Employee monitoring has become something of a trend since remote working became more of a norm than an exception, with 68% of US workers reporting experiencing at least one form of electronic monitoring while at work.
Whereas employee monitoring has gained a reputation as being overly intrusive or unnecessary, it’s useful and advantageous to both organizations and employees alike. In fact, employee monitoring can be important for organizational success and compliance, while it can provide employees with a sense of safety and aid their career growth.
In this guide, we’ll take you through the definition of employee monitoring, its pros and cons, how it can be used, some examples of employee monitoring software, and a couple of frequently asked questions to help your organization get the most out of employee monitoring.
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What is employee monitoring?
Employee monitoring, sometimes known as employee surveillance, is the process of observing and tracking employees’ work attitudes and behaviors in the workplace for the purposes of work productivity, security, and legal and regulatory compliance. This may entail monitoring computer use, e-mail, internet, phone calls, or employee location using spyware and employee monitoring software.
Employee monitoring was used by around 60% of US employers in 2020 and is expected to rise to 70% in 2025. It’s used for an ever-expanding variety of purposes, such as ensuring employees aren’t violating any company policies and regulations, reducing the risk of industrial espionage, and also checking that the working environment is healthy and positive. It can also be used to give feedback to employees in their appraisals — all of which is achieved through tools and software that include time-tracking apps, keystroke loggers and GPS tracking.
Employers can greatly benefit from employee monitoring, and it’s becoming more commonplace, especially in the era of hybrid and remote working. Nevertheless, monitoring must be done in a way that is respectful to employees and considerate of their rights, with consent obtained.
Ultimately, employee monitoring is governed by rules and laws, with the bottom line being on ensuring employees are appropriately monitored with the minimum impact on their autonomy and job satisfaction.
Types and examples of employee monitoring
Employee monitoring comes in many different shapes and forms, suited to different types of organizations. The following is a list of different types of employee monitoring, with an example of each one:
Computer and internet monitoring
Employers can monitor and view websites visited, the duration of visits, and web searches made. Program usage can also be checked to see if applications are being used for work purposes. Examples of this include using tools like Teramind or ActiveTrak to track the time spent on social media applications during work hours.
Closed circuit television (CCTV)
Another commonplace form of monitoring, CCTV is used to observe physical locations to prevent violence and theft, as well as to ensure that employees are obeying company rules. An example is the use of CCTV in warehouses to avoid loss of stock.
Email monitoring
Here, employers read through emails that are being sent and received to ensure that information is being communicated correctly and appropriately, as well as to avoid leakage of sensitive information. An example of how this is used is opening outgoing emails to flag content that is sensitive or unprofessional.
GPS and location tracking
GPS tracking systems can check the best route and can confirm the working location of employees. This can be achieved by using real-time tracking to monitor sales representatives or delivery drivers to confirm visit times and locations.
Keylogging
Employers can use keylogging technology to monitor everything that the employee types, including texts, emails, reports and, in some cases, even passwords. Keylogging can be used to track the sending of certain texts, images or videos that have no relation to work during working hours.
Phone monitoring
A common form of employee monitoring, phone monitoring is widespread in customer service positions. Calls may be listened to or recorded, monitoring employees for training and quality purposes, such as replaying support calls to determine the tone of the employee and their compliance with customer service standards.
Time and attendance monitoring
Software or biometric devices like fingerprint detectors can track employees versus their schedules, registering the time of entry and exit, and reporting on work hours and rest periods.
Benefits of employee monitoring
Why monitor employees? Staff monitoring is one of the most important practices that companies use to increase productivity, protect their assets and ensure compliance. The following is a list of the five most significant advantages of employee monitoring:
1. Improved performance management
Employee monitoring can support employees’ performance management. Through monitoring productivity and other indicators (such as time spent on tasks, the quality of work, and quantity of work), employee monitoring software can identify strong performers and also those who might need more training.
This data is useful, as it reduces the risk of conscious or unconscious bias in performance management interventions, and it boosts the credibility of goals and development programs. Feeding back to employees the data from these monitoring exercises can help them develop themselves and thus contribute to career development.
2. Improved productivity
A key advantage of employee monitoring is improved employee productivity. Because they’re aware their work is being monitored, or that their attendance is being reported in real time, employees will feel the need to concentrate more and have greater awareness over how their working time is used.
