The Internet has become an extremely valuable business tool, but it’s also a huge distraction for workers on the job. Employees are wasting valuable company time by surfing inappropriate websites (Facebook,shopping, sports, etc.), sending and receiving personal e-mail, talking to friends via online chat, and downloading videos and music. A series of studies have found that employees spend between one and three hours per day at work surfing the web on personal business. A company with 1,000 workers using the Internet could lose up to $35 million in productivity annually from just an hour of daily web surfing by workers. Many companies have begun monitoring employee use of e-mail and the Internet, sometimes without their knowledge. Many tools are now available for this purpose, including Spector CNE Investigator, OsMonitor, IMonitor, Work Examiner, Mobistealth, and Spytech. These products enable companies to record online searches, monitor file downloads and uploads, record keystrokes, keep tabs on e-mails, create transcripts of chats, or take certain screenshots of images displayed on computer screens. Instant messaging, text messaging, and social media 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 spent 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. GMI Insurance Services, which serves the U.S. transportation industry, found that employees were downloading a great deal of music and streaming video and storing them on company servers. GMI’s server backup space was being eaten up. 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. An estimated 27 percent of Fortune 500 organizations have had to defend themselves against claims of sexual harassment stemming from inappropriate e-mail. Even if the company is found not to be liable, responding to lawsuits could run up huge legal bills. 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 websites or social sites, closely monitor e-mail messages, or limit personal time on the web. GMI Insurance implemented Veriato Investigator and Veriato 360 software to record and analyze the Internet and computer activities of each GMI employee. The Veriato software is able to identify which websites employees visit frequently, how much time employees spend at these sites, whether employees are printing out or copying confidential documents to take home on a portable USB storage device, and whether there are any inappropriate communication conversations taking place. GMI and its sister company, CCS, had an acceptable use policy (AUP) in place prior to monitoring, providing rules about what employees are allowed and not allowed to do with the organization’s computing resources. However, GMI’s AUP was nearly impossible to enforce until the implementation of the Veriato employee monitoring software. To deal with music and video downloads, GMI additionally developed a “software download policy,” which must be reviewed and signed by employees. Management at both GMI and CCS believe employee productivity increased by 15 to 20 percent as a result of using the Veriato monitoring software. 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 had fired an employee for violating e-mail policies. 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 QUESTIONS:

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?