When workplace monitoring, behavioral analytics, and employee privacy collide

November 11, 2016

Imagine wristwatch sensors that can detect perspiration and monitor pulse rates – not as part of an exercise regimen, but in a workplace setting. In 2014, an MIT professor used such technology to monitor 57 stock and bond traders in a simulated lab, measuring their ability to handle stress while trading millions of dollars on Wall Street. The results revealed that the top performers, including one trader who made more than $1 million in a couple of hours, were able to quickly handle and recover from volatility. On the other hand, the traders who didn’t perform as well, including one individual who lost close to $5 million, were not as elastic in the face of market volatility.

The value of this type of technology is obvious. Not only can investment companies view dashboards to see if their employees are panicking, which could lead to bad decisions, but they can also use wristwatch sensors to test job applicants’ ability to handle the stock market’s ups and downs.

Wall Street investment companies aren’t the only organizations that want to use behavioral analytics and other types of workplace monitoring to improve performance.

Consulting firm Deloitte recently partnered with Humanyze, a Boston-based startup, to provide employees in one of its offices with smart badges (worn on lanyards) that allow Deloitte to track employee movement and vocal activity; the company recently renovated the office to improve collaboration and wanted to find out if its efforts were successful.

Deloitte was able to determine that employees preferred to congregate in certain areas, and although they had petitioned for new treadmills in the gym, the exercise equipment was collecting a lot of dust. Participation in this experiment was voluntary.

Humanyze also allows companies to equip their smart badges with microphones. While actual conversations are not being recorded, the badges can determine how long employees talk, and conversely, how long they listen when others are talking.

When the badges were used at Bank of America, data revealed that high-performing teams consistently shared communication strategies, with similarities in their frequency of conversations, use of body language and tone of voice. One call center’s manager decided to change how the teams took coffee breaks. Instead of staggering the breaks, all members of a particular team took their breaks at the same time so they could socialize. This improved engagement levels and also increased productivity levels.

One software company used events known as “beer meets” to encourage better communication, but after using the badges, they discovered this was not an effective approach. Instead, installing longer tables in the lunchroom produced the desired effect.

Genome, a customizable software program designed by a company called Klick Health, can extract data from employees’ card keys to determine whether they take the elevator or the stairs. Klick put that information to use when it launched a stair-climbing competition to encourage its employees to be healthier. The card keys also allow everyone in the company to see when employees are in the building or not.

Using PC monitoring software, companies such as Veriato allow employers to track inactivity, emails, social media, documents, file access, search terms and keystrokes.

Other types of time-tracking and management software can be used to track productivity rates by monitoring the amount of time an employee spends on each project. Proponents of this software say it can help to identify underperforming employees and encourage workers to avoid distractions. Plus, the technology makes it easier to determine how much time should be allocated for various projects.

While these employee monitoring techniques appear to improve productivity and limit theft, what are the ethical issues with tracking a worker’s movements? Are companies infringing on their employees’ privacy?

Nichole Wesson, a Los Angeles-based career coach and consultant, believes the ethicality of this practice is determined by answering four questions:

1. What information is the company gathering?
2. How will the information gathered be obtained?
3. How will the information gathered be used?
4. How transparent is the company with its employees about tracking?

Wesson admits that in our data-driven culture, companies routinely gather consumer data through a variety of methods, but she thinks it’s a more complex situation when dealing with employees. “Unlike safeguards for security, waste or fraud, which are often stated in the employee interview or new hire orientation, an employee may feel that tracking through a badge for purposes outside of these reasons may have too much of a ‘Big Brother’ feel,” Wesson explains.

And she doesn’t think companies can afford to drop the ball in this area. “A company would need to show not only why they are tracking to improve employee engagement, but also implement changes in accordance to the data gathered,” Wesson says. “If [they don’t], employee engagement would be at risk and so would employee loyalty.”

While companies are trying to improve the bottom line, employees want to know how monitoring will be beneficial to them. Stressing this WIIFM (What’s In It For Me) factor makes a big difference. John Reed, senior executive director for Robert Half Technology, says he believes that companies should detail the WIIFM component when communicating with employees about monitoring strategies. “They should explain to employees throughout the organization how the tracking of this data could improve their day-to-day work environment,” he says.

