• Monitoring employees is legal but it’s not always advisable as it may violate data privacy laws and make employees feel like they’re being micromanaged.
  • Employee monitoring involves everything from time tracking to watching employees’ screens in real-time without physically standing over their shoulder.
  • If you’re trying to improve employee productivity, you’re better off implementing a project management system and improving your performance management processes.
  • Nov. 26, 2024: Bryan Driscoll updated to reflect changes in employee monitoring software and mindset. He also added sections on why HR should be involved in employee monitoring decisions and the legal implications every business owner should know. Kara Sherrer wrote the original version of this article, which was published on February 15, 2023 and previously updated on January 2, 2024.

As a non-practicing lawyer and HR consultant, I have a deep understanding of the legal and practical aspects of employee monitoring. My background equips me with the knowledge to navigate the complexities of compliance while also considering the human element in the workplace. My goal is to provide advice that’s not only legally sound but also fosters a positive and productive work environment.

TechnologyAdvice is able to offer our services for free because some vendors may pay us for web traffic or other sales opportunities. Our mission is to help technology buyers make better purchasing decisions, so we provide you with information for all vendors — even those that don’t pay us.

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What is employee monitoring?

Employee monitoring refers to the use of tools and strategies by employers to track workforce activities and productivity. This can include monitoring:

  • Computer usage.
  • Internet browsing.
  • Emails.
  • Physical movements.

In some cases, employee monitoring can improve productivity and provide insight into workplace activities, but it can also erode employee trust and make workers feel like they are being unfairly punished and micromanaged.

In some cases, the best solution may be to implement performance management software. This alternative to workplace monitoring helps cultivate a culture of trust and transparency at every level of the business.

However, workplace monitoring is a necessary precaution for businesses, like those in the finance, field service, and healthcare industries. It is possible to successfully implement workplace monitoring tools and tactics as long as companies follow a collaborative and transparent approach that doesn’t violate employees’ privacy rights.

Also read: Why is Employee Performance Management Important?

Why should HR be involved in employee monitoring?

In any business, the HR department is responsible for maintaining the balance between the employer’s right to monitor employees and the employees’ right to privacy. This balance is delicate, and mishandling it can lead to decreased morale, a loss of trust, and potential legal challenges. 

Not all forms of monitoring are created equal, and some are more intrusive than others. For instance, monitoring software that tracks keystrokes or screenshots might seem necessary in highly regulated industries like healthcare or financial services, but in other environments, it could be perceived as overly invasive. The HR team’s role is to assess whether these tools align with your company’s values and abide by relevant laws.

As an HR leader, you must work with other stakeholders to develop clear policies that explain how you will implement employee monitoring. These policies should be transparent so all employees understand what is being monitored and why, along with how the data will be used. For example, you may decide to use the data you collect to identify productivity trends and provide recommendations that will improve employees’ work-life balance. 

The HR team is also responsible for fielding concerns, grievances, and accommodations requests that are connected to employee monitoring. Employees may feel uncomfortable or even violated if they believe they are being overly scrutinized; in some cases, employee monitoring without clear implementation guidelines can lead to discrimination or harassment. It’s your responsibility to establish clear processes and communication channels for employees to voice their concerns and resolve issues like these. Otherwise, employee monitoring might create more problems than it solves.

Key types of employee monitoring

Employee monitoring can take various forms depending on the business needs and the level of oversight required. Here are some common types of employee monitoring, along with some popular tools.

Screen monitoring involves capturing screenshots or recording video of an employee’s computer screen activity. The main goal of screen monitoring is to ensure employees are on-task and not using their work devices for inappropriate activities.

ActivTrak is one of the most popular screen monitoring software options.

Keystroke logging, or keylogging, records every keystroke a user makes on a computer. Businesses often use this tool to protect sensitive company information — even if employees have good intentions, their actions could accidentally lead to password sharing, data breaches, and trade secret infringement.

Refog and Spyrix are popular keystroke logging tools.

This type of monitoring records an employee’s browser history and email communications. Like keylogging and screen monitoring, it helps ensure employees are using company resources appropriately and not engaging in prohibited activities. However, this form of monitoring only captures the surface-level data

For internet and email monitoring, InterGuard and SentryPC are popular options.

GPS tracking software monitors the location of employees, particularly those who work in the field or travel between job sites. It’s commonly used to give customers expected delivery times or service windows, validate on-site attendance, and recover lost or stolen company equipment. You may also configure it to restrict where employees can clock in and out.

Lots of time clock software options like QuickBooks Time and Connecteam include some level of GPS tracking, but you might need more advanced trackers like Fleet Complete or Geotab if your team primarily operates in the field.

For more time time tracking options, you can check this Time Tracking Software Guide.

