Spying on Your People Diminishes us all, and it’s Lousy Data Anyway

By Barbara Sharp and Aishah Hamzah

Are employees working as effectively from home as they were in the office? The bigger question: should you be tracking them to find out?

“Is it necessary for all systems to show that we are online? That creates pressure, stress, distrust and unnecessary competition about who is online the longest. Trust should be a given.” —Anonymous participant in a Platos "Future Ways of Working" forum

We’re living in the great remote work experiment. In the early months of 2020, when countries one by one began entering varying degrees of lockdown, thousands of companies were forced to allow employees to work from home – whether or not they already had policies in place for remote working. But over six months into the pandemic, there’s something that’s hard for leaders to know: Are employees working as effectively from home as they were in the office? Are they as productive? As happy? And how can we know for sure? These questions matter because we all know productivity means profitability, and now’s no time to drop the ball. The first crisis stage of the pandemic response left many leaders feeling around for solutions similar to what we all used when we worked side-by-side in the office. Video-conferences were a good and bad substitute for meetings. But how are we to know when someone’s turned up for work or not, if we can’t see them? Are they using the fast-dispatched, expensive laptop for computer games and sourdough starter recipes? A missed deadline is far too late when everything is critical.

THE GROWING USE OF SURVEILLANCE TECH FOR CORPORATE INSIGHT

It’s seductive, the idea of tracking them using smart technology. Ha! Gotcha! Surveillance technology includes an array of new tools offered by dozens of companies that track the productivity of remote workers. The set up is simple: the software is installed on the employee’s device (a computer, or in some cases a mobile phone), and the data collected is crunched into a “productivity score” fed back to the manager. Here’s what they track:

• When an employee clocks in and out
  

• How much time is spent on a particular website or program
  

• Regularly taking screenshots of what they’re viewing
  

• The ability to log in and view their computer live
  

• The ability to monitor emails, private messages and search for keywords

Corporate interest in surveillance tech has grown exponentially in the past six months due to the coronavirus work-from-home boom, but the trend was already apace before COVID-19 hit. In 2018, a Gartner report revealed that out of 239 large corporations, 50% were using some form of “non-traditional” tracking method to monitor employee emails and social media accounts, as well as the people they met with, and how they were using their workspaces. In 2019, the trend increased. An Accenture report showed that 62% of organizations were using new tools to collect people data for more actionable insight. But disturbingly, less than one-third of executives were confident that their organizations were using these data responsibly.

Accenture says underestimating the risks to critical employee trust is potentially a US$3.1 trillion mistake:

“At a time when companies are using newly available workforce data to drive greater value, responsible leadership is the key to building employee trust. Trust is the ultimate currency—it’s the path to innovation and fuels growth by unlocking people’s potential.” —Ellyn Shook, Chief Leadership and Human Resources Officer, Accenture

In 2020, since the start of the pandemic, sales of surveillance software monitoring remote employees’ productivity have surged yet again with thousands of companies across the world being forced to send their workers home. By 200-300%!

It's unlikely this trend will suddenly nosedive, particularly since employers have generally escaped scrutiny for their monitoring practices even before the pandemic hit. Regulation isn’t keeping pace with the speed at which surveillance technology is developing, and companies are not generally required by law to disclose how they monitor employees using company-issued devices or applications.

WITH REMOTE WORK, ESPECIALLY, THE LINE BETWEEN THE PERSONAL AND THE PROFESSIONAL IS BLURRED

It might be reasonable to ask, if it’s still company time, don’t I have the right to track these data? Well, technically, yes. But here’s the catch: it’s not worth the risk, and it’s a false read in any case.

Gather employee data ethically, or deal with the arc-up. It may be litigation.

The privacy tussle between employers and employees isn’t new. In fact, it’s been around for decades. Take Coca-Cola, for example. In the early 2000s, in the United States, they fitted GPS trackers into some trucks in their fleet, tracking the vehicles both during and outside of work hours, when employees were permitted to use them freely. When the truth was revealed, an employee filed an intrusion upon seclusion claim against Coca-Cola under Missouri state law. Although the employee’s claim was ultimately dismissed, the court did rule that employers did not have a valid right to track employees that were “off-duty”. The duty to develop responsible monitoring practices based on ethical grounds lies with employers. If what you’re tracking is not job-relevant, it’s probably intrusive. And unhappy, disgruntled employees pose a risk to every company. They can damage team morale, creating a work environment of stress and disharmony. They can provide poor service, turning off customers and clients.

And in today’s hyper-connected world, all it takes is just one high-stakes or newsworthy social media rant for that disgruntled employee to destroy your company’s reputation. Today, it’s unlikely that Coca Cola would have been able to weather a court case like this unscathed. It’s a treacherous path with all the market exposure risks of any reputational issue. It’s worth avoiding, and behoves all companies to question whether their actions (in minute operational detail) live up to their espoused values.

