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Updated Apr 04, 2024

Pros and Cons of Monitoring Your Employees

Understand the upsides and drawbacks of tracking employee activity data.

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Simone Johnson, Staff Writer
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Employers need a clear picture of their team’s tasks, activities and progress, but tracking productivity can be a challenge. Some businesses use employee monitoring software to better understand employee activity and boost productivity. However, this software can adversely impact employees’ attitudes and morale. 

We’ll examine the pros and cons of employee monitoring to help business owners and managers decide if this level of oversight would be beneficial or detrimental to their organizations. 

What is employee monitoring?

Employee monitoring is a process employers use to track employee activity data to optimize individual productivity. Tracking employees’ work progress can help motivate employee engagement, minimize pinch points and increase profits.

Implementing employee monitoring software and technology is the most efficient way to monitor your team. These tools can automatically analyze and provide real-time monitoring and reporting to identify patterns of inefficiency and help employers improve business processes.

Editor’s note: Need employee monitoring software for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.

Businesses use various types of employee monitoring technology, including those listed below.

  • Website tracking software: Website tracking software provides access to employees’ browser history and online activity. You can see which sites an employee visited and how much time they spent there.
  • Application monitoring software: Download application monitoring software to track employee activity on their workplace device. You can retrieve saved documents and information within the program.
  • Social media tracking software: This software lets you view an employee’s social media activity to gauge how much time they spend on various platforms. You can also see their comments and messages.
  • Email tracking software: Email tracking software lets you access employees’ messages. You can view emails received, sent, deleted or archived by workers.
  • Keylogging software: Keystroke logging tools allow you to track what employees are typing.
  • Time-tracking software: Time-tracking tools help you monitor how many hours your employees work.
  • GPS tracking software: GPS tracking tools let you see where your employees go with company vehicles — ideal for businesses in the trucking service industry.
  • Video surveillance tools: Video surveillance technology helps you monitor employees and see if workers steal or sabotage company property.
Did You Know?Did you know
Website tracking software can help you identify problematic websites your employees visit so you can block these websites from employee use.

What are the pros of employee monitoring? 

Employee monitoring provides businesses with several distinct advantages, including the following:

  • Employee monitoring helps you detect suspicious user activity. Tracking all interactions with company data helps employers detect suspicious user activity, such as private documents being viewed or shared with outside sources. This level of oversight can help protect your business’s sensitive information.
  • Employee monitoring boosts overall cybersecurity. Employee monitoring software allows you to view saved documents, installed applications, websites visited, and messages sent on company property, including computers and mobile devices. You can also monitor business files, account information and client data. This high level of oversight can help protect your business from cybercrime, insider threats, data breaches and suspicious behavior. 
  • Employee monitoring backs up disciplinary actions. If your employee monitoring software detects fraudulent or unacceptable employee behavior, you may need to take disciplinary actions or even terminate the employee. The employee monitoring system provides evidence to back up your actions. For example, if you must discipline an employee for chronic tardiness, your time-tracking system provides documentation of how often they were late. 
  • Employee monitoring improves team performance. Reviewing employee activity helps you identify workers who aren’t meeting company expectations. For example, you will know if an employee spends an inordinate amount of time browsing Facebook or looking up sports scores online. Additionally, you can ascertain which team members are overloaded and which have time on their hands. Understanding each team member better can guide and inform decision-making. You’ll be aware of issues like harassment or poor customer management and can take immediate measures.
  • Employee monitoring creates mindfulness among employees. When employees know they’re being monitored, they’re more likely to be mindful of their actions and examine their behavior more closely before doing something. This oversight can boost productivity
  • Employee monitoring software helps you keep tabs on remote employees. Remote monitoring tools provide effective oversight of your remote teams. You can ensure these employees are sufficiently productive and use safe data-handling practices.
  • Employee monitoring software is cost-effective. Employee monitoring software doesn’t have to be expensive. Typically, it costs $20 to $150 per user per year. Like most software, your price depends on the features you want and the number of licenses you need for your team. Most systems do not charge additional fees; however, installation and IP renewal charges are typical. Upgrades like geolocation tracking and mobile licensing may also cost extra.
Did You Know?Did you know
According to a DeskTime report, workers waste the most time on social media and messaging apps in the following order: YouTube, Facebook and WhatsApp.

What are the cons of employee monitoring?

When misused, employee monitoring practices can damage your company’s culture in the following ways.

  • Employee monitoring can diminish morale. Instead of boosting employee productivity, employee monitoring can backfire and hurt morale. Employees may feel you don’t trust them. When employees don’t feel empowered and trusted, increased turnover may result. 
  • Employee monitoring creates extra work. Breaking down employee activity is time-consuming and requires careful examination. Analyzing this information helps with decision-making, but condensing is a trade-off that requires skill and knowledge. 
  • Employee monitoring can expose sensitive data. When you have so much access to employees’ data and digital activity, you’ll inevitably stumble upon personal material like bank account information, health records or profoundly private emails. If your system is hacked, employee privacy can be misused or exposed.

Is it legal to monitor your employees? 

No business owner wants to violate their employees’ rights, so understanding the legalities involved with employee monitoring is crucial. Take note of the following information about federal and state regulations on what’s permitted.

Can you track employee activity legally?

