MONITORING EMPLOYEES ON NETWORKS: UNETHICAL OR GOOD BUSINESS?

When you were at work, how many minutes (or hours) did you spend on Facebook today? Did you send personal e-mail or visit some sports Web sites? If so, you're not alone. According to a Nucleus Research study, 77 percent of workers with Facebook accounts use them during work hours. A Ponemon Institute study reported that the average employee wastes approximately 30 percent of the workday on non-work-related Web browsing, while other studies report as many as 90 percent of employees receive or send personal e-mail at work. This behavior creates serious business problems. Checking e-mail, responding to instant messages, or sneaking in a brief YouTube video creates a series of nonstop interruptions that divert employee attention from the job tasks they are supposed to be performing. According to Basex, a New York City business research company, these distractions result in $650 billion in lost productivity each year! Many companies have begun monitoring employee use of e-mail and the Internet, sometimes without their knowledge. A 2010 study from Proofpoint Plus found that more than one in three large U.S corporations assign staff to read or analyze employee e-mail. Another recent survey from the American Management Association (AMA) and the ePolicy Institute found that two out of three of the small, medium, and large companies surveyed monitored Web use. Instant messaging and text message monitoring are also increasing. Although U.S. companies have the legal right to monitor employee Internet and e-mail activity while they are at work, is such monitoring unethical, or is it simply good business? Managers worry about the loss of time and employee productivity when employees are focusing on personal rather than company business. Too much time on personal business translates into lost revenue. Some employees may even be billing time they spend pursuing personal interests online to clients, thus overcharging them. If personal traffic on company networks is too high, it can also clog the company's network so that legitimate business work cannot be performed. Procter & Gamble (P&G) found that on an average day, employees were listening to 4,000 hours of music on Pandora and viewing 50,000 five-minute YouTube videos. These activities involved streaming huge quantities of data, which slowed down P&G's Internet connection. When employees use e-mail or the Web (including social networks) at employer facilities or with employer equipment, anything they do, including anything illegal, carries the company's name. Therefore, the employer can be traced and held liable. Management in many firms fear that racist, sexually explicit, or other potentially offensive material accessed or traded by their employees could result in adverse publicity and even lawsuits for the firm. Even if the company is found not to be liable, responding to lawsuits could run up huge legal bills. Symantec's 2011 Social Media Protection Flash Poll found that the average litigation cost for companies with social media incidents ran over $650,000. Companies also fear leakage of confidential information and trade secrets through e-mail or social networks. Another survey conducted by the American Management Association and the ePolicy Institute found that 14 percent of the employees polled admitted they had sent confidential or potentially embarrassing company e-mails to outsiders. U.S. companies have the legal right to monitor what employees are doing with company equipment during business hours. The question is whether electronic surveillance is an appropriate tool for maintaining an efficient and positive workplace. Some companies try to ban all personal activities on corporate networks-zero tolerance. Others block employee access to specific Web sites or social sites, closely monitor e-mail messages, or limit personal time on the Web. For example, P&G blocks Netflix and has asked employees to limit their use of Pandora. It still allows some YouTube viewing, and is not blocking access to social networking sites because staff use them for digital marketing campaigns. Ajax Boiler in Santa Ana, California, uses software from SpectorSoft Corporation that records all the Web sites employees visit, time spent at each site, and all e-mails sent. Financial services and investment firm Wedbush Securities monitors the daily e-mails, instant messaging, and social networking activity of its 1,000-plus employees. The firm's e-mail monitoring software flags certain types of messages and keywords within messages for further investigation. A number of firms have fired employees who have stepped out of bounds. A Proofpoint survey found that one in five large U.S. companies fired an employee for violating e-mail policies in the past year. Among managers who fired employees for Internet misuse, the majority did so because the employees' e-mail contained sensitive, confidential, or embarrassing information. No solution is problem free, but many consultants believe companies should write corporate policies on employee e-mail, social media, and Web use. The policies should include explicit ground rules that state, by position or level, under what circumstances employees can use company facilities for e-mail, blogging, or Web surfing. The policies should also inform employees whether these activities are monitored and explain why. IBM now has "social computing guidelines" that cover employee activity on sites such as Facebook and Twitter. The guidelines urge employees not to conceal their identities, to remember that they are personally responsible for what they publish, and to refrain from discussing controversial topics that are not related to their IBM role. The rules should be tailored to specific business needs and organizational cultures. For example, investment firms will need to allow many of their employees access to other investment sites. A company dependent on widespread information sharing, innovation, and independence could very well find that monitoring creates more problems than it solves.

Case Study Question

1. Should managers monitor employee e-mail and Internet usage? Why or why not?

2. Describe an effective e-mail and Web use policy for a company.

3. Should managers inform employees that their Web behavior is being monitored? Or should managers monitor secretly? Why or why not?