Ethics and Employee Surveillance

We have an interesting bit of research for compliance officers’ consideration today, exploring how companies can implement surveillance of employees working from home in a useful manner. Taking an ethical approach to the endeavor seems to be a key ingredient for success. 

The findings were reported in the MIT Sloan Management Review last week. Researchers (led by Ben Laker, business professors at the University of Reading Britain) studied 1,000 companies that had implemented more employee surveillance over the summer, to see which approaches worked well and which ones just fostered more unhappiness and alienation among employees. 

This subject is well worth compliance officers’ time, because the risk of employee misconduct or mistake does rise when more people work remotely; we’ve been talking about how working from home alters a company’s risk profile since this pandemic started. So the need for more surveillance of employee activity is warranted. 

That said, monitoring feels intrusive to employees. The very act implies a certain level of distrust: “We’re not certain you’ll do the work you are supposed to do, so we’re going to observe your computer to verify.” Nobody likes that, but we’ve grown accustomed to the potential for surveillance in the office. Now that surveillance means the boss will observe you at home — well, yuck. 

Businesses also have numerous compliance obligations tugging them in contradictory directions, such as FINRA rules that require broker-dealer firms to monitor employee communications, and privacy rules that say you need a legitimate business need to collect personal data. 

All of which means that as companies implement more monitoring and surveillance procedures, they have to strike a delicate balance. So what did those researchers identify as best practices to strike it? 

First, Surveillance Is Necessary

Business operations alone will want surveillance to be sure employees aren’t goofing off or making mistakes while working remotely. Plenty of highly regulated businesses such as broker-dealer firms could also face new compliance obligations, because routines that had previously happened in person are now happening via online tools; that can expose the firm to new surveillance or recordkeeping requirements. 

Even if your business isn’t highly regulated, working from home changes the nature of risk for the business — and more surveillance could then be warranted. For example, companies didn’t need to record and analyze every person-to-person conversation in the office, because most of us have enough good sense not to be offensive or harassing in the interpersonal realm. But if employees are now all chatting online, we might be more prone to saying something dumb or offensive; and the company will have an electronic record of it. Compliance and HR directors can’t ignore the risks in that changed world. 

So while some enhanced surveillance can be downright creepy — the article mentions software that snaps a webcam photo of employees every five seconds — companies aren’t wrong to consider enhanced surveillance and monitoring. The need is legitimate. 

Communication Is Critical

The challenge for executives will be to define the purpose, means, and limits of your enhanced surveillance to employees. The better you are at doing that, the less likely they are to chafe against the new measures. 

The researchers concluded that employees were more likely to accept increased surveillance if the purpose was to enhance the customers’ experience rather than simply to observe or streamline employee performance. For example, law firms now surveil attorneys’ work habits with time-tracking tools — but the (ostensible) purpose of that is to identify billable hours to clients more precisely, rather than to let practice chairs be jerks to new associates. 

To no surprise, surveillance that isn’t clearly connected to some greater business objective is less likely to be well-received by employees. And the more invasive the surveillance — snapping photos, logging keystrokes, searching web histories, monitoring computer activity during “personal” time such as evening hours — the more employees resisted the effort.

So to succeed, leadership will need to explain exactly how surveillance will happen, the business purpose for it, and what the company won’t do with the information it collects.  

That last part intrigues me, because that’s when we get to a company’s ethical standards and corporate trust. If the company somehow abuses its surveillance power (say, analyzing off-hours web browsing habits and determining an employee is pregnant), that will be seen among employees as a betrayal of trust. So you’d do well to consider policies, procedures, and controls to guide whatever surveillance you’re implementing and prevent potential abuse.

Privilege Is Poison

The article also raised a great point about the threat of applying surveillance in a discriminatory way. It’s worth citing in full:

It is crucial that all workplace groups receive fair and consistent levels of monitoring; for example, the most junior-level employees must not be monitored to a greater extent than their managers, or at least not to a degree that causes unique burdens. A disproportionate, irrational level of surveillance of certain individuals relative to others indicates an ethical lapse.

We’ve talked about this issue before: employees’ keen perception of fairness, and undeserved privilege that exists for some groups but not others

The authors of the research recommended that companies put safeguards in place to prevent private information discovered during surveillance (such as our pregnancy example from above) from playing a role in hiring or promotion decisions. That’s wise, but it means the HR and compliance teams will need to think about what those safeguards should be, and then assure that the safeguards are enacted and effective. 

So all in all, compliance officers have lots to consider about enhanced surveillance. Perhaps put some blackout tape across your webcam while you do.

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