specifically ask of them. When you monitor, it may lead people to reciprocate what they see as a lack of trust," Dirks says. "As a consequence, while employees might not purposefully act negatively, they might withhold positive behavior such as taking initiative."

As a result, employees are less likely to surpass expectations. When it comes to customer service, for example, that lack of motivation could be costly.

So, is it wise for a company use its resources to monitor employees?

"It would obviously make sense in situations where there is potentially high damage to the firm, such an investment company with concerns over the security of proprietary information," Dirks says.

One thing that might alleviate the negative impact of monitoring would be to let employees know about it, Dirks says. "To the extent that an employer reveals the monitoring and is transparent about what it is and why they're doing it, workers are more likely to see the system as fair. Fairness is a big determinant of trust and the willingness to go above and beyond. If the system is designed fairly and the message promotes a just view, then it should limit the negative consequences."

Note: This story has been adapted from a news release issued by the Washington University in St. Louis

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