Time tracking monitors when employees clock in and out for shifts and the time they spend on specific tasks or clients. This helps in managing employee timesheets, ensuring productivity, calculating payroll accurately, and making sure clients and customers are billed appropriately.

Popular time tracking software options include Clockify and Toggl.

Video and audio surveillance technology uses cameras and/or audio devices to record employee behavior and ensure physical security in the workplace. It’s particularly common in retail, warehouses, and other environments where theft, injuries, and similar risks are common.

Popular surveillance options include Nest and Arlo.

Pros and cons of employee monitoring

Pros

  • Increased productivity
  • Faster threat assessment
  • More evidence-based decision-making

Cons

  • Lower employee morale
  • Higher turnover
  • Weakened cybersecurity
  • Bigger compliance risks

What are the benefits of workplace monitoring?

When done right, workplace monitoring can offer many potential benefits to your business. Namely, this kind of monitoring can lead to increased productivity, faster threat assessment, and more evidence-based decision-making opportunities.

Some companies find that increased accountability leads to greater productivity and efficiency. In turn, this helps to prevent time theft and boosts team performance overall. This also contributes to increased revenue, since the company is getting more work for the same amount of money and time.

Also read: How Performance Bonuses Help Avoid Bias and Increase Productivity

For companies worried about security, workplace monitoring can help IT and security teams identify potential threats and breaches more quickly, especially bad actors inside the company. Surveillance also makes it easier to enforce certain company policies, like internet usage rules.

Finally, data gathering contributes to business intelligence and workforce analytics in platforms like Insightful, providing a more complete picture of employee activities. This data can then be used to inform evidence-based business and personnel decisions.

What are the drawbacks of workplace monitoring?

The benefits of workplace tracking are also balanced by the potential negative effects of employee monitoring. These include lower employee morale, higher turnover, weakened cybersecurity, and bigger compliance risks.

For one, monitoring can actually backfire by reducing a sense of agency and making employees feel less responsible for their actions. In turn, this encourages them to take unapproved breaks, work more slowly, and steal office equipment, among other undesirable behaviors.

Employees may also feel like they are not trusted by the company and are being punished for no reason whatsoever. If the employee monitoring software was implemented in response to a particular individual’s infraction, then the entire team or company may feel like they are bearing the consequences for one person’s behavior. This can foster resentment, deplete morale, and cause a breakdown in team communication.

If employees are not told about the surveillance and then later find out about it, they will likely feel a deep sense of distrust in the company, and may even feel betrayed by management. Feeling lied to can also breed resentment among employees and cause them to start looking for new jobs, potentially increasing turnover.

Too much data capture and access can actually increase security concerns. The more information that is gathered, the more vulnerable it becomes to breaches and hacks. IT and security teams might also inadvertently capture private employee information that the company should not have access to, resulting in major privacy violations.

It also takes time to sort through monitoring data, and that data doesn’t provide the whole context of employee actions. Automating decisions based on employee tracking surveillance can lead to wrongful termination and other outcomes that risk discrimination.

How should HR teams approach monitoring employees?

There are many situations that make workplace monitoring software a smart risk management investment, and in these cases, human resources (HR) teams must approach workplace monitoring with sensitivity and care.

Identify specific needs and goals

HR teams need to think deeply about whether or not workplace monitoring will address the symptoms or the underlying problem. For instance, if you don’t trust your employees not to steal, then you may be better off hiring new people that you do trust than obsessively monitoring workers that you don’t.

Decision-makers should also reflect on whether their lack of trust stems from the employees’ behavior or from top-down pressure from micromanaging leaders. If performance issues are a concern, it may be more productive to broach the concerns with the employee(s) and explore the possibilities of performance management software than to jump straight to workplace surveillance.

Research potential software solutions

As business leaders weigh these questions, they need to keep in mind that different workplace monitoring tools are more suited to certain goals. For example, security cameras can help prevent theft but won’t protect sensitive data from being hacked.

Meanwhile, remote monitoring software can help prevent time theft by work-from-home employees, but it won’t help the company keep track of field techs’ locations. Workplace monitoring tools should match the goals your company is trying to accomplish.

Ask employees for feedback

Transparency from the start is of paramount importance, so HR teams should ask for input from employees on what kinds of surveillance and what level of monitoring they would be comfortable with. For example, personal devices should not be monitored, even if employees do work activities on them.

Once a decision is made, HR leaders should communicate what data is being collected, how often it is updated, and how long it is kept. Leaders then need to be able to clearly explain how workplace monitoring contributes to achieving legitimate business goals, such as hitting revenue targets or keeping techs safe in the field.