The real deal-breaker: Even with consent, surveillance data is a false read. It's bad data.

PEOPLE CHANGE THEIR BEHAVIOR IF THEY KNOW THEY’RE BEING WATCHED.

Even if employees consent or accede to being surveilled, their behaviors will unconsciously change if they know they’re being watched. This is one of the oldest effects studied in psychology.

The earliest notion that being watched could affect a person's behavior arose in Norman Triplett’s work (1898). Triplett found that bicyclists were faster when competing against each other, as opposed to when they competed alone, against the clock. Triplett's study kicked off years of subsequent research exploring the theory that behavior (or performance) is influenced by the presence of others. The most iconic of this research in contemporary times are the Hawthorne studies.

THE HAWTHORNE STUDIES

The original Hawthorne studies involved research commissioned by the Western Electric telephone manufacturing factory in Hawthorne, near Chicago, in between 1924 and 1933. The company wanted to know whether its workers would be more productive in higher or lower levels of light. Productivity increases were observed among a select group of workers who were supervised intensively by managers. The workers' productivity slumped when the study ended, suggesting that the productivity gain came from the motivational effect on the workers of the managers’ surveillance and particular interest being shown in them. The Hawthorne Effect — a term coined in the 1950s by Henry A. Landsberger based on his interpretation of the Hawthorne studies — sums up the tendency for people to change their behavior because they are aware of being studied, and so too, their tendency to distort (usually unwittingly) the research findings.

THE HAWTHORNE EFFECT TODAY

Closer to the present day, studies still show that the “feeling of being watched” can and does influence behavior. It makes self-awareness more acute, and causes people to consciously or unconsciously modify their behavior to increase compliance with social standards.

In corporate settings, on top of presenting only the best versions of themselves under the prying gaze of watchful eyes, many employees also show negative consequences (like stress) in work-related behavior when they know they are being monitored by superiors. When people know that they are being studied, they change the way they behave. The biggest difficulty for the researcher is to know exactly how things have changed. The Hawthorne effect has profound implications for monitoring employees.

WOULD YOU WANT TO MAKE BIG DECISIONS ON DATA THAT COULD BE BIASED?

Movement doesn’t mean activity. When fitness trackers came out, the stories about them being put in the dryer or strapped to people’s pets to achieve the nirvana of 10,000 steps a day come to mind. Not that it’s easy to game these things, but they’re not a reliable data set.

If people change their behavior when they know they're being watched, you can't form reliable judgements. You could be making decisions based on dodgy data

The green light of a video movement detector might track me while I’m at my desk, checking my emails. Or when I’m surfing shopping sites. It might not track my thinking, strategizing, or report-writing. It might be off because I’m home-schooling my kids, and my daughter’s struggling with math and needs to stay equal in the new world. It’s unreliable data. And then there’s the ingenuity that makes humans great — gaming “the system”. If the purpose of surveillance isn't explicit, or if employees don’t trust it, employees can come up with “invisibility practices”, or ways to avoid it, as a 2018 study of US Transportation Security Administration (TSA) workers suggests. In a context they viewed as punitive and coercive, with CCTV cameras watching their every move, most TSA workers sought to go unseen, engaging in “disappearing acts”. These included extending their scheduled breaks, or “going to the restroom a lot” just for an excuse to step out of management’s constant gaze.

Some workers reported leaving their “private selves” at home and emotionally disconnecting from interactions with travellers in order to remain unnoticed. Others quickly changed out of their blue uniforms during breaks or at the end of shifts to simply “float under the radar” as soon as they could. These disappearing practices, in turn, served as a justification for their managers to trust them less and monitor them even more, creating a vicious cycle. If employees know they’re being watched, then any insight gained from tracking data is a false read that’s not reliable enough to make big decisions on. It’s like scoring an own goal, and when mutual feelings of trust and respect between employers and employees are damaged, restoring it is a long and expensive road.

TRUST: HARD TO BUILD, BUT SO EASY TO LOSE.

You’re right, trust is not quite so black-and-white. But what does the data tell us?

INCREASED ABSENTEEISM:

A “cultural rift” is created between employer and employee if the employee’s sense of control and autonomy is damaged from surveillance. Trust is lost, potentially leading to increased absenteeism, also known as the intentional or habitual absence from work. And it’s a bottom-line killer. According to the Gallup-Healthways Well-being Index, the total annual costs related to lost productivity from absenteeism totalled $84 billion, with the greatest loss of over $24 billion occurring in professional occupations. That was in 2013, and the costs were already staggering then. Today — in the ‘coronacession’ or Great Lockdown climate — these are costs that cannot be afforded at all.

INCREASED STRESS:

That “cultural rift” between employer and employee has a compounding impact. Surveillance inevitably causes employees increased stress, which will likely lead to higher health care expenditures in the short term. High stress should be of particular concern to employers in the United States who provide health insurance to their employees, because higher stress claims means higher premiums.