How much privacy should employees expect to have at work?

Unless they’re in the bathroom, employees shouldn’t have much of an expectation that they will be afforded privacy at work, and Dr. Christopher Bauer, ethics expert and the author of “Better Ethics Now: Avoid the Ethics Disaster You Never Saw Coming,” doesn’t consider tracking unethical. “Companies pay employees wages for being on the clock,” Reed explains, “and if it is not intrusive and they’re being honest, it’s not an ethical issue – although there may be unethical ways to use it.”

So, what would Bauer consider intrusive? “Employers have no right to listen in on personal phone calls, but they do have a right to know how long you’re on personal phone calls because you’re on their time, and they have a right to know how you’re spending it,” he says.

Employees may not embrace workplace monitoring, so Reed said he believes they should be given the choice of “opting out” whenever possible. Sometimes, companies might provide that option during the experimental phase, but once tracking becomes a standard, fully-implemented policy, employees typically don’t have a say in the matter.

This lack of choice can be problematic for several reasons. For example, voice monitoring reveals that high-performing teams tend to communicate more frequently. How might that affect someone who is a good worker but doesn’t talk a lot? And what about employees who give a certain performance because they know they’re being monitored? For example, once they find out that high-performing teams tend to communicate more often, they engage in lengthy, often unnecessary conversations only because their vocal activity is being recorded.

Also, while monitoring whether an employee takes the elevator or the steps can be used to encourage healthier practices, will the employees who don’t participate be penalized?

Employees may not take the stairs for a variety of reasons: They might have a knee injury or be trying to juggle a laptop, a briefcase and a cup of coffee.

Bauer says, “I’m not sure of the legalities of using behavioral analytics this way, but I think employees should always have the right to talk about what makes them uncomfortable and why.” However, he raises a good question: How is this practice significantly different from other types of monitoring, such as video surveillance or a supervisor watching employees?

So, do dissenting employees have any legal recourse? They might, according to Jonathan Westover, associate professor of organizational leadership in the Woodbury School of Business at Utah Valley University.

“While the courts tend to consistently side with organizations when it comes to questions of workplace privacy (meaning legally, employees have little right to an expectation of privacy), depending on the nature of the employment relationship (at will or contractual) and the organization's own internal written policies and procedures, an employee may actually have a contractual right to privacy,” Westover explains.

That’s why transparency is crucial, according to Reed. “Problems could occur if employees didn’t feel they were fully informed about tracking practices,” he says, “which is why it’s imperative for leaders and security teams to be clear when communicating plans and policies.”

Even in situations where employees don’t have a legal basis to contest monitoring, Westover says a reasonable expectation of privacy is a basic human right and companies should care if workers find this practice unethical: “It is important to consider the impact such practices will have on the broader organizational culture, employee morale, employee creativity and innovation, and ultimately long-term, sustainable employee productivity.”

In other words, even if organizations believe they have the legal and ethical right to monitor their employees’ movements and actions, if those employees don’t agree, Westover says, “They can and will vote with their feet.”

Some employees may be more inclined than others to view tracking negatively. Reed says it can certainly be stressful to some employees to think “Big Brother” is continuously watching them. "To avoid problems with employee retention, which might result from this anxiety about being watched, Reed suggests that companies "who are implementing or do implement these kinds of practices should be upfront with current and potential employees."

However, potential workers or new employees might be less likely to find this practice offensive.  “For new employees, this is all they know,” Bauer says, “but for existing employees, if all of a sudden, they’re told that they’re going to be tracked, these workers may wonder if the company doesn’t trust them.”

Understandably, companies are seeking ways to be more competitive, efficient and profitable – and employees are usually the focus of those efforts. However, Bauer advises organizations to be cautious: “As technology allows for more employee tracking, this issue will come up again and again, so companies need to make sure that their policies are clear, enforceable and in line with the mandates of free employee expression.”

Terri Williams writes for a variety of clients including USA Today, Yahoo, U.S. News & World Report, The Houston Chronicle, Investopedia, and Robert Half. She has a Bachelor of Arts in English from the University of Alabama at Birmingham. Follow her on Twitter @Territoryone.