Employee Monitoring Has Unintended Consequences

S. Schuchart

Summary Bullets:

  • Productivity monitoring software causes more unintentional harm than good.
  • Companies that implement productivity monitoring software will suffer from more turnover and have a much more difficult time in hiring.

While often talked about separately, the Great Resignation and work from home (WFH) are inextricably linked.  Both are pandemic-born and have propagated a number of technological trends, including greater focus on security, collaboration, and productivity. But technology is not always the solution. In this case, the proliferation of monitoring software and the relative enthusiasm for it can and will backfire spectacularly.

WFH is here to stay, no matter what CEOs and traditional business pundits say.  Employees working from home are generally happier and more productive, as well as using fewer resources in a world where a company’s environmental, social, and governance (ESG) standing is becoming more important to its customers and partners.  There are other benefits as well.  Companies and employees are no longer geographically constrained; jobs and people to fill them can come from almost anywhere, widening the pool of opportunities for both.

However, some companies are unable to accept the new reality of WFH or are uncomfortable with it. These companies are either trying to make work from home unpalatable or have genuine but misguided ideas about productivity. Many of these companies have turned to using productivity monitoring software to keep tabs on employees. These kinds of software can monitor mouse movement; capture keystrokes, email, Zoom sessions, and screen shots; and even allow managers to live view employees anytime they want. Some even claim to be able to help prevent insider trading and industrial espionage.

It seems appealing to automate management tasks, like ensuring that employees are productive; and of course, security and compliance are always easy sells.  Employee productivity software is a great example of something that companies can do but shouldn’t. Beyond the obvious privacy considerations of things like live-view webcams, productivity software sets the tone of the relationship between the company and the employee. Widespread use of productivity monitoring software signals a profound distrust in employees and infantilizes them. It turns what should be a professional and mutually beneficial relationship into rivalry, management vs. employee. The lack of trust and the lack of professional regard is a real demotivation for employees, particularly those that are not having productivity issues.

What happens if two out of twenty employees are having productivity issues and the company implements productivity monitoring software on all twenty? The company will likely gain back productivity for those two employees. But the rest, who have been performing well, will be demotivated and demoralized. Two underperforming employees are better than eighteen demoralized, de-motived, and resentful ones. Employees find it unfair to be lumped into the same category as underperformers, which can lead them to go looking for new jobs, increasing turnover in the midst of the Great Resignation.

To make things worse, the extensive use of productivity monitoring software becomes a hiring issue. For potential new hires that are not near retirement age in particular, there is a profound preference for companies that treat them well, compensate well, and trust them enough not to micromanage. Happiness is valued more than simple compensation. Potential new hires will accept jobs at competitor companies for less money if it means no productivity monitoring software.

Managing people is fundamentally hard. The idea of making managing easier, combined with handy-dandy dashboards and ready-made metrics, is something many managers have a hard time resisting. There is a case to be made that for employees who are having productivity problems, monitoring software could be used as part of a performance improvement plan. But outside of limited use cases like that, it’s on the manager to do the real work of communicating with their employees, understanding their strengths and weaknesses, and fostering a relationship where the trust is mutual; employees will do the work they are paid to do, and employers will not treat them like children or serfs. Wide implementation of employee monitoring software won’t change what managers really need to do, but conversely, it could make it a lot harder in the long run.

What do you think?

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