Healthcare expenditures in companies with stressful working conditions are 50% greater than at other oganizations

People are literally paying with their health, and it’s estimated that more than $500 billion is shaved off the US economy because of stress on the job.

DIMINISHED QUALITY OF WORK:

Studies by Gallup show that disengaged workers have 49% more accidents, and 60% more errors. Participants in a 2012 study felt obliged to work hard because they knew they were being surveilled, but this obligation didn’t extend to how well they worked.

You may have increased levels of productivity, but this can come at the cost of poor quality. Missed deadlines, poor sales results, overlooked mistakes — these are telltale signs of disengagement.

INCREASED DISENGAGEMENT:

As Gallup estimates, each disengaged employee costs their organization $3,400 for every $10,000 of salary, or 34%. The math put differently: an actively disengaged employee who makes $60,000 a year costs their company $20,400 a year. Over time, that adds up. It's no wonder organizations with disengaged workers experience 18% lower productivity, 16% lower profitability, and a 65% lower share price over time. Engaged employees are those who feel respected, supported, valued and trusted. People who said their leaders treated them with respect were 55% more engaged. These feelings are generally associated with higher levels of productivity, as these employees are more likely to be energized and empowered by their contributions at work, even in trying times.

HIGHER TURNOVER RATES:

A culture lacking trust and immediate managers' expectations are also some of the top predictors of turnover. Replacing a single employee can cost organizations a lot of money when their best talent walks out the door. Research shows that the total cost of losing an employee can range from 1.5 - 2 times their annual salary. As Josh Bersin writes, the real "total cost" of losing an employee includes:

• The cost of hiring a new person (advertising, interviewing, screening, hiring)

• The cost of onboarding a new person (training, management time)

• Lost productivity (a new person may take 1-2 years to reach the productivity of an existing person)

• Lost engagement (other employees who see high turnover disengage and lose productivity)

• Customer service and errors (new employees take longer and are often less adept at solving problems)

• Training costs (over 2-3 years you likely invest 10-20% of an employee's salary or more in training, that is gone)

• Cultural impact (whenever someone leaves others take time to ask "why?").

So don’t write off the job-hopping tendency as unchangeable or the ‘new norm’ that’s out of your control. Engaged employees are far less likely to consider leaving — this is especially true of Millennials — so building and maintaining trust should be a key business priority. As Slack CEO Stewart Butterfield said in a recent interview:

"The area to expend that effort is not in tools to monitor employee behavior, but in culture and basic management so that you don't need to do that”.

If you trust your people, you won’t have to watch them. They will, in turn, trust you too. Together, you can build a positive work culture and reap the benefits that can bring for not just people, but also for nearly 4 times better bottom-line profitability.

ASK YOURSELF: DO WE HAVE A PROBLEM WITH TRUST?

Do you delight in the possibility of recording a “gotcha” moment? If your answer is yes, you might have a bigger problem with trust. Tracking employees sends signals about trust, and how you manage accountability and productivity. Trust should be a given, and if it’s not, this could signal the type of culture at work in your organization. Culture is valued more than salary when it comes to job satisfaction. In fact, 70% of job seekers say they wouldn’t apply to a company unless it had a clearly defined culture that aligned with their own personal values. Your ability to attract and retain top talent, your reputation, your culture, and your bottom-line are inextricably linked. Just as it is for your competitors. Why do you think Best Place to Work league tables have burgeoned since the awards were first issued in 2009? It was true then, and remains true today: company culture pays off.

WHAT KIND OF ORGANIZATION DO YOU WANT TO BE? DOES YOUR REPUTATION MATCH THAT VISION? ARE YOU SENDING THE RIGHT SIGNALS?

New technologies make the surveillance of employees more accessible and convenient, but few monitoring tools out there have safeguards to prevent abuse and rely on bosses exercising judgement. And more than ever, employees are finding ways to ‘cheat’ surveillance. Ask yourself: is tracking congruent with my company’s values? Does it align with our corporate culture objectives as a trusted and trustable employer of the best talent? Would tracking do longer-term and irreparable harm, such as reputation risk? If you think it will motivate them to work harder, it won’t. What it will generate is a more damaging culture of mistrust with knock-on effects on productivity and profitability. So put the sticks away. Build a culture rooted in mutual trust by being proactive in consulting your team. Identify and solve problems together, whether it’s to do with productivity or the challenges of working from home during lockdown. Really listen to what they have to say, and recognize their contributions — specifically, and regularly — and show appreciation when they speak up on tough topics. It’s possibly your most important relationship. Use, instead, digital technologies that support the ability to have an honest and mutually respectful relationship. And get to that nirvana of being 4x more profitable than you are now. And the data will be dependable, not dodgy.