Leaders can use monitoring tools to call on unintentional bad habits and work with management and employees to install more productive work practices that benefit everyone. Additionally, time-tracking software can support employees in setting and reaching their goals, leading to personal success as well as organizational efficiencies.
3. Legal and industry standards compliance
Organizations operate in complex legal and statutory environments, and employee monitoring software can help them remain compliant with all applicable standards.
Indeed, employee monitoring facilitates compliance processes by recording activities, communications and transactions. In the case of audits or other checks, the accuracy of data can be relied upon to a greater extent and thus supports the organization in meeting its legal obligations and avoiding penalties such as imprisonment, fines or reputational damage.
Monitoring can also support internal policy enforcement, ensuring employees’ adherence to organizational standards and working in a fair manner that reflects the values of the organization.
4. Resource management and cost saving
Employee monitoring can be useful in determining when resources are not being used to the fullest potential — for example: underutilized software licenses, idle machinery, or overtime being utilized for no reason. Based on detailed analysis on how employees use organizational assets, managers can improve their processes, find a way to reduce costs and make more informed, analytical decisions on how to invest money.
Furthermore, employee monitoring can help with the early identification of problems or help remedy small issues before they become risky ones, such as an emerging security threat or an error that leads to larger financial losses. In this sense, employee monitoring can be seen as an exceptionally useful proactive business tool, offering reactive benefits to real-time situations.
5. Security and data protection
Employee monitoring is an essential part of an organization’s safety and security procedures, as it can significantly support the protection of confidential information as well as prevent data loss or theft. With the support of monitoring tools, it’s possible to track unapproved access to files as well as unauthorized downloading or usage of software, and receive swift security alerts.
In sectors that handle sensitive information such as finance or healthcare, security and data protection monitoring is vital, as it will not only protect organization operations but also safeguard against reputational loss, lawsuits and fines. Employee monitoring can also help in safeguarding of employee information and payroll data, meaning that it can even support the people it is monitoring.
Disadvantages of employee monitoring
Employee monitoring is obviously quite a divisive subject and, if it’s not used in the right way, it can adversely impact employees and the organization. Here are the five major disadvantages of choosing to monitor employees at work:
1. Costs of employee monitoring
The development and implementation of employee monitoring systems can be quite costly, especially for small and medium enterprises. The main expenses to factor in are hardware integration, software licenses, training, and the management or storage of data that is being gathered.
The allocation of resources needs to be considered as well, for example: balancing employee monitoring controls as well as developing performance and improving behaviors. Organizations should, meanwhile, consider the ROI of employee monitoring software before they fully commit to it.
2. Impact on employee trust and morale
It’s human nature that people don’t like to be watched while they’re working. Employees value trust, and high-trust organizations are regarded as favorable places to work. Monitoring can be interpreted by employees as the organization not having confidence in their ability to operate, which can lead to low productivity or employee morale.
Indeed, an employee who doesn’t feel trusted will become disinterested and unaligned to organizational values and goals, and may, ultimately, consider moving to a different employer. These impacts can erode an organization’s employer brand over time, making the organization less competitive.
3. Increase in stress
Employee monitoring can precipitate a culture of “watching”, where employees feel the need to always be careful and perform at their best. This can lead to adverse effects on mental health, such as an increase in workplace stress and a higher risk of burnout. Also, workplace absences can increase, and job satisfaction can decrease.
Employees might also be extra cautious in their work or operate in an unnatural or risk-averse way. This can lead to performance shortcomings, as well as hamper positive cultural behaviors such as being daring and creativity, and causing loss of competitiveness in the long run.
4. Legal and ethical implications
Improper or unauthorized use of employee monitoring software can lead to legal actions by employees or regulatory authorities.
Many countries have very strict laws on workplace surveillance, data protection and employee rights. As such, the consequences of non-compliance include significant financial penalties, legal action and reputational damage. From a cultural and employer branding point of view, excessive monitoring can be perceived by external commentators that your organization is more focused on control than employee experience.