According to the Electronic Communications Privacy Act of 1986 (ECPA), employers can track activity on any device they give employees. Activity tracking can extend to monitoring files, downloads, internet usage, and social media activity. Guidelines may differ by state; ensure you understand your area’s specific regulations. 

Do you have to tell employees they’re being monitored?

Federally, telling your employees they are being monitored is not a legal requirement; however, worker consent regulations vary by state. There are many positive reasons to tell employees you’re monitoring them, including building trust, safeguarding your business in the event of a data breach, and improving team relationships. 

Can you ask for your workers’ social media logins and monitor activity? 

Some companies require employees to hand over their login information to their social media accounts if requested. However, in some states, workers can keep their login information private as long as their posts don’t threaten their company’s brand. Other businesses have policies that restrict what workers can post about their company. Check your state regulations to be sure about what’s allowed. 

Can you listen to or record oral or electronic communications? 

According to the ECPA, listening in or recording any oral or electronic communication is illegal. However, in some instances, you can monitor employees’ cell phone usage if valid business concerns back your motives. 

Consent is a critical factor in whether a conversation can be recorded. Federally, you only need the consent of one party. However, each state has requirements for the number of participants who must give permission before a conversation is recorded. 

For example, Arizona has a one-party-consent monitoring policy; to wiretap a conversation, you must have one participant’s permission in advance. In contrast, California is a two-party-consent state; employers need both parties’ consent to record a conversation.

Can you monitor employee emails? 

Private emails are fair game on a company system. On a federal level, you can legally access and view them. However, laws vary by state. For example, employers in Connecticut and Delaware must tell employees their emails are being monitored. States like Colorado and Tennessee require businesses to have an email monitoring policy. 

Is video monitoring legal? 

Video monitoring is legal on a federal level. However, like every employee monitoring method, there must be a legitimate business reason behind the surveillance, and it must be done within reason. For example, surveillance in the restroom and private areas isn’t allowed. 

However, if the company’s property is under surveillance, you don’t have to tell your employees or have their consent. To be safe legally, it’s best to put up signage informing your workforce that security cameras are on the grounds. 

Is keystroke logging legal? 

Keystroke logging tracks and records what your employees type on their company devices; it’s legal on a federal level. Some software alerts you of specific language or phrases you may find harmful to your company. 

Is employee monitoring ethical?

The ethical issues surrounding employee monitoring aren’t cut and dried. To foster an ethical business culture, lead with transparency in your workforce when using employee monitoring technology. This helps avoid legal trouble and creates a healthier work environment. As digital tools like AI become available for workplace monitoring, safety protocols are critical. Employers should always be aware of the data they collect and how it can take a mental toll on their employees. 

FYIDid you know
Some of the best fleet-tracking systems use AI tools to track drivers, equipment and vehicles. According to Pew Research, nearly half of Americans are in favor of using AI to monitor drivers.

Monitoring employees fairly

Although helpful, tracking software poses thorny privacy issues. For example, reading employee’s personal emails for no reason or sharing their private info can land you in significant legal trouble. It’s best to inform your team you’re monitoring them and create acceptable use policies so everyone understands proper usage of work devices and the internet while they’re on the clock. When employee monitoring is known to be a standard workplace policy, employees understand they’re not being singled out. 

Below are some best practices for monitoring employees fairly: 

  • Create employee monitoring policies. Ensure your policies explain in detail what devices and areas are being monitored.
  • Create employee monitoring agreements. Have workers sign an agreement stating they know and understand your policies.
  • Outline ethical and behavioral expectations. Clearly state your work ethic and behavior expectations. For example, let employees know that sharing company information with outside sources is against protocol.
  • Understand state privacy and monitoring regulations. Follow the guidelines according to your state. Consult a business attorney if you have any questions.
  • Monitor employees for the right reasons. Ensure you’re monitoring employee activity for your company’s sake. Selfish or personal reasons are unethical.
  • Monitor employees equally. Monitor your employees to the same degree so no one on your team can claim they’re being mistreated.
TipBottom line
Monitor user activity only during work hours to respect your employees' privacy and autonomy.

What is the best employee monitoring software?

The best employee monitoring software can help you find the right tracking and monitoring solutions to protect your business without alienating your team or violating privacy regulations. Consider the following excellent tools: 

  • Teramind: Teramind offers top-notch business security features, including keystroke logging and tools for storing user activity video recordings. Read our Teramind review to learn how the platform protects data and intellectual property via technology like data fingerprinting for sensitive data protection.
  • ActivTrak: ActivTrak is an intuitive monitoring solution that lets business owners and managers easily view team members, productivity charts and top users to see what’s needed to achieve company goals. Our review of ActivTrak explains how the solution’s integrated productivity coaching helps leaders maximize employee engagement.
  • Veriato: Veriato’s tools include anomaly detection and user risk scores to help you monitor a wide range of employee work data. Our review of Veriato explains how the platform protects organizations against common employee risks and offers clear data in the event of litigation. 

Julie Thompson contributed to this article. 

author image
Simone Johnson, Staff Writer
Simone Johnson is a and Business News Daily writer who has covered a range of financial topics for small businesses, including on how to obtain critical startup funding and best practices for processing payroll. Simone has researched and analyzed many products designed to help small businesses properly manage their finances, including accounting software and small business loans. In addition to her financial writing for and Business News Daily, Simone has written previously on personal finance topics for HerMoney Media.
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