Furthermore, this data should also be used to benefit employees—by informing performance bonuses, for example—instead of just punishing them for infractions. Employees should also be given access to their personal data if possible.

If you’re certain that implementing employee monitoring solutions is right for your business, tread carefully to ensure you’re compliant. Employee monitoring has significant legal implications and ailure to comply with the law can lead to serious consequences, including suits, fines, and reputational damage.

Federal law

While employers have broad authority to take actions to protect their business interests, employees also have privacy rights, especially when using their personal devices. The extent of these rights can vary depending on where your business is located and where your employees work from. However,employees have a reasonable expectation of privacy in certain situations, like personal phone calls and non-work-related activities during breaks. You can alleviate some of these concerns by being transparent about what’s being monitored.

The only federal law specifically addressing the monitoring of electronic communications at work is the Electronic Communications Privacy Act of 1986 (ECPA). Though this law is nearly 40 years old and not adopted to modern workplaces,you must still comply with its regulations.

The ECPA prohibits employers from intercepting employees’ oral, wire, and electronic communications. However, there are two exceptions: business purpose and consent. 

  • Business purpose: This exception allows employers to monitor employees if the business can show a legitimate business purpose. This is an extremely low bar for employers to meet.
  • Consent: This exception permits monitoring as long as the employee has given their consent. Notably, the consent exception isn’t limited to business communications, meaning employers can monitor personal communications if they have employee consent.

Best practices for staying compliant

  1. Consult legal counsel: Before implementing any monitoring software, consult with an employment lawyer to ensure your methods comply with federal, state, and local laws.
  2. Develop a clear policy: Create a clear and transparent monitoring policy which outlines the scope and purpose. Make sure that you communicate this policy to the employees and that you obtain their consent.
  3. Limit the scope of monitoring: Avoid monitoring non-work-related activities or personal communications, as this could infringe on employees’ privacy rights.
  4. Regularly review and update policies: Monitoring laws and regulations can change, so it’s essential to review and update your policies regularly to ensure ongoing compliance. 
  5. Train managers and HR: Ensure all managers and HR staff are trained on the legal implications of employee monitoring and understand how to implement monitoring practices fairly and legally.

Better ways to track employee productivity

Tracking employee productivity is essential, but relying solely on monitoring tools can lead to a culture of mistrust and micromanagement. Instead of fixating on every keystroke or website visited, consider more effective and positive approaches to measure productivity and ensure security.

Use project management systems

One of the best ways to track productivity without intrusive monitoring is by using project management systems. Tools like Asana, ClickUp, or Monday allow you to assign tasks, set deadlines, and track progress in real-time. These platforms include a clear overview of who is working on what and how projects are progressing.

Moreover, these tools encourage accountability and transparency while allowing employees the freedom to manage their own time and workload. With project management systems, you can easily see if someone is falling behind without needing to constantly watch over their shoulder.

Trust employees

Trust is a cornerstone of any successful workplace. If you’ve hired competent, skilled professionals, you should be able to trust them to do their jobs. Instead of focusing on monitoring every minute of their day, focus on outcomes. 

Are projects being completed on time? Are the quality and results meeting expectations? If the answer is yes, then it’s clear your employees are productive, regardless of how they structure their day.

Creating a culture of trust means giving employees the autonomy to manage their own work. This not only boosts morale but also increases overall productivity. Employees who feel trusted are more likely to take ownership of their work and go the extra mile to achieve success.

Rethink monitoring and micromanagement

If you feel the need to monitor and micromanage, it might be time to take a step back and evaluate the root cause. Constant monitoring often points to deeper issues, like poor hiring practices or trust issues. If you don’t trust your employees to work effectively without being watched, it might indicate you’re not hiring the right people or setting obtainable company goals.

Excessive monitoring can lead to employee dissatisfaction and burnout, which ultimately reduces productivity. Instead of monitoring and micromanaging, focus on setting clear goals and expectations, providing the necessary tools and support, then stepping back to let your employees do their jobs.

Employee monitoring FAQs

This is a loaded question and the answer will be unique to your business needs. Ultimately, it can be ethical if done transparently and within legal boundaries by clearly communicating what is being monitored and why. Monitoring should only focus on business needs and be sure to respect employee privacy.

The best software depends on your specific needs, but popular options include ActivTrak and InterGuard. Each software offers unique features, so it’s important to choose one that aligns with your goals and budget.

Start by identifying your specific monitoring needs. Then evaluate software options based on features, budget, ease of use, and compliance. Consider getting employee input to ensure the chosen software is accepted and effective.

If you’re looking for workplace monitoring tools, check out our Remote Monitoring Management (RMM) Software Guide. However, if your business’s needs are centered around performance management, explore top solutions in our Performance Management Software Guide.