5. Privacy violations
Some employee monitoring practices such as keystroke logging, CCTV, and website and email monitoring can be classed as intrusive or non-compliant with privacy laws if they’re not conducted in the right way or without consent obtained. Employees might perceive their privacy as being violated, leading to tension, stress and complaints in the workplace.
Employers must ensure that their employee monitoring practices are conducted in accordance with local labor laws, and that employees are aware of their rights as well as their employers’ rights. If this doesn’t happen, then employees can claim their monitoring is too intrusive and against the principles and legal tolerances of privacy.
Employee monitoring software options
There are many varieties of employee monitoring software out there, all of which provide various ways of managing employees’ productivity, security and development, whether they’re remote or in the office. Here are five popular options:
1. ActivTrak
ActivTrak is a productivity-focused employee monitoring solution that is simple and straightforward to use. It primarily monitors application and website usage, as well as time spent on tasks. It offers comprehensive analytics as well.
2. Hubstaff
Hubstaff is famous for its time-tracking and productivity management tools. It offers GPS tracking, screenshotting and task management, and is geared especially to remote and geographically diverse teams.
3. Teramind
Teramind is an all-encompassing employee monitoring solution that includes many features such as keylogging, email surveillance, screen capturing and behavioral tracking. It’s a great choice for security-conscious organizations with a high need for monitoring.
4. Time Doctor
Regarded as a market leader in employee monitoring and used by companies such as Apple and RepStack, Time Doctor provides time tracking, website usage and screenshotting. It’s very useful for freelancers managing their own time as well as organizations, and provides payroll integrations too.
5. Veriato
Veriato is a cloud-based tool with many employee monitoring functions, making it a great choice for keeping on top of various risks. It provides activity reports, behavior analysis and security reporting.
FAQs about employee monitoring
If you’re wondering where to start with employee monitoring or simply deciding whether it’s going to be beneficial for your organization, here are a couple of frequently asked questions to help you demystify employee monitoring a little more.
Q: Is employee monitoring legal?
Yes, employee monitoring is legal, but the legislation governing how it’s used is different depending on the country or territory you’re based in.
The use of employee monitoring in the workplace is generally permitted as long as, one, consent is granted by the employee (this is usually tied into wider data protection consent) and, two, the monitoring is only used for business purposes such as increasing productivity, protecting information or fulfilling legal obligations.
It’s important to understand your legal obligations when it comes to employee monitoring. In the US overall, federal law allows employee monitoring if notice is given, whereas some states require explicit consent.
Not following these specific obligations when it comes to employee monitoring can have serious consequences. Consequently, it’s important for organizations to research their obligations and develop comprehensive employee monitoring policies to protect both them and their workers.
Q: Is it ethical for employers to monitor their employees?
If it’s conducted appropriately, there’s nothing inherently unethical about monitoring employees in the workplace.
From an ethical standpoint, employers need to ensure that the need for supervision doesn’t infringe on the privacy of employees. This lies in the legally tested notion that if employee monitoring is conducted for business reasons, then the requirement to do so can be considered reasonable and proportionate — especially where employees know how their data is used, what monitoring is conducted, and have consented to it.
On the other hand, intense, invasive or secret employee monitoring, or surveillance of personal data, is grossly unethical and affects employee relations, while it can lead to legal action as well as reputational damage. Employers must always risk-assess their employee monitoring policies and determine if they’re proportionate to the need or expected result, and if the processes are rooted in the principles of fairness, decency, openness and data protection.
Final thoughts
Employee monitoring is an important element of safeguarding organizational performance. Not only does it bring many benefits to organizations, but it also aims to support employees through making them more productive, happier and developed at work.
To get the most out of employee monitoring and to avoid negative effects, you need to ensure it’s done in the right way. This begins with building a robust and transparent employee monitoring policy, informing employees what consent is needed, how their data is used, and the outcomes of employee monitoring.
Research the various types of employee monitoring software on offer and choose one that is right for your needs. Meanwhile, make sure that you routinely check in with your employees to see how employee monitoring is landing, and gather feedback accordingly. This will ensure your organization benefits from employee monitoring while remaining a fair and equitable employer.
What are your thoughts on employee monitoring? Has your organization benefited from it or suffered in terms of employee trust and productivity? Let us know in the comments section below.
This article is a complete update of an earlier version originally published in 2019.